KENNAMETAL INC

Previous wording

Throughout MD&A, we refer to measures used by management to evaluate performance. We also refer to a number of financial measures that are not defined under accounting principles generally accepted in the United States of America (U.S. GAAP), including organic sales growth (decline), constant currency regional sales growth (decline) and constant currency end market sales growth (decline). We provide the definitions of these non-GAAP financial measures at the end of the MD&A section as well as details on the use and derivation of these financial measures.

Current wording

Throughout MD&A, we refer to measures used by management to evaluate performance. We also refer to a number of financial measures that are not defined under accounting principles generally accepted in the United States of America (U.S. GAAP), including organic sales growth, constant currency regional sales growth and constant currency end market sales growth. We provide the definitions of these non-GAAP financial measures at the end of the MD&A section as well as details on the use and derivation of these financial measures.

Previous 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.

Current wording

Our sales of $768.2 million for the three months ended September 30, 2026 increased 54 percent from $498.0 million in the prior year quarter, reflecting organic sales growth of 54 percent.

Previous 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.

Current wording

Operating income for the three months ended September 30, 2026 was $379.3 million compared to $37.6 million in the prior year quarter. The year-over-year increase of $341.7 million was driven by the favorable timing of raw material-related pricing compared to costs of approximately $323 million, non-raw material-related pricing and tariff income, higher sales and production volumes in Metal Cutting, an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act within the Infrastructure segment, and incremental year-over-year restructuring savings of approximately $3 million. These factors were partially offset by tariffs and general inflation, higher compensation costs, an impairment of an equity investment of approximately $5 million and a charge of approximately $5 million related to the write-off of certain fixed assets in the current quarter.

Previous 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.

Current wording

Operating margin for the three months ended September 30, 2026 was 49.4 percent compared to 7.5 percent in the prior year quarter. The Metal Cutting and Infrastructure segments had operating margins of 29.7 percent and 70.7 percent, respectively, for the three months ended September 30, 2026.

Previous wording

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). As a result of this ruling, companies may be eligible for a refund of tariffs previously paid on imported goods. We are continuing to monitor these developments and their potential impact on our results of operations, financial position and cash flows.

Current wording

In February 2026, the U.S. Supreme Court issued a ruling invalidating certain tariffs previously imposed under the International Emergency Economic Powers Act (IEEPA). As a result of this ruling, companies may be eligible for a refund of tariffs previously paid on imported goods. We are pursuing potential recovery opportunities arising from this ruling. The benefit associated with tariff refunds received during the three months ended September 30, 2026 was recognized as a reduction of cost of goods sold. The Company has not recorded any liabilities associated with potential tariff recoveries, as any refunds received are expected to be reinvested in the business and no obligation to reimburse customers existed as of September 30, 2026.

Previous 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.

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. In addition, significant declines in raw material costs could reduce the net realizable value of our inventory, potentially requiring write-downs. 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 March 31, 2026, earnings per diluted share (EPS) was $0.75 compared to EPS of $0.41 in the prior year quarter.

Current wording

For the three months ended September 30, 2026, earnings per diluted share (EPS) was $3.48 compared to $0.30 in the prior year quarter.

Previous 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.

Current wording

Net cash flow used in operating activities was $201.3 million during the three months ended September 30, 2026 compared to net cash flow provided by operating activities of $17.5 million during the prior year period. Capital expenditures were $10.8 million and $23.0 million during the three months ended September 30, 2026 and 2025, respectively. During the three months ended September 30, 2026, the Company returned $15.2 million to shareholders through 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 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.

Current wording

SALES Sales for the three months ended September 30, 2026 were $768.2 million, an increase of $270.2 million, or 54 percent, from $498.0 million in the prior year quarter, reflecting organic sales growth of 54 percent.

Previous 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.

Current wording

GROSS PROFIT Gross profit for the three months ended September 30, 2026 was $513.6 million, an increase of $359.0 million from $154.6 million in the prior year quarter. The increase was driven by the favorable timing of raw material-related pricing compared to costs of approximately $323 million, non-raw material-related pricing and tariff income, higher sales and production volumes in Metal Cutting, and an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act within the Infrastructure segment. These factors were partially offset by tariffs and general inflation, and higher compensation costs. Gross profit margin for the three months ended September 30, 2026 was 66.9 percent, as compared to 31.0 percent in the prior year quarter.

