KENNAMETAL INC
For the period ended Jun 30, 2025. Filed Aug 12, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Aug 12, 2025
KMT$23.00-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-06-30; filed 2024-08-12.
0000055242-24-000055
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-06-30; filed 2025-08-12.
0000055242-25-000068
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 108 previous paragraphs and 105 current paragraphs.
46 unchanged; 50 reworded; 9 added; 8 removed; 4 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
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.
Current report
(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.
Removed paragraphs (8)
Previous report
On May 26, 2024, the Company's production facility in Rogers, AR, sustained damage from a tornado. At the time of the storm, the facility was shut down for the Memorial Day weekend and no employees were onsite. The Company resumed operations at the facility after a two-week shutdown. Charges of approximately $4 million were recorded during the June quarter of fiscal 2024, consisting of repairs and impairments of fixed assets and inventory. The Company is continuing to work with its insurance provider to finalize a claim for insurance recoveries related to the tornado.
Previous report
Russia's invasion of Ukraine in February 2022 resulted in the imposition of economic sanctions on Russia by the United States, Canada, the European Union and other countries. We have experienced increased costs for energy and raw materials and other supply chain issues due, in part, to the negative impact of the conflict on the global economy. During the March quarter of 2022, the Company ceased operations in Russia and subsequently decided to liquidate its legal entity in Russia, which is currently expected to be completed during fiscal 2025. Similarly, the conflict in Gaza that began in October 2023 could negatively impact the Company's financial condition or results of operations. To date, the conflict in Gaza has not significantly affected the Company's business activities or results of operations.
Previous report
During 2024, we recorded restructuring and related charges of $12.4 million, which consisted of $8.5 million in Metal Cutting and $3.9 million in Infrastructure. These amounts are inclusive of a reversal of restructuring and related charges of $1.1 million related to prior actions, including $0.4 million in operating expense. Also included in restructuring and other charges, net during 2024 is a net benefit of $0.6 million primarily due to the sale of properties.
Previous report
OTHER (INCOME) EXPENSE, NET In 2024, other (income) expense, net was $0.7 million of other (income), net compared to other expense, net of $4.3 million in 2023. The increase of $5.0 million in other (income), net was primarily due to a loss of $3 million recognized in 2023 due to a litigation settlement related to legacy operations that did not repeat in 2024.
Previous report
Italian Income Tax Litigation Settlement
Previous report
On a regional basis, sales in the Americas increased primarily due to General Engineering and Aerospace & Defense. Growth in EMEA reflects execution on our strategic initiatives. Sales decreased in Asia Pacific due to lower economic activity in China.
Previous report
Share Repurchase Program In July 2021, the Board of Directors of the Company approved a share repurchase program authorizing the Company to purchase up to $200 million of the Company's common stock over a three-year period. During 2024, the Company repurchased 2.6 million shares of common stock for $65 million, completing the initial share repurchase program. In February 2024, the Board of Directors of the Company authorized an additional $200 million, three-year share repurchase program that is in place for fiscal 2025.
Previous report
Allowance for Doubtful Accounts We record allowances for estimated losses resulting from the inability of our customers to make required payments. We assess the creditworthiness of our customers based on multiple sources of information and analyze additional factors such as our historical bad debt experience, industry concentrations of credit risk, current economic trends, changes in customer payment terms and forward-looking information. This assessment requires significant judgment. If the financial condition of our customers was to deteriorate, additional allowances may be required, resulting in future operating losses that are not included in the allowance for doubtful accounts at June 30, 2024.
Reworded paragraphs (50)
Previous wording
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 Aerospace & Defense, Earthworks, Energy, General Engineering and Transportation 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.
Current wording
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.
Previous wording
Sales of $2,046.9 million in 2024 decreased 2 percent from $2,078.2 million in 2023, reflecting an organic sales decline of 1 percent and an unfavorable currency exchange effect of 1 percent.
Current wording
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.
