KENNAMETAL INC

Previous wording

Our sales of $529.5 million for the three months ended December 31, 2025 increased 10 percent from $482.1 million in the prior year quarter, reflecting organic sales growth of 10 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 1 percent.

Current wording

Our sales of $592.6 million for the three months ended March 31, 2026 increased 22 percent from $486.4 million in the prior year quarter, reflecting organic sales growth of 19 percent and a favorable currency exchange effect of 5 percent, partially offset by a divestiture effect of 2 percent.

Previous wording

Operating income for the three months ended December 31, 2025 was $52.7 million compared to $31.7 million in the prior year quarter. The year-over-year increase of $21.0 million was driven by the favorable timing of pricing compared to raw material costs of approximately $17 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes in Metal Cutting, and incremental year-over-year restructuring savings of approximately $8 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, a prior year benefit from insurance proceeds of approximately $3 million that did not repeat in the current year and an increase in incremental restructuring and related charges of approximately $2 million.

Current wording

Operating income for the three months ended March 31, 2026 was $79.4 million compared to $44.1 million in the prior year quarter. The year-over-year increase of $35.4 million was driven by the favorable timing of pricing compared to raw material costs of approximately $39 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes, incremental year-over-year restructuring savings of approximately $7 million, favorable foreign currency exchange of approximately $4 million and a decrease in restructuring and related charges of approximately $3 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter within the Infrastructure segment, and higher raw material costs in the Metal Cutting segment.

Previous wording

Operating margin for the three months ended December 31, 2025 was 9.9 percent compared to 6.6 percent in the prior year quarter. The Metal Cutting and Infrastructure segments had operating margins of 9.0 percent and 11.8 percent, respectively, for the three months ended December 31, 2025.

Current wording

Operating margin for the three months ended March 31, 2026 was 13.4 percent compared to 9.1 percent in the prior year quarter. The Metal Cutting and Infrastructure segments had operating margins of 10.7 percent and 18.1 percent, respectively, for the three months ended March 31, 2026.

Previous 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.

Current wording

Additionally, our business has been affected by foreign currency exchange, inflationary headwinds and rising tungsten prices. These pressures, driven by tightening global supply, geopolitical factors and evolving trade policies have increased raw material costs and caused other business disruptions. We have been able to mitigate these impacts through price increases on our products, supplier diversification and inventory management initiatives. However, we cannot predict the ultimate effect of these issues on our business, operating results, cash flows or financial condition. Continued volatility in commodity pricing, foreign exchange rates and supply availability could adversely affect our margins, operations and liquidity and may increase the risk of future impairment charges, including goodwill and other intangible assets. We are continuing to monitor macroeconomic conditions and will take actions to mitigate these effects to the extent possible.

Previous wording

For the three months ended December 31, 2025, earnings per diluted share (EPS) was $0.44 compared to EPS of $0.23 in the prior year quarter.

Current wording

For the three months ended March 31, 2026, earnings per diluted share (EPS) was $0.75 compared to EPS of $0.41 in the prior year quarter.

Previous wording

Net cash flow provided by operating activities was $72.6 million during the six months ended December 31, 2025 compared to $100.9 million during the prior year period. Capital expenditures were $35.7 million and $44.0 million during the six months ended December 31, 2025 and 2024, respectively. During the six months ended December 31, 2025, the Company returned $40.5 million to shareholders through $10.1 million in share repurchases and $30.4 million in dividends. The Company has a long history of consistently paying dividends to shareholders since its listing on the New York Stock Exchange in 1967.

Current wording

Net cash flow provided by operating activities was $69.7 million during the nine months ended March 31, 2026 compared to $129.7 million during the prior year period. Capital expenditures were $53.7 million and $67.5 million during the nine months ended March 31, 2026 and 2025, respectively. During the nine months ended March 31, 2026, the Company returned $55.7 million to shareholders through $10.1 million in share repurchases and $45.6 million in dividends. The Company has a long history of consistently paying dividends to shareholders since its listing on the New York Stock Exchange in 1967.

Previous wording

SALES Sales for the three months ended December 31, 2025 were $529.5 million, an increase of $47.5 million, or 10 percent, from $482.1 million in the prior year quarter, reflecting organic sales growth of 10 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 1 percent.

Current wording

SALES Sales for the three months ended March 31, 2026 were $592.6 million, an increase of $106.2 million, or 22 percent, from $486.4 million in the prior year quarter, reflecting organic sales growth of 19 percent and a favorable currency exchange effect of 5 percent, partially offset by a divestiture effect of 2 percent.