Previous 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.

Current wording

OPERATING EXPENSE Operating expense for the three months ended September 30, 2026 was $126.8 million compared to $113.0 million for the three months ended September 30, 2025.

Previous 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.

Current wording

Research and development expenses included in operating expense totaled $11.0 million and $10.6 million for the three months ended September 30, 2026 and 2025, respectively.

Previous 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.

Current wording

PROVISION FOR INCOME TAXESThe effective income tax rates for the three months ended September 30, 2026 and 2025 were 23.1 percent and 26.9 percent, respectively. The year-over-year change is primarily due to favorable geographic earnings mix and lower U.S. tax provided on international earnings, partially offset by a benefit recorded in the prior year quarter for a tax rate change enacted in Germany.

Previous 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.

Current wording

For the three months ended September 30, 2026, Metal Cutting sales increased 28 percent compared to the prior year quarter. The increase was driven by organic sales growth of 29 percent, partially offset by an unfavorable business days effect of 1 percent. General Engineering end market sales increased primarily due to pricing and share gain within the indirect channel. Sales in the Aerospace & Defense end market increased as a result of pricing, improved build rates, and our global strategic focus, primarily in EMEA. Energy end market sales increased in all regions and primarily in the Americas due to strategic focus in the power generation market and pricing. Transportation end market sales increased primarily due to pricing, partially offset by weaker vehicle production, particularly in EMEA.

Previous wording

For the nine months ended March 31, 2026, sales increased across all regions. Sales in the Americas increased primarily due to pricing and indirect channel demand within General Engineering, improving build rates in Aerospace & Defense and data center power generation initiatives in Energy. Sales growth in EMEA was driven primarily by our global strategic focus on Aerospace & Defense. The sales increase in Asia Pacific was driven primarily by pricing and demand within the indirect channel in General Engineering and our global strategic focus in Aerospace & Defense.

Current wording

For the three months ended September 30, 2026, sales increased across all regions. Sales increased in the Americas primarily due to pricing and indirect channel demand within General Engineering, data center power generation initiatives in Energy, and improving build rates in Aerospace & Defense. Sales growth in EMEA was driven primarily by pricing and our global strategic focus on Aerospace & Defense. The sales increase in Asia Pacific was driven primarily by pricing and demand within the indirect channel in General Engineering and our global strategic focus on Aerospace & Defense.

Previous wording

For the three months ended March 31, 2026, Metal Cutting operating income was $38.1 million compared to $24.9 million in the prior year quarter. The increase in operating income was driven by pricing and tariff surcharges, higher sales and production volumes, incremental year-over-year restructuring savings of approximately $5 million, favorable foreign currency exchange of approximately $3 million and a decrease in restructuring and related charges of approximately $2 million. These factors were partially offset by higher compensation costs, tariffs and general inflation, and higher raw material costs.

Current wording

For the three months ended September 30, 2026, Metal Cutting operating income was $118.3 million compared to $21.6 million in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $65 million, non-raw material-related pricing and tariff income, higher sales and production volumes and incremental year-over-year restructuring savings of approximately $2 million. These factors were partially offset by an impairment of an equity investment of approximately $5 million, higher compensation costs, and tariffs and general inflation in the current quarter.

Previous 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.

Current wording

For the three months ended September 30, 2026, Infrastructure sales increased 98 percent from the prior year quarter. The increase was driven by organic sales growth of 97 percent and a favorable currency exchange effect of 1 percent. Energy end market sales increased primarily due to pricing, partially offset by lower volume. Earthworks end market sales increased in all regions as a result of pricing, partially offset by lower volume due to price sensitivity and a mine incident in China. Sales in the General Engineering end market increased due to pricing, partially offset by lower volumes in the Americas. Aerospace & Defense end market sales increased primarily in EMEA and the Americas as a result of pricing and the execution of our growth initiatives.

Previous 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.

Current wording

On a regional basis, sales in the Americas increased in all end markets primarily due to pricing, partially offset by lower volume especially in Earthworks and Energy. Sales in EMEA increased as a result of pricing and the execution of our growth initiatives in Aerospace & Defense. Sales in Asia Pacific increased primarily due to pricing.

Previous 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.

