A maker of tungsten carbide-based cutting tools, tooling, wear components, and metallurgical powders, sold under brands like Kennametal and WIDIA to metal-cutting, aerospace, energy, and earthworks customers worldwide. Metallurgist Philip M. McKenna founded it in 1938 in Latrobe, Pennsylvania, as the McKenna Metals Company to sell his breakthrough tungsten-titanium carbide alloy. The business later renamed itself after that flagship product, "Kennametal."
10-K · Fiscal year ended Jun 30, 2026 · SEC filing ↗
Operating income more than tripled to $472.5M, but the gain was driven by a $316M raw-material pricing timing benefit that is unlikely to repeat.
more than tripled, but nearly all of the gain came from a one-time pricing-to-cost swing. rose 20% to $2.36 billion and expanded 10.7 points to 41.2%, driven by approximately $316 million in favorable timing of raw material pricing versus costs. The underlying business improved, but turned deeply negative as a $593 million build absorbed the profit.
Key takeaways
Consolidated rose 230% to $472.5 million, and expanded 12.8 points to 20.1%, driven by approximately $316 million in favorable timing of raw material-related pricing versus costs.
Infrastructure rose to $219.3 million, with its margin reaching 29.2%, as approximately $262 million in favorable raw material pricing timing and a 30% organic sales increase flowed through.
Metal Cutting rose 75% to $151.5 million, with its margin improving to 14.0%, helped by pricing, tariff surcharges, and $35 million in restructuring savings.
Section summaries
Business
Kennametal operates in Metal Cutting and Infrastructure segments, providing tungsten carbide-based tooling, wear components, and powders to diverse industrial end markets globally.
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The Metal Cutting offers high-performance tooling and metal cutting solutions under brands like Kennametal and WIDIA, serving General Engineering, Transportation, Aerospace & Defense, and Energy markets.
The Infrastructure produces engineered wear components, earth cutting tools, and advanced metallurgical powders, primarily for Earthworks, Energy, and Aerospace & Defense end markets.
rose 20% to $2,356.7 million on 19% , with Earthworks end-market sales up 49% and Aerospace & Defense up 29% in the third quarter alone.
Net cash used by operations was $4.0 million, and fell to negative $80.9 million, as a $593.4 million build driven by rising tungsten prices and higher more than offset of $342.4 million.
The company refinanced its debt by issuing $300 million of 5.800% Senior Notes due 2036 and entering a new $500 million delayed-draw term loan, while pausing share repurchases to preserve liquidity.
What changed
The Infrastructure 's pricing-cost gap, a drag flagged for two consecutive years, reversed dramatically: reached 29.2% in fiscal 2026, up from 7.8% in fiscal 2025, as approximately $262 million in favorable raw material pricing timing erased the prior .
Metal Cutting's organic sales decline, which reached 5% in fiscal 2025, reversed to 12% in fiscal 2026, and its recovered to 14.0% from 7.1%.
The $35 million restructuring program, expanded from an initial $15 million target, delivered savings that contributed to Metal Cutting's margin recovery, with total charges of $30 million.
, which was $119.4 million in fiscal 2025, fell to negative $80.9 million as a $593.4 million build absorbed cash — a reversal of the discipline that had been a positive signal in prior years.
Share repurchases, which totaled $60 million in fiscal 2025, were paused in fiscal 2026 as the company prioritized liquidity amid the -driven cash drain.
What to watch
Whether the $593.4 million build reverses in fiscal 2027, and if can return to positive territory as tungsten prices stabilize or decline.
Whether Infrastructure's can be sustained once the favorable raw material pricing timing normalizes, and what the 's underlying run-rate profitability actually is.
Whether Metal Cutting's 12% and 14.0% can be sustained as restructuring savings are fully lapped and tariff exposure persists.
The impact of the estimated $80 million in potential annual tariff exposure on raw material costs, and whether pricing actions and supply chain rerouting can continue to offset it.
International sales represented 57% of consolidated sales in fiscal 2026, with principal operations in Western Europe, China, and India, exposing the company to currency, tariff, and geopolitical risks.
The company faces raw material supply risks, particularly for tungsten, due to concentrated mining and processing capacity in China and recent export controls that have increased price volatility.
Competitive differentiation is based on application expertise, product innovation, brand recognition, and delivering value-added productivity rather than competing solely on price.