Previous wording

Sales for the six months ended December 31, 2025 were $1,027.5 million, an increase of $63.5 million, or 7 percent, from $964.0 million in the prior year period, reflecting organic sales growth of 7 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 1 percent.

Current wording

Sales for the nine months ended March 31, 2026 were $1,620.1 million, an increase of $169.7 million, or 12 percent, from $1,450.4 million in the prior year period, reflecting organic sales growth of 11 percent and a favorable currency exchange effect of 2 percent, partially offset by a divestiture effect of 1 percent.

Previous wording

GROSS PROFIT Gross profit for the three months ended December 31, 2025 was $173.9 million, an increase of $28.8 million from $145.0 million in the prior year quarter. The increase was driven by the favorable timing of pricing compared to raw material costs of approximately $17 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes in the Metal Cutting segment, and incremental year-over-year restructuring savings. These factors were partially offset by higher compensation costs, tariffs and general inflation, and a prior year benefit from insurance proceeds of approximately $3 million that did not repeat in the current year. Gross profit margin for the three months ended December 31, 2025 was 32.8 percent, as compared to 30.1 percent in the prior year quarter.

Current wording

GROSS PROFIT Gross profit for the three months ended March 31, 2026 was $208.0 million, an increase of $51.6 million from $156.4 million in the prior year quarter. The increase was driven by the favorable timing of pricing compared to raw material costs of approximately $39 million within the Infrastructure segment, pricing and tariff surcharges within the Metal Cutting segment, higher sales and production volumes, favorable foreign currency exchange and incremental year-over-year restructuring savings. These factors were partially offset by higher compensation costs, tariffs and general inflation, the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter within the Infrastructure segment, and higher raw material costs in the Metal Cutting segment. Gross profit margin for the three months ended March 31, 2026 was 35.1 percent, as compared to 32.1 percent in the prior year quarter.

Previous wording

Gross profit for the six months ended December 31, 2025 was $328.4 million, an increase of $32.4 million from $296.0 million in the prior year period. The increase was driven by the favorable timing of pricing compared to raw material costs within the Infrastructure segment of approximately $25 million, pricing and tariff surcharges within the Metal cutting segment, incremental year-over-year restructuring savings, and higher sales and production volumes in the Metal Cutting segment. These factors were partially offset by higher compensation costs, tariffs and general inflation, and a prior year benefit from insurance proceeds of approximately $7 million that did not repeat in the current year. Gross profit margin for the six months ended December 31, 2025 was 32.0 percent, as compared to 30.7 percent in the prior year period.

Current wording

Gross profit for the nine months ended March 31, 2026 was $536.4 million, an increase of $84.0 million from $452.4 million in the prior year period. The increase was driven by the favorable timing of pricing compared to raw material costs within the Infrastructure segment of approximately $64 million, pricing and tariff surcharges within the Metal Cutting segment, favorable foreign currency exchange, incremental year-over-year restructuring savings and higher sales and production volumes. These factors were partially offset by tariffs and general inflation and higher compensation costs. Gross profit margin for the nine months ended March 31, 2026 was 33.1 percent, as compared to 31.2 percent in the prior year period.

Previous wording

OPERATING EXPENSE Operating expense for the three months ended December 31, 2025 was $116.3 million compared to $109.3 million for the three months ended December 31, 2024. Operating expense for the six months ended December 31, 2025 was $229.3 million compared to $221.0 million for the six months ended December 31, 2024.

Current wording

OPERATING EXPENSE Operating expense for the three months ended March 31, 2026 was $124.0 million compared to $104.0 million for the three months ended March 31, 2025. Operating expense for the nine months ended March 31, 2026 was $353.4 million compared to $325.0 million for the nine months ended March 31, 2025. The increase in operating expense was primarily due to higher compensation costs, partially offset by year-over-year restructuring savings.

Previous wording

Research and development expenses included in operating expense totaled $10.3 million and $11.0 million for the three months ended December 31, 2025 and 2024, respectively, and $20.9 million and $22.1 million for the six months ended December 31, 2025 and 2024, respectively.

Current wording

Research and development expenses included in operating expense totaled $11.0 million and $11.1 million for the three months ended March 31, 2026 and 2025, respectively, and $31.9 million and $33.2 million for the nine months ended March 31, 2026 and 2025, respectively.