Previous wording
Operating income was $170.2 million, or 8.3 percent margin, compared with $192.4 million, or 9.3 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, higher restructuring and related charges of approximately $6 million, charges of approximately $4 million, consisting of repairs and impairments of fixed assets and inventory due to the tornado that affected the Company's Rogers, Arkansas facility during the fourth quarter, and unfavorable foreign currency exchange of approximately $2 million. These factors were partially offset by pricing, restructuring benefits of approximately $21 million and lower raw material costs. In 2024, the Metal Cutting and Infrastructure segments had operating margins of 10.4 percent and 5.2 percent, respectively.
Current wording
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.
Previous wording
In addition, 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 headwinds 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.
Current wording
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.
Previous wording
We reported earnings per diluted share (EPS) of $1.37 for 2024. EPS for the year was unfavorably affected by restructuring and related charges of $0.13 per share. EPS in the prior year of $1.46 was unfavorably affected by restructuring and related charges of $0.06 per share.
Current wording
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.
Previous wording
We generated cash flow from operating activities of $277.1 million in 2024 compared to $257.9 million during the prior year. Capital expenditures were $107.6 million and $94.4 million during 2024 and 2023, respectively. During 2024, the Company returned a total of $129 million to the shareholders through $65.4 million in share repurchases under the initial $200 million, three-year program and $63.4 million in dividends.
Current wording
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.
Previous wording
SALES Sales of $2,046.9 million in 2024 decreased 2 percent from $2,078.2 million in 2023, reflecting an organic sales decline of 1 percent and an unfavorable currency exchange effect of 1 percent.
Current wording
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.
Previous wording
GROSS PROFIT Gross profit decreased $19.3 million to $627.1 million in 2024 from $646.4 million in 2023. The decrease in gross profit was primarily due to lower sales and production volumes, higher wages and general inflation, charges of approximately $4 million, consisting of repairs and impairments of fixed assets and inventory due to the tornado that affected our Rogers, Arkansas facility during the fourth quarter, and unfavorable foreign currency exchange of approximately $2 million. These factors were partially offset by pricing, lower raw material costs and restructuring benefits. The gross profit margin for 2024 was 30.6 percent compared to 31.1 percent in 2023.
Current wording
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.
Previous wording
OPERATING EXPENSE Operating expense in 2024 was $433.2 million, a decrease of $4.1 million, or 0.9 percent, from $437.3 million in 2023.
Current wording
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.
Previous wording
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 $44.2 million and $43.1 million for 2024 and 2023, respectively.
Current wording
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.
Previous wording
RESTRUCTURING AND OTHER CHARGES, NETIn the June quarter of fiscal 2023, we announced an initiative to streamline our cost structure while continuing to invest in our high-return commercial and operational excellence initiatives. Total restructuring and related charges for this program of $20.1 million, compared to a target of approximately $25 million, were recorded through June 30, 2024, consisting of $14.8 million in Metal Cutting and $5.3 million in Infrastructure. The majority of the remaining charges are expected to be recognized in fiscal 2025. This action delivered annualized run rate pre-tax savings of approximately $33 million at the end of fiscal 2024.
Current wording
RESTRUCTURING AND OTHER CHARGES, NETIn 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.
Previous wording
AMORTIZATION OF INTANGIBLES Amortization expense was $11.6 million and $12.6 million in 2024 and 2023, respectively.
Current wording
AMORTIZATION OF INTANGIBLES Amortization expense was $10.8 million and $11.6 million in 2025 and 2024, respectively.
Previous wording
INTEREST EXPENSE Interest expense in 2024 was $26.5 million, a decrease of $2.0 million, compared to $28.5 million in 2023. The portion of our debt subject to variable rates of interest was less than 1 percent at June 30, 2024 and 2023. There were no borrowings outstanding under the Credit Agreement as of June 30, 2024 and 2023.
Current wording
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.
Previous wording
INCOME TAXES The effective tax rate for 2024 was 21.3 percent compared to 22.7 percent for 2023. The year-over-year change in the effective tax rate is primarily due to current 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, a $3.1 million charge to settle the Italian tax litigation, prior year adjustments for the release of a valuation allowance related to net deferred tax assets in Brazil, a benefit to adjust a deferred tax asset associated with tax reform in Switzerland, and geographical mix.
Current wording
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.
Previous wording
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 2023, 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 $3.1 million during fiscal 2024. With this settlement, the matter is officially closed.
Current wording
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.
