KENNAMETAL INC (KMT)

CIK: 0000055242. SIC: 3541 Machine Tools, Metal Cutting Types. Latest 10-K as of: 2025-08-12.

SIC breadcrumb: Manufacturing > Industrial And Commercial Machinery And Computer Equipment > SIC 3541 Machine Tools, Metal Cutting Types

SEC company page: https://www.sec.gov/edgar/browse/?CIK=55242. Latest filing source: 0000055242-25-000068.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000055242.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000055242.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001628280-26-031335.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Cash flow used in financing activities was $98.0 million for the nine months ended March 31, 2025 and primarily included $55.1 million in common shares repurchased, $46.6 million of cash dividends paid to Kennametal Shareholders and $6.6 million of the effect of employee benefit and stock plans and dividend reinvestment, partially offset by borrowings of $10.2 million under the Credit Agreement.

FINANCIAL CONDITION

Working capital was $742.0 million at March 31, 2026, an increase of $125.1 million from $616.9 million at June 30, 2025. The increase in working capital was primarily driven by an increase in inventories of $209.1 million resulting from rising tungsten prices, an increase in accounts receivable of $39.0 million, and an increase in other current assets of $24.4 million, which consisted primarily of prepaid assets, partially offset by an increase in accounts payable of $67.1 million, a decrease in cash and cash equivalents of $33.7 million, an increase in other current liabilities of $22.2 million, an increase in revolving and other lines of credit and notes payable of $15.8 million and an increase of accrued expenses of $7.4 million. Currency exchange rate effects decreased working capital by a total of approximately $5.6 million, the effects of which are included in the aforementioned changes.

Property, plant and equipment, net decreased $62.0 million from $919.9 million at June 30, 2025 to $857.9 million at March 31, 2026, primarily due to depreciation expense of $100.4 million and currency exchange effects of $5.5 million, partially offset by net capital additions of $52.0 million,

At March 31, 2026, total other assets were $594.8 million, an increase of $8.5 million from $586.2 million at June 30, 2025. The increase was primarily due to an increase in other of $19.7 million, which consisted primarily of pension assets and long-term prepaid assets, partially offset by amortization of intangibles of $7.1 million. Currency exchange rate effects were approximately $4.8 million, the effects of which are included in the aforementioned changes.

Kennametal Shareholders' equity was $1,354.7 million at March 31, 2026, an increase of $70.8 million from $1,284.0 million at June 30, 2025. The increase was primarily due to net income attributable to Kennametal of $115.4 million and capital stock issued under employee benefit and stock plans of $18.0 million, partially offset by cash dividends paid to Kennametal Shareholders of $45.6 million, the repurchase of capital stock of $10.1 million primarily under the share repurchase program, and other comprehensive loss attributable to Kennametal of $7.0 million.

DISCUSSION OF CRITICAL ACCOUNTING POLICIES

There have been no changes to our critical accounting policies since June 30, 2025.

RECONCILIATION OF FINANCIAL MEASURES NOT DEFINED BY U.S. GAAP

In accordance with SEC rules, below are the definitions of the non-GAAP financial measures we use in this report and the reconciliation of these measures to the most closely related GAAP financial measures. We believe that these measures provide useful perspective on underlying business trends and results and provide a supplemental measure of year-over-year results. The non-GAAP financial measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes. We believe these measures may be useful to investors as they provide supplemental information about business performance and provide investors a view of our business results through the eyes of management. These non-GAAP financial measures are not intended to be considered by the user in place of the related GAAP financial measure, but rather as supplemental information to our business results. These non-GAAP financial measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted.

Organic sales growth (decline) Organic sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (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. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth (decline) on a consistent basis. Also, we report organic sales growth (decline) at the consolidated and segment levels.

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Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Constant currency end market sales growth (decline) Constant currency end market sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by end market excluding the effects of acquisitions, divestitures and foreign currency exchange from year-over-year comparisons. We note that, unlike organic sales growth, constant currency end market sales growth does not exclude the effect of business days. We believe this measure provides investors with a supplemental understanding of underlying end market trends by providing end market sales growth (decline) on a consistent basis. Also, we report constant currency end market sales growth (decline) at the consolidated and segment levels.

Constant currency regional sales growth (decline) Constant currency regional sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by region excluding the effects of acquisitions, divestitures and foreign currency exchange from year-over-year comparisons. We note that, unlike organic sales growth, constant currency regional sales growth does not exclude the effect of business days. We believe this measure provides investors with a supplemental understanding of underlying regional trends by providing regional sales growth (decline) on a consistent basis. Also, we report constant currency regional sales growth (decline) at the consolidated and segment levels.

Reconciliations of organic sales growth to sales growth are as follows:

Three Months Ended March 31, 2026

Metal Cutting

Infrastructure

Total

Organic sales growth

12%

30%

19%

Foreign currency exchange effect(2)

6

4

5

Business days effect(5)

—

—

—

Divestiture effect(4)

—

(5)

(2)

Sales growth

18%

29%

22%

Nine Months Ended March 31, 2026

Metal Cutting

Infrastructure

Total

Organic sales growth

8%

15%

11%

Foreign currency exchange effect(2)

3

2

2

Business days effect(5)

—

—

—

Divestiture effect(4)

—

(4)

(1)

Sales growth

11%

13%

12%

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Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Reconciliations of constant currency end market sales growth (decline) to end market sales growth (decline)(2) are as follows:

Metal Cutting

Three Months Ended March 31, 2026

General Engineering

Transportation

Aerospace & Defense

Energy

Constant currency end market sales growth

13%

1%

27%

17%

Foreign currency exchange effect(2)

5

6

5

9

End market sales growth(3)

18%

7%

32%

26%

Infrastructure

Three Months Ended March 31, 2026

Energy

Earthworks

General Engineering

Aerospace & Defense

Constant currency end market sales growth

34%

43%

18%

17%

Foreign currency exchange effect(2)

2

6

3

10

Divestiture effect(4)

(9)

—

(10)

(3)

End market sales growth(3)

27%

49%

11%

24%

Total

Three Months Ended March 31, 2026

General Engineering

Transportation

Aerospace & Defense

Energy

Earthworks

Constant currency end market sales growth

14%

1%

23%

28%

43%

Foreign currency exchange effect(2)

5

6

7

3

6

Divestiture effect(4)

(3)

—

(1)

(5)

—

End market sales growth(3)

16%

7%

29%

26%

49%

Metal Cutting

Nine Months Ended March 31, 2026

General Engineering

Transportation

Aerospace & Defense

Energy

Constant currency end market sales growth

8%

1%

21%

14%

Foreign currency exchange effect(2)