Previous wording

RESTRUCTURING AND OTHER CHARGES, NETIn 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 $18.6 million, compared to a revised target of approximately $20 million, were recorded through December 31, 2025, consisting of $15.1 million in Metal Cutting and $3.6 million in Infrastructure. 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 wording

RESTRUCTURING AND OTHER CHARGES, NETIn 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 $22.0 million, compared to a target of approximately $20 million, were recorded through March 31, 2026, consisting of $16.6 million in Metal Cutting and $5.5 million in Infrastructure. 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.

Previous wording

We recorded restructuring and related charges of $3.1 million for the three months ended December 31, 2025, which consisted of $2.1 million in Metal Cutting and $0.9 million in Infrastructure. Included in this amount were restructuring related charges of $0.5 million included in cost of goods sold. We recorded restructuring and related charges of $6.2 million for the six months ended December 31, 2025, which consisted of $5.4 million in Metal Cutting and $0.8 million in Infrastructure. Included in this amount were restructuring related charges of $2.1 million included in cost of goods sold.

Current wording

We recorded restructuring and related charges of $2.4 million for the three months ended March 31, 2026, which consisted of $1.9 million in Metal Cutting and $0.4 million in Infrastructure. Included in this amount were restructuring related charges of $0.3 million included in cost of goods sold. We recorded restructuring and related charges of $8.6 million for the nine months ended March 31, 2026, which consisted of $7.4 million in Metal Cutting and $1.3 million in Infrastructure. Included in this amount were restructuring related charges of $2.4 million included in cost of goods sold.

Previous wording

We recorded restructuring and related charges of $1.4 million for the three months ended December 31, 2024, which consisted of $1.2 million in Metal Cutting and $0.2 million in Infrastructure. We recorded restructuring and related charges of $2.0 million for the six months ended December 31, 2024, which consisted of $1.8 million in Metal Cutting and $0.2 million in Infrastructure.

Current wording

We recorded restructuring and related charges of $5.8 million for the three months ended March 31, 2025, which consisted of $4.3 million in Metal Cutting and $1.5 million in Infrastructure. Of this amount, restructuring-related charges of $0.2 million were included in cost of goods sold. We recorded restructuring and related charges of $7.9 million for the nine months ended March 31, 2025, which consisted of $6.2 million in Metal Cutting and $1.7 million in Infrastructure. Of this amount, restructuring-related charges of $0.4 million were included in cost of goods sold.

Previous wording

INTEREST EXPENSE Interest expense for the three months ended December 31, 2025 decreased to $6.1 million compared to $6.2 million for the three months ended December 31, 2024. Interest expense for the six months ended December 31, 2025 decreased to $12.3 million compared to $12.5 million for the six months ended December 31, 2024.

Current wording

INTEREST EXPENSE Interest expense for the three months ended March 31, 2026 increased to $6.3 million compared to $6.2 million for the three months ended March 31, 2025. Interest expense for the nine months ended March 31, 2026 decreased to $18.5 million compared to $18.7 million for the nine months ended March 31, 2025.

Previous wording

OTHER INCOME, NET Other income, net for the three months ended December 31, 2025 was $2.1 million compared to $1.5 million during the three months ended December 31, 2024. Other income, net for the six months ended December 31, 2025 was $4.4 million compared to $3.1 million during the six months ended December 31, 2024. The increase in other income was primarily due to foreign currency transaction gains including preferential exchange rates in Bolivia, partially offset by higher net periodic pension expense in the current year.

Current wording

OTHER INCOME, NET Other income, net for the three months ended March 31, 2026 was $6.5 million compared to $5.5 million during the three months ended March 31, 2025. Other income, net for the nine months ended March 31, 2026 was $11.0 million compared to $8.6 million during the nine months ended March 31, 2025. The increase in other income, net was primarily due to foreign currency transaction gains including preferential exchange rates in Bolivia, partially offset by higher net periodic pension expense in the current year.

Previous wording

PROVISION FOR INCOME TAXESThe effective income tax rates for the three months ended December 31, 2025 and 2024 were 27.7 percent and 29.4 percent, respectively. The year-over-year change is primarily due to favorable geographical mix which was partially offset by a charge recorded in the current year quarter for an income tax audit settlement in China and a benefit recorded in the prior year quarter for the advanced manufacturing production credit.