As of June 30, 2026, the company employed approximately 8,050 full-time employees globally and maintained environmental remediation of $12.3 million.
The company operates 37 principal manufacturing and distribution facilities across 13 countries, supporting its Metal Cutting and Infrastructure segments.
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The company's principal properties include 37 facilities in 13 countries, with 23 in the United States and 14 internationally.
The Metal Cutting (MC) is supported by 20 facilities, primarily producing carbide inserts, round tools, and toolholders.
The Infrastructure (INF) is supported by 3 facilities in China, India, and the U.S., producing powders, wear parts, and mining/construction tools.
The technology center in Latrobe, Pennsylvania, leads research and development, with additional R&D conducted in Arkansas, Germany, and India.
The company states its production capacity is adequate for present needs and that its properties are well-maintained and suitable for its operations.
The information set forth in Part I, Item 1, of this Annual Report under the caption “Regulation” is incorporated by reference into this Item 3. From time to time, we are party to legal claims and proceedings that arise in the ordinary course of business, which may relate to our…
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The information set forth in Part I, Item 1, of this Annual Report under the caption “Regulation” is incorporated by reference into this Item 3. From time to time, we are party to legal claims and proceedings that arise in the ordinary course of business, which may relate to our operations or assets, including real, tangible or intellectual property assets. Although we currently believe that the amount of ultimate liability, if any, we may face with respect to these actions will not materially affect our financial position, results of operations or liquidity, the ultimate outcome of any litigation is uncertain. Were an unfavorable outcome to occur or if protracted litigation were to ensue, the effect on us could be material. See Note 20 of our consolidated financial statements set forth in Item 8 of this Annual Report for further information.
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Table of Contents
Sales rose 20% to $2.36B and operating margin expanded to 20.1%, driven by favorable raw material pricing timing of ~$316M.
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Consolidated sales grew 20% to $2,356.7 million, with of 19% led by Infrastructure (30% organic) and Metal Cutting (12% organic).
surged to $472.5 million (20.1% margin) from $143.1 million (7.3% margin), primarily due to ~$316 million in favorable timing of raw material-related pricing versus costs.
Infrastructure jumped to 29.2% on ~$262 million in favorable raw material timing, while Metal Cutting margin improved to 14.0% on non-raw-material pricing and tariff surcharges.
Net cash used by operations was $4.0 million, as a $593.4 million build from rising tungsten prices and higher more than offset .
The company refinanced debt by issuing $300 million of 5.800% Senior Notes due 2036 and entering a new $500 million delayed-draw term loan, while pausing share repurchases.
Quantitative and Qualitative Disclosures About Market Risk
The company uses derivatives to manage foreign-exchange risk and carries mostly fixed-rate debt, making interest-rate exposure immaterial.
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A hypothetical 10% shift in USD exchange rates would change pre-tax income by $2.5 million and by $1.3 million as of June 30, 2026.
Currency fluctuations increased by $0.02 in 2026 and decreased it by $0.02 in 2025, and the company warns future effects could be material.
Only 4% of outstanding debt was exposed to variable interest rates as of June 30, 2026, and a 10% change in market rates would have an immaterial impact.
The company uses designated as for cross-border intercompany sales, while certain other currency forwards do not qualify for hedge accounting.
Counterparty credit risk is managed through credit standards, counterparty diversification, and concentration monitoring, with no expectation of nonperformance.
Management and PwC confirm effective internal controls and unqualified opinions on FY2026 financials, with income taxes cited as a critical audit matter.
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Management assessed internal controls using the COSO 2013 framework and concluded they were effective as of June 30, 2026.
PwC issued unqualified opinions on both the consolidated financial statements and the effectiveness of internal control over financial reporting.
The identified was the provision for income taxes, which totaled $110.9 million for FY2026 and required complex judgments on and valuation allowances.
attributable to Kennametal rose to $342.4 million in FY2026, up from $93.1 million in FY2025, driven by a significant increase in sales and .
Total assets increased to $3.17 billion, with inventories more than doubling to $1.11 billion, primarily due to higher work in process and raw materials.
The company completed a debt refinancing in May 2026, issuing $300 million in 5.800% Senior Unsecured Notes due 2036 and repurchasing $209.4 million of its 2028 Notes.