On this page of StockholderLetter.com we present the latest annual shareholder letter from KENNAMETAL INC — ticker symbol KMT. Reading current and past KMT letters to shareholders can bring important insights into the investment thesis.

 •  9/15/2025 Letter Continued (Full PDF)
 •  9/12/2023 KMT Stockholder Letter
 •  9/17/2024 KMT Stockholder Letter
 •  More "Industrial Machinery & Equipment" Category Stockholder Letters
 •  KMT Benford's Law Stock Score = 95

KMT Shareholder/Stockholder Letter Transcript:

F Y 2 5 A N N U A L R E P O RT

Corporate Leadership
Sanjay Chowbey
President and
Chief Executive Officer
FY25 Sales Summary
Company sales by region
(2025)
Judith L. Bacchus
Vice President and
Chief Administrative Officer
n Americas
49%
n EMEA
31%
n Asia Pacific
20%
Dave Bersaglini
Vice President, Kennametal Inc. and
President, Metal Cutting Segment
Infrastructure sales by end market
Faisal Hamadi
Vice President, Kennametal Inc. and
President, Infrastructure Segment
(2025)
Michelle R. Keating
Vice President, Secretary and
General Counsel
Dr. Carlonda R. Reilly
Vice President and
Chief Technology Officer
Patrick S. Watson
Vice President and
Chief Financial Officer
n Earthworks
35%
n General Engineering
33%
n Energy
23%
n Aerospace & Defense
9%
Metal Cutting sales by end market
(2025)
n General Engineering
53%
n Transportation
27%
n Aerospace & Defense
13%
n Energy
7%
John Witt
Vice President and
Corporate Controller
Forward-Looking Statements Certain statements in this report relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements may also include
words such as    anticipates,       believes,       estimates,       expects,       hopes,       targets,       should,       will,       will likely result,       forecast,       outlook,       projects    or similar expressions. Forward-looking statements
involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Kennametal to be different from those expressed in or implied by the
forward-looking statements. For further discussion of forward-looking statements, including some of the specific factors that may cause such a difference, see the forward-looking statements and risk
factors disclosure included in our 2025 annual report on Form 10-K. Kennametal disclaims any intention or obligation to update or revise any forward-looking statements.
Non-GAAP Financial Information. This document also includes certain non-GAAP (Generally Accepted Accounting Principles) financial measures as defined by SEC rules. As required by Regulation G,
we have provided a reconciliation of those measures to the most directly comparable GAAP measures, which is available in the section titled    2025 supplemental financial data.   

DEAR FELLOW SHAREHOLDERS
To Our Shareholders,
Fiscal Year 2025 (FY25) was marked by various macroeconomic challenges, including tariff uncertainty, foreign exchange
pressures and supply chain disruptions in certain end markets. Despite these market headwinds, the team took action   
securing key wins in aerospace & defense as well as a new application in energy, power generation for AI data centers. We
reduced structural costs, drove productivity initiatives and executed our footprint consolidation and portfolio optimization
strategies, including the divestiture of our Goshen, IN subsidiary, closure of our Greenfield, MA plant and consolidation of
our Barcelona, Spain locations.
Over the past eight quarters, we also experienced broad-based softness across our end markets and FY25 unfolded
against this challenging backdrop. Even in this environment, we delivered the following:
EPS
$1.20 reported
$1.34 adjusted
Adjusted EBITDA
$299 million
or 15.2%
Sales
Adjusted operating
income
Annualized run-rate
pre-tax savings
(-4)% year over year
or 8%
Cash from operating
activities:
FOCF:
with a clear path
to exceed $100 million
Investor Day target by
FY27     now expecting
$125 million by June 2027
$1.967 billion
Organic sales
$208 million
$158 million
$121 million
$65 million
Cash returned to
shareholders:
$122 million
Dividends:
$62 million
Share repurchases:
$60 million
Beyond that, we strengthened our Lean capabilities through over 35 Kaizen events around the world and advanced our
digital strategy through a partnership with ToolPath, complementing our existing work with Autodesk and ModuleWorks.
We also added to our executive leadership bench with the addition of Dave Bersaglini to run Metal Cutting and the
promotion of Faisal Hamadi to lead Infrastructure.
There is no doubt that we faced significant headwinds in the year, but I am proud of how the team responded and
continues to respond to those challenges. We have more work to do to continue to improve and unlock value for our
stakeholders, and we are very focused on doing that in Fiscal Year 2026 (FY26).
Looking Ahead to FY26
One of our top priorities remains capacity optimization   reducing our global footprint across both businesses,
consolidating operations and increasing efficiency and utilization across all our locations. These actions are complex and
will be thoughtfully executed to minimize disruption to customers and ensure long-term efficiency and competitiveness.
We believe this effort is essential to easing structural margin pressures and maintaining flexibility for future growth.
Throughout FY26 our team will remain relentlessly focused on driving above market growth. Recent wins in key end
markets show that we   re making progress, and we will continue advancing initiatives aimed at organic
growth and continuous improvement, while also evaluating opportunities to enhance our portfolio.
Despite the FY25 challenges, the team remained resilient and made progress on key initiatives.
As we move through FY26 and beyond, we are committed to building a more efficient, agile and
growth-focused organization   one positioned to deliver long-term value to our shareholders.
Thank you for your continued support.
Sincerely,
Sanjay Chowbey
President and Chief Executive Officer