Current wording

PROVISION FOR INCOME TAXESThe effective income tax rates for the three months ended March 31, 2026 and 2025 were 23.3 percent and 23.6 percent, respectively. The year-over-year change is primarily due to favorable geographical mix, partially offset by a larger net benefit from the advanced manufacturing production credit under the Inflation Reduction Act in the prior year quarter.

Previous wording

The effective income tax rates for the six months ended December 31, 2025 and 2024 were 27.4 and 27.1 percent, respectively. The year-over-year change is primarily due to a benefit recorded in the prior year period for interest received to resolve an income tax dispute in India, current year adjustments that include a tax rate change enacted in Germany and an income tax audit settlement in China, and favorable geographical mix.

Current wording

The effective income tax rates for the nine months ended March 31, 2026 and 2025 were 25.4 percent and 25.6 percent, respectively. The year-over-year change is primarily due to favorable geographical mix and current year adjustments that include a tax rate change enacted in Germany and an income tax audit settlement in China, partially offset by a larger net benefit from the advanced manufacturing production credit under the Inflation Reduction Act in the prior year and the benefit recorded in the prior year for interest received to resolve an income tax dispute in India.

Previous wording

For the three months ended December 31, 2025, Metal Cutting sales increased 11 percent compared to the prior year quarter. The increase was driven by an organic sales growth of 9 percent and a favorable currency exchange effect of 2 percent. Sales in the Aerospace & Defense end market increased as a result of improved build rates in the Americas, easing supply chain pressures in EMEA and our global strategic focus. Energy end market sales increased in all regions and primarily in the Americas due to data center power generation initiatives. General Engineering end market sales increased primarily due to order timing within the indirect channel and pricing. Transportation end market sales increased due to internal combustion engine and transmission wins in the Americas and pricing.

Current wording

For the three months ended March 31, 2026, Metal Cutting sales increased 18 percent compared to the prior year quarter. The increase was driven by organic sales growth of 12 percent and a favorable currency exchange effect of 6 percent. General Engineering end market sales increased primarily due to pricing and demand within the indirect channel. Sales in the Aerospace & Defense end market increased as a result of improved build rates and our global strategic focus. Energy end market sales increased in all regions and primarily in the Americas due to data center power generation initiatives. Transportation end market sales increased in the Americas and Asia Pacific primarily due to pricing, partially offset by declines in EMEA due to lower vehicle production. The decline in EMEA was offset by favorable currency exchange and pricing.

Previous wording

For the six months ended December 31, 2025, Metal Cutting sales increased 8 percent compared to the prior year period. The increase was driven by an organic sales growth of 6 percent and a favorable currency exchange effect of 2 percent. Aerospace & Defense end market sales increased as a result of improved build rates in the Americas, easing supply chain pressures in EMEA and our global strategic focus. Energy end market sales increased in the Americas and Asia Pacific primarily due to our strategic focus. Sales in the General Engineering end market increased primarily due to order timing within the indirect channel and pricing. Transportation end market sales increased primarily in the Americas due to light vehicle production and pricing as well as favorable currency exchange, the effects of which were partially offset by declines in Asia Pacific due to project timing and EMEA due to a decline in vehicle production.

Current wording

For the nine months ended March 31, 2026, Metal Cutting sales increased 11 percent compared to the prior year period. The increase was driven by organic sales growth of 8 percent and a favorable currency exchange effect of 3 percent. Sales in the General Engineering end market increased primarily due to pricing and demand within the indirect channel within the Americas and Asia Pacific. Aerospace & Defense end market sales increased as a result of improved build rates in the Americas, easing supply chain pressures in EMEA and our global strategic focus. Energy end market sales increased primarily due to our strategic focus and pricing. Transportation end market sales increased primarily in the Americas due to pricing, partially offset by declines in EMEA due to lower vehicle production. The decline in EMEA was offset by favorable currency exchange and pricing.

Previous wording

For the three months ended December 31, 2025, Metal Cutting operating income was $29.8 million compared to $16.6 million in the prior year quarter. The increase in operating income was driven by pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $6 million, partially offset by higher compensation costs, and tariffs and general inflation.

Current wording

For the nine months ended March 31, 2026, Metal Cutting operating income was $89.4 million compared to $65.3 million in the prior year period. The increase in operating income was primarily due to pricing and tariff surcharges, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $17 million, partially offset by higher compensation costs, and tariffs and general inflation.

Previous wording

For the three months ended December 31, 2025, Infrastructure sales increased 8 percent from the prior year quarter. The increase was driven by an organic sales growth of 11 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 4 percent. Aerospace & Defense end market sales increased primarily in the Americas as a result of the execution of our growth initiatives and project timing. Earthworks end market sales increased as a result of share gains in mining and higher global construction volumes due to buy-ahead and share gains. Sales in the General Engineering end market increased in the Americas and Asia Pacific due to pricing, share gains, project timing and buy-ahead, partially offset by the effect of a divestiture and a decline in EMEA due to lower ceramics sales. Energy end market sales increased in the Americas due to pricing, which was offset by the effect of a divestiture, declines in EMEA and Asia Pacific from softer market conditions and order timing, and unfavorable currency exchange.

Current wording

For the three months ended March 31, 2026, Infrastructure sales increased 29 percent from the prior year quarter. The increase was driven by organic sales growth of 30 percent and a favorable currency exchange effect of 4 percent, partially offset by a divestiture effect of 5 percent. Earthworks end market sales increased in all regions as a result of pricing, share gains in mining and construction and higher demand in construction from availability of material. Energy end market sales increased in the Americas due to pricing, which was partially offset by the effect of a divestiture and declines in EMEA and Asia Pacific from softer market conditions and order timing. Sales in the General Engineering end market increased in Asia Pacific and the Americas due to pricing, share gains and project timing, partially offset by the effect of a divestiture and a decline in EMEA due to lower ceramics sales. Aerospace & Defense end market sales increased primarily in the Americas as a result of the execution of our growth initiatives and project timing.

Previous wording

On a regional basis, sales in the Americas increased in all end markets, partially offset by the effect of a divestiture. Sales in EMEA decreased due to General Engineering, the effect of which was more than offset by favorable currency exchange and sales in Earthworks. Sales in Asia Pacific increased primarily due to General Engineering.

Current wording

On a regional basis, sales in the Americas increased primarily due to pricing and higher volume in Earthworks and Aerospace & Defense, partially offset by the effect of a divestiture. Sales in EMEA declined in General Engineering, the effect of which was offset by price, favorable currency exchange and higher demand in Earthworks. Sales in Asia Pacific increased primarily due to pricing and higher demand in General Engineering and Earthworks.

Previous wording

For the three months ended December 31, 2025, Infrastructure operating income was $23.4 million compared to $15.6 million in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $17 million, and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by higher compensation costs, a prior year benefit from net insurance proceeds of approximately $3 million that did not repeat in the current year and general inflation.

Current wording

For the three months ended March 31, 2026, Infrastructure operating income was $42.5 million compared to $19.4 million in the prior year quarter. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $39 million and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act in the current quarter, higher compensation costs and general inflation.

Previous wording

For the six months ended December 31, 2025, Infrastructure sales increased 4 percent from the prior year period. The increase was driven by an organic sales growth of 7 percent and a favorable currency exchange effect of 1 percent, partially offset by a divestiture effect of 4 percent. Aerospace & Defense end market sales increased in the Americas and EMEA as a result of the execution of our growth initiatives and project timing. Earthworks end market sales increased as a result of share gains in mining and higher global construction volumes due to buy-ahead and share gains. Sales in the General Engineering end market increased in the Americas and Asia Pacific due to pricing, share gains and project timing, partially offset by the effect of a divestiture and a decline in EMEA due to lower ceramics sales. Energy end market sales decreased in the Americas primarily due to the effect of a divestiture, and in EMEA and Asia Pacific due to softer market conditions and order timing.

Current wording

For the nine months ended March 31, 2026, Infrastructure sales increased 13 percent from the prior year period. The increase was driven by organic sales growth of 15 percent and a favorable currency exchange effect of 2 percent, partially offset by a divestiture effect of 4 percent. Earthworks end market sales increased as a result of pricing, share gains in mining and construction and higher demand in construction from availability of material. Sales in the General Engineering end market increased in Asia Pacific and the Americas due to pricing, share gains and project timing, partially offset by the effect of a divestiture and a decline in EMEA due to lower ceramics sales. Aerospace & Defense end market sales increased in Americas and EMEA as a result of the execution of our growth initiatives and project timing. Energy end market sales increased in the Americas primarily due to pricing, which was partially offset by the effect of a divestiture and declines in EMEA and Asia Pacific from softer market conditions and order timing.