2

3

3

4

End market sales growth(3)

10%

4%

24%

18%

Infrastructure

Nine Months Ended March 31, 2026

Energy

Earthworks

General Engineering

Aerospace & Defense

Constant currency end market sales growth

10%

22%

8%

25%

Foreign currency exchange effect(2)

—

2

2

7

Divestiture effect(4)

(6)

—

(8)

(2)

End market sales growth(3)

4%

24%

2%

30%

Total

Nine Months Ended March 31, 2026

General Engineering

Transportation

Aerospace & Defense

Energy

Earthworks

Constant currency end market sales growth

8%

1%

22%

11%

22%

Foreign currency exchange effect(2)

3

3

4

2

2

Divestiture effect(4)

(3)

—

—

(4)

—

End market sales growth(3)

8%

4%

26%

9%

24%

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Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Reconciliations of constant currency regional sales growth (decline) to reported regional sales growth (decline) (3) are as follows:

Three Months Ended March 31, 2026

Nine Months Ended March 31, 2026

Americas

EMEA

Asia Pacific

Americas

EMEA

Asia Pacific

Metal Cutting

Constant currency regional sales growth

17%

3%

18%

13%

2%

8%

Foreign currency exchange effect(2)

2

12

1

1

8

—

Regional sales growth(6)

19%

15%

19%

14%

10%

8%

Infrastructure

Constant currency regional sales growth (decline)

42%

—%

35%

22%

(1)%

14%

Foreign currency exchange effect(2)

1

15

3

—

8

1

Divestiture effect(4)

(12)

—

—

(8)

—

—

Regional sales growth(6)

31%

15%

38%

14%

7%

15%

Total

Constant currency regional sales growth

27%

2%

25%

17%

1%

11%

Foreign currency exchange effect(2)

1

13

2

1

8

—

Divestiture effect(4)

(4)

—

—

(4)

—

—

Regional sales growth(6)

24%

15%

27%

14%

9%

11%

(2) 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.

(3) Aggregate sales for all end markets sum to the sales amount presented on Kennametal's financial statements.

(4) Divestiture effect is calculated by dividing prior period sales attributable to divested businesses by prior period sales.

(5) 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.

(6) Aggregate sales for all regions sum to the sales amount presented on Kennametal's financial statements.

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Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-08-12. Report date: 2025-06-30.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in connection with the consolidated financial statements of Kennametal Inc. and the related financial statement notes included in Item 8 of this Annual Report. Unless otherwise specified, any reference to a “year” is to our fiscal year ended June 30. Additionally, when used in this Annual Report, unless the context requires otherwise, the terms “we,” “our” and “us” refer to Kennametal Inc. and its subsidiaries.

OVERVIEW Kennametal Inc. was founded based on a tungsten carbide technology breakthrough in 1938. The Company was incorporated in Pennsylvania in 1943 as a manufacturer of tungsten carbide metal cutting tooling and was listed on the New York Stock Exchange (NYSE) in 1967. With more than 85 years of materials expertise, the Company is a global industrial technology leader, helping customers across the General Engineering, Transportation, Earthworks, Energy and Aerospace & Defense end markets manufacture with precision and efficiency. This expertise includes the development and application of tungsten carbides, ceramics, super-hard materials and solutions used in metal cutting and extreme wear applications to keep customers up and running longer against conditions such as corrosion and high temperatures.

Our 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: the manufacturers of 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.

Throughout Management's Discussion and Analysis of Financial Condition and Results of Operations (the MD&A), we refer to measures used by management to evaluate performance. We also refer to a number of financial measures that are not defined under accounting principles generally accepted in the United States of America (U.S. GAAP), including organic sales growth (decline), constant currency regional sales growth (decline) and constant currency end market sales growth (decline). The explanation at the end of the MD&A provides the definition of these non-GAAP financial measures as well as details on their use and a reconciliation to the most directly comparable GAAP financial measures.

Sales of $1,966.8 million in 2025 decreased 4 percent from $2,046.9 million in 2024, reflecting an organic sales decline of 4 percent and an unfavorable currency exchange effect of 1 percent, partially offset by a favorable business days effect of 1 percent.

Operating income was $143.1 million, or 7.3 percent margin, compared with $170.2 million, or 8.3 percent margin, in the prior year. The decrease in operating income was primarily due to lower sales and production volumes, higher wages and general inflation, unfavorable foreign currency exchange of approximately $6 million and the net effect of increased tariffs of approximately $4 million. These factors were partially offset by restructuring benefits of approximately $23 million, pricing, lower raw material costs, an incremental year-over-year benefit of approximately $13 million from an advanced manufacturing production credit under the Inflation Reduction Act within the Infrastructure segment, and a net benefit of $12 million within the Infrastructure segment related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024. In 2025, the Metal Cutting and Infrastructure segments had operating margins of 7.1 percent and 7.8 percent, respectively.

During the year ended June 30, 2025, we completed the sale of a subsidiary located in Goshen, Indiana to a Chicago-based private equity firm. The Company received $19 million in proceeds and recognized a loss on divestiture of $1.5 million during 2025. The proceeds are subject to customary post-closing adjustments as well as an EBITDA-based earn-out opportunity for Kennametal at the end of a three-year period.

In February 2024, the Board of Directors of the Company authorized a $200 million, three-year share repurchase program outside of the Company's dividend reinvestment program. During 2025, the Company repurchased 2.5 million shares of common stock for $60 million.

Uncertainties with respect to evolving global trade policies and tariffs have negatively affected the global economy. The Company's results of operations, cash flows and financial condition could be negatively impacted by a decrease in demand for our products or an inability to effectively mitigate tariff-related cost increases through pricing and sourcing strategies. These factors could also increase the potential for future impairment charges, including goodwill and other intangible asset impairments. We have executed tariff mitigation actions including the implementation of surcharges on certain product sales and, where appropriate, rerouted internal supply chains. The unmitigated net effect from increased tariffs was approximately $4 million during fiscal 2025.

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Additionally, our business has been negatively affected by foreign currency exchange and inflationary headwinds. We have been able to partially mitigate the effects of inflation, foreign currency exchange challenges and other disruptions through price increases on our products. We cannot predict the ultimate effect of these issues on our business, operating results or financial condition, but we will continue to monitor macroeconomic conditions and attempt to mitigate the negative effect to the extent possible.

We reported earnings per diluted share (EPS) of $1.20 for 2025. EPS for the year was unfavorably affected by restructuring and related charges of $0.13 per share and a loss on divestiture of $0.01 per share. EPS in the prior year of $1.37 was unfavorably affected by restructuring and related charges of $0.13 per share.