Current wording

For the three months ended September 30, 2026, Infrastructure operating income was $261.7 million compared to $16.6 million in the prior year quarter. The increase in operating income was driven by the favorable timing of raw material-related pricing compared to costs of approximately $258 million, non-raw material-related pricing, and an incremental benefit of approximately $4 million from an advanced manufacturing production credit under the Inflation Reduction Act. These factors were partially offset by lower sales and production volumes, tariffs and general inflation, higher compensation costs, and a charge of approximately $3 million related to the write-off of certain fixed assets in the current quarter.

Previous 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.

Current wording

For the three months ended September 30, 2026, Corporate expense increased $0.2 million from the prior year quarter.

Previous wording

During the three months ended December 31, 2025, we entered into the Seventh Amended and Restated Credit Agreement dated as of November 17, 2025 ( the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility, which we use to augment cash from operations and as an additional source of funds. The Credit Agreement allows for borrowings in U.S. dollars, Canadian dollars, euros, pounds sterling and Japanese yen. Interest payable under the Credit Agreement is based upon the type of borrowing under the facility and may be (1) Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Canadian Overnight Repo Rate Average (CORRA), Tokyo Interbank Offered Rate (TIBOR) and Secured Overnight Financing Rate (SOFR) for any borrowings in euros, pounds sterling, Canadian dollars, yen and U.S. dollars, respectively, plus an applicable margin, (2) the greater of the prime rate or the Federal Funds effective rate plus an applicable margin, or (3) fixed as negotiated by us. The Credit Agreement matures in November 2030.

Current wording

During fiscal 2026, we entered into the Seventh Amended and Restated Credit Agreement dated as of November 17, 2025 (the Credit Agreement). The Credit Agreement is a five-year, multi-currency, revolving credit facility, which we use to augment cash from operations and as an additional source of funds. The Credit Agreement allows for borrowings in U.S. dollars, Canadian dollars, euros, pounds sterling and Japanese yen. Interest payable under the Credit Agreement is based upon the type of borrowing under the facility and may be (1) Euro Interbank Offered Rate (EURIBOR), Sterling Overnight Index Average (SONIA), Canadian Overnight Repo Rate Average (CORRA), Tokyo Interbank Offered Rate (TIBOR) and Secured Overnight Financing Rate (SOFR) for any borrowings in euros, pounds sterling, Canadian dollars, yen and U.S. dollars, respectively, plus an applicable margin, (2) the greater of the prime rate or the Federal Funds effective rate plus an applicable margin, or (3) fixed as negotiated by us. The Credit Agreement matures in November 2030.

Previous 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.

Current wording

As of September 30, 2026, we were in compliance with all the covenants of the Credit Agreement, and there were no borrowings outstanding and $850.0 million of additional availability. There were borrowings outstanding of $20.0 million as of June 30, 2026.

Previous 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.

Current wording

At September 30, 2026, cash and cash equivalents were $272.8 million. Total Kennametal shareholders' equity was $1,823.1 million and total debt was $1,134.0 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. Other than the financing activities mentioned above, there have been no material changes in our contractual obligations and commitments since June 30, 2026.

Previous wording

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

Current wording

Dividends During the three months ended September 30, 2026, the Company paid a total of $15.2 million in dividends to Kennametal Shareholders.

Previous 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.

Current wording

During the three months ended September 30, 2026, cash flow used in operating activities was $201.3 million, compared to cash flow provided by operating activities of $17.5 million for the prior year period. Cash flow used in operating activities for the current year period consisted of net income and non-cash items amounting to $339.3 million and changes in certain assets and liabilities netting to an outflow of $540.6 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $516.0 million, an increase in other current assets of $51.2 million, an increase in accounts receivable of $22.1 million, and a decrease in accounts payable and accrued liabilities of $13.1 million. Partially offsetting these cash outflows was an increase in accrued income taxes of $57.9 million.

Previous 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.

Current wording

During the three months ended September 30, 2025, cash flow provided by operating activities was $17.5 million and consisted of net income and non-cash items amounting to $70.3 million and changes in certain assets and liabilities netting to an outflow of $52.8 million. Contributing to the changes in certain assets and liabilities were an increase in inventories of $28.0 million, an increase in other, primarily prepaid assets, of $15.1 million and a decrease in accounts payable and accrued liabilities of $13.5 million. Partially offsetting these cash outflows was a decrease in accounts receivable of $7.0 million.

Previous 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.

