Kennametal (KMT) investor relations material

Executive summary

• Sales reached $498 million, up 3% year-over-year on both reported and organic bases, marking the first organic growth in two years and exceeding the upper end of guidance, driven by project wins and improved market conditions.

• Adjusted EPS rose to $0.34 from $0.29 in the prior year, supported by restructuring savings and price realization.

• Adjusted EBITDA margin improved to 15.3%, up 100 bps year-over-year.

• $25 million was returned to shareholders through $10 million in share repurchases and $15 million in dividends.

• Annual sales and adjusted EPS outlooks were raised following strong Q1 performance and pricing actions.

Financial highlights

• Sales increased 3% organically and on a reported basis year-over-year to $498 million; both Metal Cutting and Infrastructure segments grew 3% organically.

• Adjusted operating income rose 11% to $41 million; adjusted operating margin improved to 8.2% from 7.6% year-over-year.

• Gross profit margin was 31.0–31.4%, with gross profit at $154.6 million.

• Cash from operating activities was $17 million, down from $46 million; free operating cash flow was negative $5 million, mainly due to higher inventory.

• Net debt stood at $495 million at quarter end; cash and cash equivalents were $103.5 million.

Outlook and guidance

• Full-year sales guidance raised to $2.10–$2.17 billion, with adjusted EPS outlook increased to $1.35–$1.65.

• Q2 sales expected at $500–$520 million, with adjusted EPS forecasted at $0.30–$0.40.

• Free operating cash flow projected at ~100% of adjusted net income; capital spending to be ~$90 million.

• Net price and tariff surcharge expected to contribute ~7%, with a 2% tailwind from foreign exchange.

• Management continues to monitor macroeconomic conditions, including inflation, tariffs, and global trade uncertainties, and expects to mitigate negative impacts through pricing and sourcing strategies.