We generated cash flow from operating activities of $208.3 million in 2025 compared to $277.1 million during the prior year. Capital expenditures were $89.0 million and $107.6 million during 2025 and 2024, respectively. During 2025, the Company returned a total of $122 million to the shareholders through $60 million in share repurchases under the $200 million, three-year program and $62 million in dividends.

For a discussion related to the results of operations, changes in financial condition and liquidity and capital resources for fiscal 2023 refer to Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our fiscal 2024 Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission on August 12, 2024.

RESULTS OF CONTINUING OPERATIONS

SALES Sales of $1,966.8 million in 2025 decreased 4 percent from $2,046.9 million in 2024, reflecting an organic sales decline of 4 percent and an unfavorable currency exchange effect of 1 percent, partially offset by a favorable business days effect of 1 percent.

Our sales growth (decline) by end market and region are as follows:

2025

(in percentages)

As Reported

Constant Currency

End market sales growth (decline):

Aerospace & Defense

6%

6%

Energy

(1)

0

General Engineering

(5)

(4)

Transportation

(6)

(4)

Earthworks

(6)

(7)

Regional sales decline:

Americas

(4)%

(3)%

Europe, the Middle East and Africa (EMEA)

(4)

(4)

Asia Pacific

(2)

(1)

GROSS PROFIT Gross profit decreased $29.0 million to $598.1 million in 2025 from $627.1 million in 2024. The decrease in gross profit was primarily due to lower sales and production volumes, unfavorable foreign currency exchange of approximately $8 million and the net effect of increased tariffs of approximately $4 million. These factors were partially offset by pricing, lower raw material costs, an incremental year-over-year benefit of approximately $13 million from an advanced manufacturing production credit under the Inflation Reduction Act within the Infrastructure segment and a net benefit of $12 million within the Infrastructure segment related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024. The gross profit margin for 2025 was 30.4 percent compared to 30.6 percent in 2024.

OPERATING EXPENSE Operating expense in 2025 was $430.8 million, a decrease of $2.3 million, or 1 percent, from $433.2 million in 2024.

We invested further in technology and innovation to continue delivering high quality products to our customers. Research and development expenses included in operating expense totaled $44.4 million and $44.2 million for 2025 and 2024, respectively.

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RESTRUCTURING AND OTHER CHARGES, NET In the June quarter of fiscal 2024, we announced an initiative to streamline our cost structure. Total restructuring and related charges for this program of $22.0 million, compared to a target of approximately $25 million, were recorded through June 30, 2025, consisting of $16.6 million in Metal Cutting and $5.5 million in Infrastructure. This action delivered annualized run rate pre-tax savings of approximately $35 million in 2025, in line with the target. This action was considered substantially complete as of December 31, 2024.

In January 2025, we announced several actions to support the long-term competitiveness of the Company and to mitigate softer market conditions. Total restructuring and related charges for this program of $11.4 million, compared to a target of approximately $25 million, were recorded through June 30, 2025, consisting of $8.8 million in Metal Cutting and $2.6 million in Infrastructure. These actions delivered annualized run rate pre-tax savings of approximately $28 million by the end of fiscal 2025. We now expect total annualized run rate savings of approximately $35 million in connection with these actions, exceeding the original target of $15 million. The Company substantially completed the closure of a facility in Greenfield, MA and the consolidation of facilities in Barcelona, Spain during 2025 as a part of these actions.

During 2025, we recorded restructuring and related charges of $13.3 million, which consisted of $10.4 million in Metal Cutting and $2.8 million in Infrastructure. Of this amount, restructuring-related charges of $1.3 million were included in cost of goods sold and $0.2 million were included in operating expense.

AMORTIZATION OF INTANGIBLES Amortization expense was $10.8 million and $11.6 million in 2025 and 2024, respectively.

INTEREST EXPENSE Interest expense in 2025 was $24.9 million, a decrease of $1.5 million, compared to $26.5 million in 2024. The portion of our debt subject to variable rates of interest was less than 1 percent at June 30, 2025 and 2024. There were no borrowings outstanding under the Credit Agreement as of June 30, 2025 and 2024.

OTHER (INCOME) EXPENSE, NET In 2025, other (income) expense, net was $13.8 million of other (income), net compared to $0.7 million in 2024. The increase of $13.1 million is primarily due to foreign currency transactions including preferential exchange rates in Bolivia, partially offset by higher net periodic pension expense.

INCOME TAXES The effective tax rate for 2025 was 25.2 percent compared to 21.3 percent for 2024. The year-over-year change in the effective tax rate is primarily due to prior year adjustments that include a $7.8 million benefit related to a tax rate change in Switzerland, a $6.2 million benefit related to a change in unrecognized tax benefits and a $2.9 million charge to settle the Italian tax litigation. The current year effective tax rate reflects a benefit for the advanced manufacturing production credit under the Inflation Reduction Act of 2022 and $1.4 million for interest received to resolve an income tax dispute in India and geographical mix.

Italian income tax litigation settlement. In 2012, we received an assessment from the Italian tax authority that denied certain tax deductions primarily related to our 2008 tax return. Attempts at negotiating a reasonable settlement with the tax authority were unsuccessful; and as a result, we decided to litigate the matter which was eventually settled during 2024. We continue to believe the assessment was baseless and that our 2008 tax return was compliant, in all material respects, with Italian income tax rules and regulations. Accordingly, no income tax liability had been recorded in connection with this assessment in any period. During fiscal 2024, the Italian government launched a tax amnesty program aimed at reducing the number of tax disputes pending before the Italian courts. Pursuant to program guidelines, payments made to successfully resolve a dispute had to be received by the Italian government no later than September 30, 2023. Due to the prolonged amount of time the case had been pending, and the inherent costs and risks of further litigating the matter, we decided to negotiate a settlement with the Italian tax authority that resulted in an income tax charge of $2.9 million during fiscal 2024. With this settlement, the matter is officially closed.

U.S. Income tax reform. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA), which includes a broad range of tax reform provisions, was signed into law in the United States. We are in the process of assessing what impact the OBBBA will have on our business.

NET INCOME ATTRIBUTABLE TO KENNAMETAL Net income attributable to Kennametal was $93.1 million, or $1.20 of earnings per diluted share (EPS) in 2025, compared to $109.3 million, or EPS of $1.37 in 2024. The decrease is a result of the factors previously discussed.

BUSINESS SEGMENT REVIEW We operate in two reportable operating segments consisting of Metal Cutting and Infrastructure. Corporate expenses that are not allocated are reported in Corporate. Segment determination is based upon internal organizational structure, the manner in which we organize segments for making operating decisions and assessing performance and the availability of separate financial results. See Note 21 of our consolidated financial statements set forth in Item 8 of this Annual Report.

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Our sales and operating income by segment are as follows:

(in thousands)

2025

2024

Sales:

Metal Cutting

$

1,219,686 

$

1,280,781 

Infrastructure

747,159 

766,118 

Total sales

$

1,966,845 

$

2,046,899 

Operating income:

Metal Cutting

$

86,375 

$

132,573 

Infrastructure

58,465 

39,857 

Corporate

(1,717)

(2,207)

Total operating income

143,123 

170,223 

Interest expense

24,930 

26,472 

Other (income) expense, net

(13,811)

(699)

Income before income taxes

$

132,004 

$

144,450 

METAL CUTTING

(in thousands)

2025

2024

Sales

$

1,219,686 

$

1,280,781 

Operating income

86,375 

132,573 

Operating margin

7.1 

%

10.4 

%

(in percentages)

2025

Organic sales decline

(5)

%

Foreign currency exchange effect

(1)

Business days impact

1 

Sales decline

(5)

%

2025

(in percentages)

As Reported

Constant Currency

End market sales growth (decline):

Aerospace & Defense

2%

3%

General Engineering

(6)

(5)

Transportation

(6)

(4)

Energy

(2)

(1)

Regional sales decline:

Americas

(4)%

(2)%

EMEA

(7)

(7)

Asia Pacific

(1)

—

21

Table of Contents

In 2025, Metal Cutting sales of $1,219.7 million decreased by $61.1 million, or 5 percent, from 2024. This was driven by an organic sales decline of 5 percent and an unfavorable foreign exchange effect of 1 percent, partially offset by a favorable business days effect of 1 percent. Aerospace & Defense end market sales increased in EMEA, and to a lesser extent in the Americas, as a result of our focused execution on our growth initiatives, the effects of which were partially offset by a decline in Asia Pacific due to lower economic activity and certain production challenges at our OEM customers. Sales in the General Engineering end market declined in EMEA, the Americas and Asia Pacific due to lower manufacturing activity. Transportation end market sales decreased in EMEA due to the decline in vehicle production and project activity, partially offset by increases in Asia Pacific due to increased vehicle production and in the Americas resulting from our focused execution on our growth initiatives. Energy end market sales declined in EMEA due to reduced oil and gas activity, partially offset by an increase in sales in the Americas due to power generation.

On a regional basis, sales in the Americas decreased primarily due to the General Engineering end market. A decline in EMEA is primarily due to the General Engineering, Transportation and Energy end markets as a result of a decline in vehicle production and lower manufacturing activity. Sales were flat in Asia Pacific due to an increase in the Transportation end market, as a result of increased vehicle production, offset by decreases in the General Engineering and Aerospace & Defense end markets.

In 2025, Metal Cutting operating income was $86.4 million, a $46.2 million decrease from 2024. The decrease in operating income was primarily due to lower sales and production volumes, higher wages and general inflation, unfavorable foreign currency exchange of approximately $6 million, the net effect of increased tariffs of approximately $4 million and higher restructuring and related charges of approximately $2 million compared to the prior year. These factors were partially offset by pricing, restructuring benefits of approximately $17 million and lower raw material costs. Metal Cutting operating margin in 2025 was 7.1 percent compared to 10.4 percent in the prior year.

INFRASTRUCTURE

(in thousands)

2025

2024

Sales

$

747,159 

$

766,118 

Operating income

58,465 

39,857 

Operating margin

7.8 

%

5.2 

%

(in percentages)

2025

Organic sales decline

(2)

%

Foreign currency exchange effect

— 

Business days impact

— 

Sales decline

(2)

%

2025

(in percentages)

As Reported

Constant Currency

End market sales growth (decline):

Aerospace & Defense

16%

16%

Energy

—

—

General Engineering

(4)

(3)

Earthworks

(6)

(7)

Regional sales (decline) growth:

Americas

(5)%

(4)%

EMEA

5

4

Asia Pacific

(3)

(3)

22

Table of Contents

In 2025, Infrastructure sales of $747.2 million decreased by $19.0 million, or 2 percent, from 2024. This was driven by an organic sales decline of 2 percent. Aerospace & Defense end market sales increased in EMEA and the Americas as a result of project timing and the execution of our growth initiatives. Energy end market sales increased in Asia Pacific as a result of project timing, the effects of which were offset by declines in the Americas due to lower global oil and gas activities as rig counts decreased year-over-year and order timing. Sales in the General Engineering end market decreased in the Americas and EMEA due to declines in industrial activity year-over-year, partially offset by growth in Asia Pacific from project timing. Earthworks end market sales decreased in the Americas due to lower mining activity, including customer mine closures and competitive pressures, partially offset by higher construction activity and an increase in sales in EMEA. Earthworks end market sales decreased in Asia due to lower customer capital investment from lower coal prices.

On a regional basis, sales in the Americas decreased primarily due to a decline in the Earthworks end market from lower mining activity, including customer mine closures and competitive pressures, partially offset by higher construction activity. The General Engineering and Energy end markets decreased due to declines in industrial activity year-over-year, which was partially offset by the execution of our growth initiatives in the Aerospace & Defense end market. Sales in EMEA increased in the Aerospace & Defense end market from order timing and execution of our strategic initiatives as well as higher Earthworks demand, partially offset by a decline in the General Engineering end market from declines in industrial activity year-over-year and project timing. Sales decreased in Asia Pacific due to a decline in underground mining from lower customer capital investment from lower coal prices, partially offset by the General Engineering and Energy end markets.

In 2025, Infrastructure operating income was $58.5 million, a $18.6 million increase from 2024. The increase in operating income was primarily due to an incremental year-over-year benefit of approximately $13 million from an advanced manufacturing production credit under the Inflation Reduction Act, a net benefit of $12 million related to the tornado that struck the Rogers, Arkansas facility late in fiscal 2024, restructuring benefits of approximately $7 million, lower raw material costs and pricing. These factors were partially offset by lower sales and production volumes, higher wages and general inflation and a loss from divestiture of approximately $2 million related to the sale of a subsidiary in Goshen, IN. Infrastructure operating margin in 2025 was 7.8 percent compared to 5.2 percent in the prior year.

CORPORATE

(in thousands)

2025

2024

Corporate expense

$

(1,717)

$

(2,207)

In 2025, Corporate expense decreased $0.5 million from 2024.

LIQUIDITY AND CAPITAL RESOURCES Cash flow from operations is the primary source of funding for working capital requirements, reinvesting in our business through capital expenditures and returning value to shareholders through dividends and share repurchases. During the year ended June 30, 2025, cash flow provided by operating activities was $208.3 million.

During fiscal 2022, we entered into the Sixth Amended and Restated Credit Agreement dated as of June 14, 2022 (the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility, which we use to augment cash from operations and as an additional source of funds. The Credit Agreement provides for revolving credit loans of up to $700.0 million for working capital, capital expenditures and general corporate purposes. The Credit Agreement allows for borrowings in U.S. dollars, euros, pounds sterling and Japanese yen. Interest payable under the Credit Agreement is based upon the type of borrowing under the facility and may be (1) Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Tokyo Interbank Offered Rate (TIBOR), and Secured Overnight Financing Rate (SOFR) for any borrowings in euros, pounds sterling, yen, and U.S. dollars respectively, plus an applicable margin, (2) the greater of the prime rate or the Federal Funds effective rate plus an applicable margin, or (3) fixed as negotiated by us. The Credit Agreement matures in June 2027.

The Credit Agreement requires us to comply with various restrictive and affirmative covenants, including one financial covenant: a maximum leverage ratio where debt, net of domestic cash in excess of $25 million and sixty percent of the unrestricted cash held outside of the United States, must be less than or equal to 3.75 times trailing twelve months EBITDA, adjusted for certain non-cash expenses.

As of June 30, 2025 and 2024, we were in compliance with all covenants of the Credit Agreement and we had no borrowings outstanding and $700.0 million of availability.

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Table of Contents

Borrowings on other lines of credit and notes payable were $1.0 million and $1.4 million at June 30, 2025 and 2024, respectively. The lines of credit represented short-term borrowings under credit lines with commercial banks in the various countries in which we operate. The availability of the credit lines, translated into U.S. dollars at June 30, 2025 exchange rates, totaled $62.1 million.

For the year ended June 30, 2025, average daily borrowings outstanding under the Credit Agreement were approximately $5.4 million. The weighted average interest rate on borrowings under the Credit Agreement was 5.5 percent for the year ended June 30, 2025. Based upon our debt structure at June 30, 2025 and 2024, less than 1 percent of our debt was exposed to variable rates of interest.

We consider the majority of the $1.0 billion unremitted earnings of our non-U.S. subsidiaries to be permanently reinvested. With regard to these unremitted earnings, we have not, nor do we anticipate the need to, repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business, including liquidity needs associated with our domestic debt service requirements. Determination of the amount of unrecognized deferred tax liability related to indefinitely reinvested earnings is not practicable due to our legal entity structure and the complexity of U.S. and local tax laws. With regard to the small portion of unremitted earnings that are not indefinitely reinvested, we maintain a deferred tax liability for foreign withholding and U.S. state income taxes. The deferred tax liability associated with unremitted earnings of our non-U.S. subsidiaries not permanently reinvested is $3.8 million as of June 30, 2025.

At June 30, 2025, we had cash and cash equivalents of $140.5 million. Total Kennametal Shareholders’ equity was $1,284.0 million and total debt was $597.8 million. Our current senior credit ratings are considered investment grade. We believe that our current financial position, liquidity and credit ratings provide us with access to the capital markets. We continue to closely monitor our liquidity position and the condition of the capital markets, as well as the counterparty risk of our credit providers.

Cash generated from operations is expected to meet our planned capital expenditures of approximately $90 million and expected dividend payments in fiscal 2026. There can be no assurance, however, that we will generate cash from operations in line with our expectations, or that these projections will remain constant throughout fiscal 2026. If cash generated from operations is not sufficient to support these activities, we may be required to use existing cash and cash equivalents, reduce capital expenditures or borrow under the Credit Agreement. We believe that our cash and cash equivalents, cash flow from operations and available borrowings are sufficient to meet both the short-term and long-term capital needs of the Company.

The following is a summary of our contractual obligations and other commercial commitments as of June 30, 2025:

Contractual Obligations (in thousands)

Total

2026

2027-2028

2029-2030

Thereafter

Long-term debt, including current maturities

(1)

$

692,025 

$

22,275 

$

344,550 

$

16,800 

$

308,400 

Other lines of credit and notes payable

1,004 

1,004 

— 

— 

— 

Pension benefit payments

(2)

56,801 

112,776 

107,540 

(2)

Postretirement benefit payments

(2)

973 

1,706 

1,706 

1,430 

(2)

Operating leases

(3)

52,838 

14,116 

17,188 

6,992 

14,542 

Purchase obligations

(4)

42,900 

42,880 

20 

— 

— 

Unrecognized tax benefits

(5)

1,947 

103 

1,515 

166 

163 

Total

$

138,152 

$

477,755 

$

132,928 

(1)Long-term debt includes interest obligations of $92.0 million and excludes debt issuance costs of $2.5 million.

(2)Annual payments are expected to continue into the foreseeable future at the amounts noted in the table.

(3)In 2025, the Company signed a material lease agreement related to a future innovation center in Germany. The lease has not yet commenced as the facility has yet to be constructed and the Company does not have the right to use the property until the future handover date. The future cash flows related to this lease are not included in the table.

(4)Purchase obligations consist of purchase commitments for materials, supplies and machinery and equipment as part of the ordinary conduct of business. Purchase obligations with variable price provisions were determined assuming market prices as of June 30, 2025 remain constant.

(5)Unrecognized tax benefits are positions taken or expected to be taken on an income tax return that may result in additional payments to tax authorities. These amounts include interest of $0.2 million and a penalty of $0.1 million accrued related to such positions as of June 30, 2025. If a tax authority agrees with the tax position taken or expected to be taken or the applicable statute of limitations expires, then additional payments will not be necessary.

Other Commercial Commitments (in thousands)

Total

2026

2027-2028

2029-2030

Thereafter

Standby letters of credit

$

4,539 

$

3,459 

$

1,080 

$

— 

$

— 

Guarantees

10,527 

2,828 

7,699 

— 

— 

Total

$

15,066 

$

6,287 

$

8,779 

$

— 

$

— 

24

Table of Contents

The standby letters of credit relate to insurance and other activities. The guarantees are non-debt guarantees with financial institutions, which are required primarily for security deposits, product performance guarantees and advances.

Share Repurchase Program. In February 2024, the Board of Directors of the Company authorized a $200 million, three-year share repurchase program outside of the Company's dividend reinvestment program. During 2025, the Company repurchased 2.5 million shares of common stock for $60 million.

Dividends. In fiscal 2025, the Board of Directors of the Company declared a dividend of $0.20 per share in each quarter for a total of $62 million in dividends returned to the shareholders.