Previous wording
NET INCOME ATTRIBUTABLE TO KENNAMETALNet income attributable to Kennametal was $109.3 million, or $1.37 of earnings per diluted share (EPS) in 2024, compared to $118.5 million, or EPS of $1.46 in 2023. The decrease is a result of the factors previously discussed.
Current wording
NET INCOME ATTRIBUTABLE TO KENNAMETALNet 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.
Previous wording
In 2024, Metal Cutting sales of $1,280.8 million increased by $11.0 million, or 1 percent, from 2023. This was driven by organic sales growth of 1 percent. Aerospace & Defense end market sales increased in EMEA and the Americas as a result of our focused execution on our strategic initiatives, the effects of which were partially offset by a decline in Asia Pacific due to lower economic activity in China. Sales in the General Engineering end market were flat compared to the prior year as increases in the Americas were offset by a decrease in Asia Pacific and EMEA due to lower economic activity. Energy end market sales declined in Asia Pacific due to delays in wind energy projects and the Americas as a result of the slower oil and gas market, partially offset by an increase of sales in EMEA. Transportation end market sales increased in EMEA due to improving hybrid/electric vehicle business, partially offset by declines in Asia Pacific and the Americas resulting from slowing customer demand.
Current wording
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.
Previous wording
On a regional basis, sales in the Americas decreased primarily due to lower U.S. oil and gas and industrial activity year over year. Sales increased in EMEA primarily as a result of defense related activity in EMEA. Sales were flat in Asia Pacific, excluding the unfavorable foreign currency effect, due to a decline in underground mining offset by increases in the General Engineering end market and construction.
Current wording
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.
Previous wording
In 2024, Metal Cutting operating income was $132.6 million, a $3.2 million decrease from 2023. The decrease in operating income was primarily due to lower sales and production volumes, higher wages and general inflation, and higher restructuring charges of approximately $3 million. These factors were partially offset by pricing and restructuring benefits of approximately $17 million. Metal Cutting operating margin in 2024 was 10.4 percent compared to 10.7 percent in the prior year.
Current wording
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.
Previous wording
In 2024, Infrastructure sales of $766.1 million decreased by $42.3 million, or 5 percent, from 2023. This was driven by organic sales decline of 4 percent and an unfavorable foreign currency exchange effect of 1 percent. Energy end market sales decreased primarily due to U.S. oil and gas activities as land rig counts decreased year over year. Sales in the General Engineering end market decreased in the Americas as a result of declines in industrial activity year over year and ore inventory sales in the prior year that did not repeat, partially offset by growth in Asia Pacific and EMEA. Earthworks end market sales decreased due to construction in the Americas, lower snowplow blades in the Americas due to a milder winter and underground mining in Asia Pacific. Aerospace & Defense end market sales increased due to the execution of our growth initiatives and order timing.
Current wording
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.
Previous wording
In 2024, Infrastructure operating income was $39.9 million, a $19.9 million decrease from 2023. The decrease in operating income was primarily due to lower sales and production volumes, higher wages and general inflation, charges of approximately $4 million, consisting of repairs and impairments of fixed assets and inventory due to the tornado that affected the Company's Rogers, Arkansas facility during the fourth quarter, and higher restructuring charges of approximately $3 million. These factors were partially offset by restructuring benefits of approximately $5 million. Infrastructure operating margin in 2024 was 5.2 percent compared to 7.4 percent in the prior year.
Current wording
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.
Previous wording
In 2024, Corporate expense decreased $0.9 million from 2023.
Current wording
In 2025, Corporate expense decreased $0.5 million from 2024.
Previous wording
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, 2024, cash flow provided by operating activities was $277.1 million.
Current wording
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.
Previous wording
As of June 30, 2024, we were in compliance with all covenants of the Credit Agreement and we had no borrowings outstanding and $700.0 million of availability. There were no of borrowings outstanding as of June 30, 2023.
Current wording
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.
Previous wording
Borrowings on other lines of credit and notes payable were $1.4 million and $0.7 million at June 30, 2024 and 2023, 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, 2024 exchange rates, totaled $56.2 million.
Current wording
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.
Previous wording
For the year ended June 30, 2024, average daily borrowings outstanding under the Credit Agreement were approximately $26.1 million. The weighted average interest rate on borrowings under the Credit Agreement was 6.3 percent for the year ended June 30, 2024. Based upon our debt structure at June 30, 2024 and 2023, less than 1 percent of our debt was exposed to variable rates of interest.
Current wording
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.
Previous wording
We consider the majority of the $1.6 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 $6.9 million as of June 30, 2024.
Current wording
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.
Previous wording
At June 30, 2024, we had cash and cash equivalents of $128.0 million. Total Kennametal Shareholders’ equity was $1,249.9 million and total debt was $597.4 million. Our current senior credit ratings are considered investment grade. We believe that our current financial position, liquidity and credit ratings provide us 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.
Current wording
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.
Previous wording
Cash generated from operations is expected to meet our planned capital expenditures of approximately $110 million and expected dividend payments in fiscal 2025. 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 2025. 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.
Current wording
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.
Previous wording
(1)Long-term debt includes interest obligations of $114.3 million and excludes debt issuance costs of $3.0 million.
Current wording
(1)Long-term debt includes interest obligations of $92.0 million and excludes debt issuance costs of $2.5 million.
Previous wording
(3)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, 2024 remain constant.
Current wording
(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.
Previous wording
(4)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 $0.1 million and a penalty of $0.1 million accrued related to such positions as of June 30, 2024. 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.
Current wording
(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.
Previous wording
In July 2021, the Board of Directors of the Company approved a share repurchase program authorizing the Company to purchase up to $200 million of the Company's common stock over a three-year period. During 2024, the Company repurchased a total of 2.6 million shares of common stock for $65 million, completing the initial share repurchase program. In February 2024, the Board of Directors of the Company authorized an additional $200 million, three-year share repurchase program that is in place for fiscal 2025.
Current wording
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.
Previous wording
Dividends In fiscal 2024, the Board of Directors of the Company declared a dividend of $0.20 per share in each quarter for a total of $63 million in dividends returned to the shareholders.
Current wording
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.
Previous wording
During 2023, cash flow provided by operating activities was $257.9 million consisting of net income and non-cash items amounting to $284.0 million and changes in certain assets and liabilities netting to an outflow of $26.1 million. Contributing to the change in certain assets and liabilities were a decrease in accounts payable and accrued liabilities of $32.5 million, an increase in accounts receivable of $11.5 million and a decrease in accrued pension and postretirement benefits of $10.1 million, partially offset by a decrease in inventories of $17.6 million.
Current wording
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.
Previous wording
During 2024, cash flow provided by operating activities was $277.1 million, compared to $257.9 million in 2023. During 2024, cash flow provided by operating activities consisted 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.
Current wording
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.
Previous wording
Cash Flow Used for Investing Activities
Current wording
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.
Previous wording
Cash flow used for investing activities was $109.4 million for 2024, an increase of $20.2 million, compared to $89.2 million in 2023. During 2024, cash flow used for investing activities 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.
Current wording
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.
Previous wording
Cash flow used for financing activities was $141.7 million for 2024 compared to $143.1 million in 2023. During 2024, cash flow used for financing activities primarily 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.
Current wording
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.
Previous wording
Cash flow used for financing activities was $143.1 million for 2023 and included $64.5 million of cash dividends paid to shareholders, $49.3 million in common shares repurchased, primarily under the share repurchase program, $19.0 million from the repayment of borrowings under the Credit Agreement and $6.0 million of the effect of employee benefit and stock plans and dividend reinvestment.
Current wording
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.
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
Cash Flow Provided by Operating Activities
Previous report — wording carried elsewhere
Cash flow used for investing activities was $89.2 million for 2023 and included capital expenditures, net of $89.4 million, which consisted primarily of equipment upgrades.
Previous report — wording carried elsewhere
Cash Flow Used for Financing Activities
Previous report — wording carried elsewhere
In 2024, we elected to implement Step 0 and were not required to conduct the quantitative analysis. In 2023 and 2022, we performed quantitative analyses using a combination of a discounted cash flow analysis and market multiples based upon historical and projected financial information. No impairment was recorded during 2024, 2023 and 2022.