I N N O VAT I O N I N A C T I O N
For over 85 years, Kennametal has helped customers turn bold ideas into reality by delivering innovative solutions
across industries like aerospace, transportation, energy and more. Trusted to solve tough challenges, we go
beyond products to provide the expertise and technology that give our customers a competitive edge.
FY25 Innovation
by the Numbers
PlusPoint    Picks utilize an
extra tough grade designed to
penetrate the hardest of rocks
when continuous miner operators
encounter adverse geological
conditions, minimizing the
operator   s downtime.
20+
new innovative
products commercially
launched
HARVI    II TE Solid Carbide
End Mills are the newest high-
75+
patents granted
performance addition to Kennametal   s
HARVI family, offering unmatched
versatility and aggressive metal
cutting capabilities. Designed for
maximum productivity and tool
life, they   re ideal for demanding
applications in the aerospace, general
engineering and medical industries.
GOmill    PRO solid carbide end
1,800+
patents active
worldwide
mills are the ideal choice for small to
mid-sized shops needing versatile,
cost-effective performance in steels,
stainless steels and cast iron. With
4-flutes and advanced geometry,
they deliver up to 15% better
performance, making them a
reliable solution across the general
engineering, transportation, energy
and medical industries.

C R E AT I N G VA L U E F O R O U R C U S T O M E R S
We are all about creating value for customers. By understanding their needs and delivering
innovative, high-impact solutions, we build trust, loyalty and long-term partnerships that
make our products and services truly indispensable.
HIGH GEAR INNOVATION:
Kennametal and Kraus Motor Company Ride Together
When cutting-edge design meets cutting-edge tooling, innovation takes the
spotlight   just like the powerful partnership between Kennametal and Kraus
Motor Company. Known for crafting high-performance motorcycle components
where flawless finishes are everything, Kraus Motor Company turned to
Kennametal to overcome tough machining challenges in aluminum and stainless
steel. The result? Precision, performance and a finish that turns heads.
   The quality of the tooling has been great. The support and being able to speak with people who
know what you   re talking about   and are machinists and have done machining   makes a big
difference when you have a technical question. There   s somebody there who understands what
you   re talking about and has some experience with it. I   ve found we get that with Kennametal.   
    Satya Kraus, Owner of Kraus Motor Company
POWERING PERFORMANCE:
Kennametal Materials Drive Alloy Carbide   s Success
For decades, Alloy Carbide has counted on Kennametal   s premium materials
and unmatched expertise to power precision and performance   delivering
critical components on time to the demanding oil and gas industry.
   In this industry, when you make a product out of carbide, you can be 90% into the process and
if it doesn   t clean up at the end, you have to start all over again. You can count on Kennametal   s
product. It   s very consistent.        Robert Perez, President, Alloy Carbide Company
Powering the Future of Digital Infrastructure
As the data center market accelerates with the rise of Artificial Intelligence (AI), Kennametal
is partnering with companies to deliver innovative, high-performance tooling solutions that
support the expansion of critical AI power generation. Leveraging advanced indexable
inserts and precision machining technologies, our team is helping customers scale their
operations   demonstrating how our technical expertise and reliable delivery are powering
the next generation of AI digital infrastructure.
Momentum Builds in Aerospace & Defense
Our momentum in Aerospace and Defense is the result of a targeted global initiative
grounded in materials science expertise, engineering precision and innovation.
Recent multimillion-dollar, multi-year contract wins in North America and EMEA
demonstrate the strength of this approach and our ability to deliver mission-critical
solutions to customers.

9/15/2025 Letter Continued (Full PDF)

 

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