Cash Flow Provided by Operating Activities. During 2025, cash flow provided by operating activities was $208.3 million, compared to $277.1 million in 2024. During 2025, cash flow provided by operating activities consisted of net income and non-cash items amounting to $247.5 million and changes in certain assets and liabilities netting to an outflow of $39.2 million. Contributing to the change in certain assets and liabilities were an increase in inventories of $17.4 million, decrease in accrued income taxes of $12.3 million, a decrease in accrued pension and postretirement benefits of $7.4 million, a decrease in accounts payable and accrued liabilities of $6.2 million and a decrease in other of $5.0 million, partially offset by a decrease in accounts receivable of $9.1 million.

During 2024, cash flow provided by operating activities was $277.1 million consisting of net income and non-cash items amounting to $278.2 million and changes in certain assets and liabilities netting to an outflow of $1.1 million. Contributing to the change in certain assets and liabilities were a decrease in accrued income taxes of $16.2 million, a decrease in accrued pension and postretirement benefits of $9.5 million, a decrease in accounts payable and accrued liabilities of $6.1 million and an increase in accounts receivable of $2.6 million, partially offset by a decrease in inventories of $36.8 million.

Cash Flow Used for Investing Activities. Cash flow used for investing activities was $61.8 million for 2025, a decrease of $47.6 million, compared to $109.4 million in 2024. During 2025, cash flow used for investing activities included capital expenditures, net of $87.1 million, which consisted primarily of equipment upgrades, proceeds from a divestiture of $18.7 million and proceeds from insurance recoveries of $11.8 million, partially offset by an outflow of $5.2 million which includes an investment in a strategic partnership with Toolpath Labs, Inc.

Cash flow used for investing activities was $109.4 million for 2024 and included capital expenditures, net of $102.1 million, which consisted primarily of equipment upgrades, the acquisition of a business for $4.0 million and an investment in a strategic partnership with ModuleWorks GmbH.

Cash Flow Used for Financing Activities. Cash flow used for financing activities was $133.9 million for 2025 compared to $141.7 million in 2024. During 2025, cash flow used for financing activities primarily included $61.9 million of cash dividends paid to shareholders, $60.1 million in common shares repurchased, primarily under the share repurchase program and $7.1 million of the effect of employee benefit and stock plans and dividend reinvestment.

Cash flow used for financing activities was $141.7 million for 2024 and included $65.6 million in common shares repurchased, primarily under the share repurchase program, $63.4 million of cash dividends paid to shareholders and $10.0 million of the effect of employee benefit and stock plans and dividend reinvestment.

FINANCIAL CONDITION At June 30, 2025, total assets were $2,545.4 million, an increase of $41.7 million from $2,503.8 million at June 30, 2024. Total liabilities increased $5.6 million from $1,215.2 million at June 30, 2024 to $1,220.8 million at June 30, 2025.

Working capital was $616.9 million at June 30, 2025, an increase of $30.3 million from $586.6 million at June 30, 2024. The increase in working capital was primarily driven by an increase in inventories of $23.6 million, an increase in cash and cash equivalents of $12.6 million, an increase in other current assets of $7.9 million and a decrease in accrued income taxes of $4.6 million. Partially offsetting these items was a decrease in accounts receivable of $7.4 million, an increase in other current liabilities of $5.0 million and an increase in accounts payable of $4.4 million. Currency exchange rate effects increased working capital by a total of approximately $22.5 million, the effects of which are included in the aforementioned changes.

Property, plant and equipment, net decreased $18.1 million from $938.1 million at June 30, 2024 to $919.9 million at June 30, 2025, primarily due to depreciation of $125.7 million and disposals of $1.8 million, partially offset by capital additions of $89.0 million and a currency exchange effect of approximately $22.0 million

At June 30, 2025, other assets were $586.2 million, an increase of $23.1 million from $563.1 million at June 30, 2024. The primary drivers for the increase were an increase in other of 12.9 million, including an investment in a strategic partnership with Toolpath Labs, Inc, an increase in goodwill of 11.2 million and an increase in deferred income taxes of $11.1 million. Partially offsetting these items was amortization of intangibles of $10.8 million. Currency exchange rate effects increased other assets by a total of approximately $23.9 million, the effects of which are included in the aforementioned changes.

25

Table of Contents

Kennametal Shareholders’ equity was $1,284.0 million at June 30, 2025, an increase of $34.1 million from $1,249.9 million in the prior year. The increase was primarily due to net income attributable to Kennametal of $93.1 million, other comprehensive income attributable to Kennametal of $47.9 million and capital stock issued under employee benefit and stock plans of $14.1 million, partially offset by cash dividends paid to Kennametal Shareholders of $61.9 million and the repurchase of capital stock of $60.1 million primarily under the share repurchase program.

EFFECTS OF INFLATION Rising costs, including the cost of certain raw materials, continue to affect our operations throughout the world. We experienced higher levels of inflation in 2025 and expect inflation will continue to be a challenge in fiscal 2026. We will strive to minimize the effects through cost containment, productivity improvements and price increases.

DISCUSSION OF CRITICAL ACCOUNTING POLICIES In preparing our consolidated financial statements in conformity with accounting principles generally accepted in the U.S., we make judgments and estimates about the amounts reflected in our consolidated financial statements. As part of our financial reporting process, our management collaborates to determine the necessary information on which to base our judgments and develops estimates used to prepare the consolidated financial statements. We use relevant information available at the end of each period to make these judgments and estimates. Our significant accounting policies are described in Note 2 of our consolidated financial statements, which are included in Item 8 of this Annual Report. We believe that the following discussion addresses our critical accounting policies.

Revenue Recognition. The Company's contracts with customers are comprised of purchase orders, and for larger customers, may also include long-term agreements. We account for a contract when it has approval and commitment from both parties, the rights of the parties and payment terms are identified, the contract has commercial substance and collectability of consideration is probable. These contracts with customers typically relate to the manufacturing of products, which represent single performance obligations that are satisfied when control of the product passes to the customer. The Company considers the timing of right to payment, transfer of risk and rewards, transfer of title, transfer of physical possession and customer acceptance when determining when control transfers to the customer. As a result, revenue is generally recognized at a point in time - either upon shipment or delivery - based on the specific shipping terms in the contract. The shipping terms vary across all businesses and depend on the product, customary local commercial terms and the type of transportation. Shipping and handling activities are accounted for as activities to fulfill a promise to transfer a product to a customer and as such, costs incurred are recorded when the related revenue is recognized. Payment for products is due within a limited time period after shipment or delivery, typically within 30 to 90 calendar days of the respective invoice dates. The Company does not generally offer extended payment terms.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Amounts billed and due from our customers are classified as accounts receivable, less allowance for doubtful accounts on the consolidated balance sheets. Certain contracts with customers, primarily distributor customers, have an element of variable consideration that is estimated when revenue is recognized under the contract. Variable consideration primarily includes volume incentive rebates, which are based on achieving a certain level of purchases and other performance criteria as established by our distributor programs. These rebates are estimated based on projected sales to the customer and accrued as a reduction of net sales as they are earned. The majority of our products are consumed by our customers or end users in the manufacture of their products. Historically, we have experienced very low levels of returned products and do not consider the effect of returned products to be material. We have recorded an estimated returned goods allowance to provide for any potential returns.

We warrant that products sold are free from defects in material and workmanship under normal use and service when correctly installed, used and maintained. This warranty terminates 30 days after delivery of the product to the customer and does not apply to products that have been subjected to misuse, abuse, neglect or improper storage, handling or maintenance. Products may be returned to Kennametal only after inspection and approval by Kennametal and upon receipt by the customer of shipping instructions from Kennametal. We have included an estimated allowance for warranty returns in our returned goods allowance discussed above.

The Company records a contract asset when it has a right to payment from a customer that is conditioned on events that have occurred other than the passage of time. The Company also records a contract liability when customers prepay but the Company has not yet satisfied its performance obligation. The Company did not have any material remaining performance obligations, contract assets or liabilities as of June 30, 2025 and 2024.

The Company pays sales commissions related to certain contracts, which qualify as incremental costs of obtaining a contract. However, the Company applies the practical expedient that allows an entity to recognize incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that would have been recognized is one year or less. These costs are recorded within operating expense in our consolidated statements of income.

26

Table of Contents

Stock-Based Compensation. We recognize stock-based compensation expense for all stock options, restricted stock awards and restricted stock units over the period from the date of grant to the date when the award is no longer contingent on the employee providing additional service (substantive vesting period). Forfeitures are recorded as incurred. We utilize the Black-Scholes valuation method to establish the fair value of all stock option awards. Time vesting stock units are valued at the market value of the stock on the grant date. Performance vesting stock units with a market condition are valued using a Monte Carlo model.

Accounting for Contingencies. We accrue for contingencies when it is probable that a liability or loss has been incurred and the amount can be reasonably estimated. Contingencies by their nature relate to uncertainties that require the exercise of judgment in both assessing whether or not a liability or loss has been incurred and estimating the amount of probable loss. The significant contingencies affecting our consolidated financial statements include environmental, health and safety matters and litigation.

Long-Lived Assets. We evaluate the recoverability of property, plant and equipment, operating lease right-of-use (ROU) assets and intangible assets that are amortized whenever events or changes in circumstances indicate the carrying amount of such assets may not be fully recoverable. Changes in circumstances include technological advances, changes in our business model, capital structure, economic conditions or operating performance. Our evaluation is performed at the asset group level, based upon, among other things, our assumptions about the estimated future undiscounted cash flows these assets are expected to generate. When the sum of the undiscounted cash flows is less than the carrying value, we will recognize an impairment loss to the extent that carrying value exceeds fair value. We apply our best judgment when performing these evaluations to determine if a triggering event has occurred, the undiscounted cash flows used to assess recoverability and the fair value of the asset group.

Goodwill. Goodwill represents the excess of cost over the fair value of the net assets of acquired companies. We evaluate the recoverability of goodwill of each of our reporting units by comparing the fair value of each reporting unit with its carrying value. Goodwill is tested at least annually for impairment. As of June 30, 2025, goodwill of $282.7 million was allocated only to the Metal Cutting reporting unit. We perform our annual impairment test during the June quarter in connection with our annual planning process unless there are impairment indicators that warrant a test prior to that quarter. In 2025, we performed a quantitative "Step 1" analyses using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. We can use a qualitative test, known as "Step 0," or a quantitative method to determine whether impairment has occurred. In 2024, we elected to implement Step 0 and were not required to conduct the quantitative analysis.

Under the Step 0 test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value. Qualitative factors may include, but are not limited to, economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events. If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value of the reporting unit is less than the carrying value, then performing the Step 1 quantitative test is necessary.

Step 1 of the quantitative test requires comparison of the fair value of the reporting unit to the respective carrying value. If the carrying value of the reporting unit is less than the fair value, no impairment exists. Otherwise, the Company would recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to the reporting unit.

The fair value of a reporting unit is determined using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. We apply our best judgment when assessing the reasonableness of the financial projections used to determine the fair value of the reporting unit. The discounted cash flow method is used to measure the fair value of our equity under the income approach. A terminal value utilizing a constant growth rate of cash flows is used to calculate a terminal value after the explicit projection period. The estimates and assumptions used in our calculations include revenue and gross margin growth rates, expected capital expenditures to determine projected cash flows, expected tax rates and an estimated discount rate to determine present value of expected cash flows. These estimates are based on historical experiences, our projections of future operating activity and our weighted average cost of capital (WACC). In order to determine the discount rate, the Company uses a market perspective WACC approach. The WACC is calculated incorporating weighted average returns on debt and equity from market participants. Therefore, changes in the market, which are beyond the control of the Company, may have an effect on future calculations of estimated fair value.

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Table of Contents

Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for purposes of the annual goodwill impairment test will prove to be an accurate prediction of the future. Certain events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately affect the estimated fair values of the Metal Cutting reporting unit may include such items as: (i) a decrease in expected future cash flows, specifically, a continued decrease in sales volume driven by a prolonged weakness in customer demand or other pressures adversely affecting our long-term sales trends, (ii) inability to achieve the sales from our strategic growth initiatives, and (iii) increased pressure on margins due to higher inflationary costs or other factors. A significant change in any of these factors may increase the likelihood of a goodwill impairment in a future period.

Pension and Other Postretirement Benefits We sponsor pension and other postretirement benefit plans for certain employees and retirees. Accounting for the cost of these plans requires the estimation of the cost of the benefits to be provided well into the future and attributing that cost over either the expected work life of employees or over the average life of participants participating in these plans, depending on plan status and on participant population. This estimation requires our judgment about the discount rate used to determine these obligations, expected return on plan assets, rate of future compensation increases, withdrawal and mortality rates and participant retirement age. Differences between our estimates and actual results may significantly affect the cost of our obligations under these plans.

In the valuation of our pension and other postretirement benefit liabilities, management utilizes various assumptions. Our discount rates are derived by identifying a theoretical settlement portfolio of high quality corporate bonds sufficient to provide for a plan’s projected benefit payments. This rate can fluctuate based on changes in the corporate bond yields. At June 30, 2025, a hypothetical 25 basis point increase or decrease in our discount rates would be immaterial to our pre-tax income.