Current wording

Cash flow used in investing activities was $13.3 million for the three months ended September 30, 2026, compared to $22.7 million for the prior year period. During the current year period, cash flow used in investing activities included capital expenditures of $10.8 million, which consisted primarily of equipment upgrades, and an investment in a strategic partnership of approximately $3 million included in other, partially offset by proceeds from disposals of $0.4 million.

Previous 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.

Current wording

Cash flow used in investing activities was $22.7 million for the three months ended September 30, 2025, and included capital expenditures of $23.0 million, which consisted primarily of equipment upgrades.

Previous 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.

Current wording

Cash flow provided by financing activities was $391.1 million for the three months ended September 30, 2026 compared to cash flow used in financing activities of $31.1 million in the prior year period. During the current year period, cash flow provided by financing activities primarily included proceeds of $500.0 million from the draw on the Term Loan and an increase in notes payable of $28.1 million, partially offset by the redemption of the remaining $90.6 million aggregate principal amount of 2028 Notes, the repayment of $20.0 million under the Credit Agreement, $15.2 million of cash dividends paid to Kennametal Shareholders and $11.1 million of the effect of employee benefit and stock plans and dividend reinvestment.

Previous 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.

Current wording

Cash flow used in financing activities was $31.1 million for the three months ended September 30, 2025 and primarily included $15.1 million of cash dividends paid to Kennametal Shareholders, $10.0 million in common shares repurchased and $6.3 million of the effect of employee benefit and stock plans and dividend reinvestment.

Previous wording

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

Current wording

Working capital was $1,788.5 million at September 30, 2026, an increase of $693.5 million from $1,095.1 million at June 30, 2026. The increase in working capital was primarily driven by an increase in inventories of $507.5 million resulting from rising tungsten prices, an increase in cash and cash equivalents of $177.0 million, an increase in other current assets of $41.7 million, which consisted primarily of prepaid assets and advance payments made to certain vendors to secure raw material supply, an increase in accounts receivable of $21.4 million, a decrease in accrued expenses of $16.4 million and a decrease in other current liabilities of $14.2 million, partially offset by an increase in accrued income taxes of $59.4 million, an increase in accounts payable of $17.3 million and an increase in revolving and other lines of credit and notes payable of $7.8 million. Currency exchange rate effects decreased working capital by a total of approximately $2.3 million, the effects of which are included in the aforementioned changes.

Previous wording

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

Current wording

Property, plant and equipment, net decreased $23.5 million from $843.6 million at June 30, 2026 to $820.1 million at September 30, 2026, primarily due to depreciation expense of $31.7 million and currency exchange effects of $1.0 million, partially offset by net capital additions of $10.4 million.

Previous wording

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

Current wording

At September 30, 2026, total other assets were $540.8 million, a decrease of $10.6 million from $551.4 million at June 30, 2026. The decrease was primarily due to a decrease in other assets of $4.2 million, which consisted primarily of pension assets and long-term prepaid assets, and amortization of intangibles of $2.2 million. Currency exchange rate effects decreased other assets by a total of approximately $2.5 million, the effects of which are included in the aforementioned changes.

Previous wording

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

Current wording

Kennametal Shareholders' equity was $1,823.1 million at September 30, 2026, an increase of $253.3 million from $1,569.8 million at June 30, 2026. The increase was primarily due to net income attributable to Kennametal of $271.6 million and capital stock issued under employee benefit and stock plans of $0.2 million, partially offset by cash dividends paid to Kennametal Shareholders of $15.2 million and other comprehensive loss attributable to Kennametal of $2.8 million.

Previous wording

Organic sales growth (decline)Organic sales growth (decline) is a non-GAAP financial measure of sales growth (decline) (which is the most directly comparable GAAP measure) excluding the effects of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth (decline) on a consistent basis. Also, we report organic sales growth (decline) at the consolidated and segment levels.

Current wording

Organic sales growth Organic sales growth is a non-GAAP financial measure of sales growth (which is the most directly comparable GAAP measure) excluding the effects of acquisitions, divestitures, business days and foreign currency exchange from year-over-year comparisons. We believe this measure provides investors with a supplemental understanding of underlying sales trends by providing sales growth on a consistent basis. Also, we report organic sales growth at the consolidated and segment levels.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

Reconciliations of constant currency regional sales growth to reported regional sales growth(4) are as follows: