Kennametal (KMT) investor relations material

Executive summary

• Achieved Q2 sales of $530 million, up 10% year-over-year, with adjusted EPS of $0.47, up 88% from the prior year, driven by higher sales volume, pricing, and restructuring savings.

• Operating income rose to $53 million, with margin improvement to 10.5% from 6.6% year-over-year.

• Results exceeded the high end of sales and EPS outlook, supported by buy-ahead activity and favorable tungsten pricing.

• Returned $15 million to shareholders via dividends in the quarter; no share repurchases in Q2.

• Continued progress on strategic growth initiatives, cost improvements, and restructuring, with $8 million in quarterly savings.

Financial highlights

• Gross profit for the quarter was $174 million (32.9% margin), up from $145 million (30.1% margin) year-over-year.

• Adjusted EBITDA margin rose to 17.1% from 13.9% year-over-year; adjusted EPS increased to $0.47 from $0.25.

• Free operating cash flow for the year-to-date was $38 million, down from $57 million, mainly due to higher inventory from rising tungsten prices.

• Net cash from operations YTD: $73 million; capital expenditures YTD: $34 million.

• Returned $15 million to shareholders via dividends; no share repurchases in the quarter.

Outlook and guidance

• Full-year sales guidance raised to $2.19–$2.25 billion; adjusted EPS expected at $2.05–$2.45, including ~$0.95 benefit from price/raw material timing.

• Q3 sales expected at $545–$565 million; adjusted EPS $0.50–$0.60.

• Free operating cash flow for the year expected at ~60% of adjusted net income; capital spending to be ~$90 million.

• Restructuring savings of $30 million included in FY26 guidance.

• Management expects continued benefit from pricing actions and restructuring savings, but notes ongoing risks from inflation, tariffs, and global economic uncertainty.