The long-term rate of return on plan assets is estimated based on an evaluation of historical returns for each asset category held by the plans, coupled with the current and short-term mix of the investment portfolio. The historical returns are adjusted for expected future market and economic changes. This return will fluctuate based on actual market returns and other economic factors.

Future compensation rates, withdrawal rates and participant retirement age are determined based on historical information. These assumptions are not expected to significantly change. Mortality rates are determined based on a review of published mortality tables.

We expect to contribute approximately $7.3 million and $1.0 million to our pension and other postretirement benefit plans, respectively, in 2026. Expected pension contributions in 2026 are primarily for international plans.

Inventories. We use the last-in, first-out method for determining the cost of a significant portion of our U.S. inventories, and they are stated at the lower of cost or market. The cost of the remainder of our inventories is measured using approximate costs determined on the first-in, first-out basis or using the average cost method, and are stated at the lower of cost or net realizable value. When market conditions indicate an excess of carrying costs over market value, a lower of cost or net realizable value provision or a lower of cost or market provision, as applicable, is recorded. Once inventory is determined to be excess or obsolete, a new cost basis is established that is not subsequently written back up in future periods.

Income Taxes. The Company’s provision for income taxes is calculated based on income and statutory tax rates in the various jurisdictions in which the Company operates and requires the use of management’s estimates and judgments. Management judgment is required in determining the Company’s worldwide provision for income taxes and recording the related assets and liabilities, including accruals for unrecognized tax benefits and assessing the need for valuation allowances on deferred tax assets. Realization of our deferred tax assets is primarily dependent on future taxable income, the timing and amount of which are uncertain. A valuation allowance is recognized if it is “more likely than not” that some or all of a deferred tax asset will not be realized. As of June 30, 2025, the deferred tax assets net of valuation allowances relate primarily to net operating loss and other carryforwards, pension benefits, accrued employee benefits and inventory. In the event that we were to determine that we would not be able to realize our deferred tax assets in the future, an increase in the valuation allowance would be required. In the event we were to determine that we are able to use our deferred tax assets for which a valuation allowance is recorded, a decrease in the valuation allowance would be required.

NEW ACCOUNTING STANDARDS

The Company did not adopt any new accounting standards during 2025 that have had or are expected to have a material impact on the Company's consolidated financial statements or disclosures.

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RECONCILIATION OF FINANCIAL MEASURES NOT DEFINED BY U.S. GAAP In accordance with SEC rules, we are providing descriptions of the non-GAAP financial measures included in this Annual Report and reconciliations to the most closely related GAAP financial measures. We believe that these measures provide useful perspective on underlying business trends and results and a supplemental measure of year-over-year results. The non-GAAP financial measures described below are used by management in making operating decisions, allocating financial resources and for business strategy purposes and may, therefore, also be useful to investors as they are a view of our business results through the eyes of management. These non-GAAP financial measures are not intended to be considered by the user in place of the related GAAP financial measure, but rather as supplemental information to our business results. These non-GAAP financial measures may not be the same as similar measures used by other companies due to possible differences in method and in the items or events being adjusted.

Organic sales growth (decline). Organic sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (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. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth (decline) on a consistent basis. We report organic sales growth (decline) at the consolidated and segment levels.

Constant currency end market sales growth (decline). Constant currency end market sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by end market excluding the effects of acquisitions, divestitures and foreign currency exchange from year-over-year comparisons. We note that, unlike organic sales growth (decline), constant currency end market sales growth (decline) does not exclude the effect of business days. We believe this measure provides investors with a supplemental understanding of underlying end market trends by providing end market sales growth (decline) on a consistent basis. We report constant currency end market sales growth (decline) at the consolidated and segment levels.

Constant currency regional sales growth (decline). Constant currency regional sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) by region excluding the effects of acquisitions, divestitures and foreign currency exchange from year-over-year comparisons. We note that, unlike organic sales growth (decline), constant currency regional sales growth (decline) does not exclude the effect of business days. We believe this measure provides investors with a supplemental understanding of underlying regional trends by providing regional sales growth (decline) on a consistent basis. We report constant currency regional sales growth (decline) at the consolidated and segment levels.

Reconciliations of organic sales decline to sales decline are as follows:

Year ended June 30, 2025

Metal Cutting

Infrastructure

Total

Organic sales decline

(5)%

(2)%

(4)%

Foreign currency exchange effect(5)

(1)

—

(1)

Business days effect(9)

1

—

1

Sales decline

(5)%

(2)%

(4)%

Reconciliations of constant currency end market sales (decline) growth to end market sales (decline) growth, are as follows:

Metal Cutting

Year ended June 30, 2025

Energy

General Engineering

Aerospace & Defense

Transportation

Constant currency end market sales (decline) growth

(1)%

(5)%

3%

(4)%

Foreign currency exchange effect(5)

(1)

(1)

(1)

(2)

End market sales (decline) growth(6)

(2)%

(6)%

2%

(6)%

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Infrastructure

Year ended June 30, 2025

Energy

General Engineering

Aerospace & Defense

Earthworks

Constant currency end market sales (decline) growth

—%

(3)%

16%

(7)%

Foreign currency exchange effect(5)

—

(1)

—

1

End market sales (decline) growth(6)

—%

(4)%

16%

(6)%

Total

Year ended June 30, 2025

Energy

General Engineering

Aerospace & Defense

Transportation

Earthworks

Constant currency end market sales (decline) growth

—%

(4)%

6%

(4)%

(7)%

Foreign currency exchange effect(5)

(1)

(1)

—

(2)

1

End market sales (decline) growth(6)

(1)%

(5)%

6%

(6)%

(6)%

Reconciliations of constant currency regional sales (decline) growth to reported regional sales (decline) growth, are as follows:

Year Ended June 30, 2025

Americas

EMEA

Asia Pacific

Metal Cutting

Constant currency regional sales decline

(2)%

(7)%

—%

Foreign currency exchange effect(5)

(2)

—

(1)

Regional sales decline(7)

(4)%

(7)%

(1)%

Infrastructure

Constant currency regional sales (decline) growth

(4)%

4%

(3)%

Foreign currency exchange effect(5)

(1)

1

—

Regional sales (decline) growth(7)

(5)%

5%

(3)%

Total

Constant currency regional sales decline

(3)%

(4)%

(1)%

Foreign currency exchange effect(5)

(1)

—

(1)

Regional sales decline(7)

(4)%

(4)%

(2)%

(5) 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.

(6) Aggregate sales for all end markets sum to the sales amount presented on Kennametal's consolidated financial statements.

(7) Aggregate sales for all regions sum to the sales amount presented on Kennametal's consolidated financial statements.