Previous wording

On a regional basis, sales in the Americas increased in all end markets, partially offset by the effect of a divestiture. Sales in EMEA decreased due to a decline in General Engineering, the effect of which was more than offset by favorable currency exchange and sales in Earthworks. Sales in Asia Pacific increased primarily due to General Engineering and Earthworks.

Current wording

On a regional basis, sales in the Americas increased in all end markets due to price and higher volume in Earthworks and Aerospace & Defense, partially offset by the effect of a divestiture. Sales in EMEA decreased due to a decline in General Engineering, which was partially offset by favorable currency exchange and sales in Earthworks. Sales in Asia Pacific increased primarily due to price and higher demand in General Engineering and Earthworks.

Previous wording

For the six months ended December 31, 2025, Infrastructure operating income was $40.0 million compared to $28.3 million in the prior year period. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $25 million, and incremental year-over-year restructuring savings of approximately $4 million. These factors were partially offset by higher compensation costs, a prior year benefit from net insurance proceeds of approximately $7 million that did not repeat in the current year and general inflation.

Current wording

For the nine months ended March 31, 2026, Infrastructure operating income was $82.5 million compared to $47.8 million in the prior year period. The increase in operating income was driven by the favorable timing of pricing compared to raw material costs of approximately $64 million and incremental year-over-year restructuring savings of approximately $5 million. These factors were partially offset by higher compensation costs, the net effect of approximately $8 million from a normalized advanced manufacturing production credit under the Inflation Reduction Act, a prior year benefit from net insurance proceeds of approximately $7 million that did not repeat in the current year and general inflation.

Previous wording

For the three months ended December 31, 2025, Corporate expense decreased by an immaterial amount from the prior year quarter. For the six months ended December 31, 2025, Corporate expense increased by $0.1 million from the prior year quarter.

Current wording

For the three months ended March 31, 2026, Corporate expense increased $0.9 million from the prior year quarter. For the nine months ended March 31, 2026, Corporate expense increased by $1.0 million from the prior year quarter.

Previous wording

Cash flow from operations is the primary source of funding for our capital expenditures. For the six months ended December 31, 2025, cash flow provided by operating activities was $72.6 million.

Current wording

Cash flow from operations is the primary source of funding for our capital expenditures. For the nine months ended March 31, 2026, cash flow provided by operating activities was $69.7 million.

Previous wording

As of December 31, 2025, we were in compliance with all the covenants of the Credit Agreement, and there were no borrowings outstanding and $650.0 million of additional availability. There were no borrowings outstanding as of June 30, 2025.

Current wording

As of March 31, 2026, we were in compliance with all the covenants of the Credit Agreement, and there were $15.3 million borrowings outstanding and $634.7 million of additional availability. There were no borrowings outstanding as of June 30, 2025.

Previous wording

At December 31, 2025, cash and cash equivalents were $129.3 million. Total Kennametal shareholders' equity was $1,315.0 million and total debt was $598.6 million. Our current senior credit ratings are at investment grade levels. We believe that our current financial position, liquidity and credit ratings provide us access to the capital markets. We believe that we have sufficient resources available to meet cash requirements for the next 12 months. 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. There have been no material changes in our contractual obligations and commitments since June 30, 2025.

Current wording

At March 31, 2026, cash and cash equivalents were $106.9 million. Total Kennametal shareholders' equity was $1,354.7 million and total debt was $614.1 million. Our current senior credit ratings are at investment grade levels. We believe that our current financial position, liquidity and credit ratings provide us access to the capital markets. We believe that we have sufficient resources available to meet cash requirements for the next 12 months. 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. As the availability and price of tungsten continues to evolve, we will evaluate the potential for additional funding to support our liquidity position. There have been no material changes in our contractual obligations and commitments since June 30, 2025.

Previous wording

Share Repurchase Program In February 2024, the Board of Directors of the Company authorized the Company to purchase up to $200 million of the Company's common stock over a three-year period. During the three and six months ended December 31, 2025, the Company repurchased an immaterial amount and $10 million, respectively, of Kennametal common stock. Inception-to-date the Company has repurchased $70 million of Kennametal common stock under the $200 million three-year program.

Current wording

Share Repurchase Program In February 2024, the Board of Directors of the Company authorized the Company to purchase up to $200 million of the Company's common stock over a three-year period. During the nine months ended March 31, 2026, the Company repurchased $10 million of Kennametal common stock. Inception-to-date the Company has repurchased $70 million of Kennametal common stock under the $200 million three-year program.

Previous wording

Dividends During the six months ended December 31, 2025, the Company paid a total of $30.4 million in dividends to Kennametal Shareholders.

Current wording

Dividends During the nine months ended March 31, 2026, the Company paid a total of $45.6 million in dividends to Kennametal Shareholders.

Previous wording

During the six months ended December 31, 2025, cash flow provided by operating activities was $72.6 million, compared to $100.9 million for the prior year period. Cash flow provided by operating activities for the current year period consisted of net income and non-cash items amounting to an inflow of $149.8 million and changes in certain assets and liabilities netting to an outflow of $77.2 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $84.1 million and an increase in other, primarily prepaid assets, of $17.5 million. Partially offsetting these cash outflows was an increase in accounts payable and accrued liabilities of $14.7 million and a decrease in accounts receivable of $7.8 million.

Current wording

During the nine months ended March 31, 2026, cash flow provided by operating activities was $69.7 million, compared to $129.7 million for the prior year period. Cash flow provided by operating activities for the current year period consisted of net income and non-cash items amounting to an inflow of $260.4 million and changes in certain assets and liabilities netting to an outflow of $190.7 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $216.0 million resulting largely from rising tungsten prices, an increase in accounts receivable of $42.5 million, an increase in other current assets of $25.3 million and an increase in other, primarily long-term assets, of $10.5 million. Partially offsetting these cash outflows was an increase in accounts payable and accrued liabilities of $101.7 million.

Previous wording

During the six months ended December 31, 2024, cash flow provided by operating activities was $100.9 million and consisted of net income and non-cash items amounting to an inflow of $118.7 million and changes in certain assets and liabilities netting to an outflow of $17.8 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $30.7 million and a decrease in accounts payable and accrued liabilities of $27.2 million. Partially offsetting these cash outflows was a decrease in accounts receivable of $43.2 million.

Current wording

During the nine months ended March 31, 2025, cash flow provided by operating activities was $129.7 million and consisted of net income and non-cash items amounting to an inflow of $194.3 million and changes in certain assets and liabilities netting to an outflow of $64.5 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $41.3 million, a decrease in accounts payable and accrued liabilities of $14.1 million and a decrease in accrued income taxes of $11.7 million. Partially offsetting these cash outflows was a decrease in accounts receivable of $10.5 million.

Previous wording

Cash flow used in investing activities was $33.8 million for the six months ended December 31, 2025, compared to $36.6 million for the prior year period. During the current year period, cash flow used in investing activities included capital expenditures of $35.7 million, which consisted primarily of equipment upgrades.

Current wording

Cash flow used in investing activities was $51.6 million for the nine months ended March 31, 2026, compared to $60.1 million for the prior year period. During the current year period, cash flow used in investing activities included capital expenditures of $53.7 million, which consisted primarily of equipment upgrades, partially offset by proceeds from disposals of $1.7 million.

Previous wording

Cash flow used in investing activities was $36.6 million for the six months ended December 31, 2024, including capital expenditures of $44.0 million, which consisted primarily of equipment upgrades, partially offset by proceeds from insurance recoveries of $7.2 million.

Current wording

Cash flow used in investing activities was $60.1 million for the nine months ended March 31, 2025, including capital expenditures of $67.5 million, which consisted primarily of equipment upgrades, partially offset by proceeds from insurance recoveries of $7.2 million.

Previous wording

Cash flow used in financing activities was $49.6 million for the six months ended December 31, 2025 compared to $68.0 million in the prior year period. During the current year period, cash flow used in financing activities primarily included $30.4 million of cash dividends paid to Kennametal Shareholders, $10.1 million in common shares repurchased and $7.7 million of the effect of employee benefit and stock plans and dividend reinvestment.

Current wording

Cash flow used in financing activities was $50.1 million for the nine months ended March 31, 2026 compared to $98.0 million in the prior year period. During the current year period, cash flow used in financing activities primarily included $45.6 million of cash dividends paid to Kennametal Shareholders, $10.1 million in common shares repurchased and $8.0 million of the effect of employee benefit and stock plans and dividend reinvestment, partially offset by borrowings of $15.3 million under the Credit Agreement.

Previous wording

Cash flow used in financing activities was $68.0 million for the six months ended December 31, 2024 and primarily included $31.1 million of cash dividends paid to Kennametal Shareholders, $30.1 million in common shares repurchased and $6.2 million of the effect of employee benefit and stock plans and dividend reinvestment.

Current wording

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.