Kennametal Inc.

Good morning. I would like to welcome everyone to Kenna Mental's first quarter and fiscal 2025 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, Simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. Please note this event is being recorded. I would now like to turn the conference over to Michael Pisi, Vice President of Investor Relations.

Thank you, Operator. Welcome, everyone, and thank you for joining us to review Canada Metals' first quarter fiscal 2025 results. This morning, we issued our earnings press release and posted our presentation slides on our website. We will be referring to that slide deck throughout today's call. I'm Michael Pisi, Vice President of Investor Relations. Joining me on the call today are Sanjay Chaubey, President and Chief Executive Officer, and Pat Watson, Vice President and Chief Financial Officer. After Sanjay and Pat's prepared remarks, we will open the line for questions. At this time, I would like to direct your attention to our forward-looking disclosure statement. Today's discussion contains comments that constitute forward-looking statements and, as such, involve a number of assumptions, risks, and uncertainties that could cause the company's actual results, performance, or achievements to differ materially from those expressed in or implied by such statements. These risk factors and uncertainties are detailed in Kenna Metal's SEC filings. In addition, we will be discussing non-GAAP financial measures on the call today. reconciliations to gap financial measures that we believe are most directly comparable can be found at the back of the slide deck and on our form 8K on our website. And with that, I'll turn the call over to Sanjay.

Thank you, Mike. Good morning, and thank you for joining us. I'll start the call today with some end market commentary, followed by a review of the quarter and examples of the industry-leading innovative solutions we are bringing to market. Then Pat will cover the quarterly financial results as well as the fiscal 25 outlook. Finally, I'll make some summary comments and then open the call for questions. Let me start on slide three by saying that from an industry and microeconomic perspective, fiscal 25 has started out pretty uneven, similar to what we saw at the end of fiscal 24. During our fiscal first quarter, market conditions worse and further in EMEA, and that is impacting several of our end markets. In addition, industrial production in the U.S. has continued to be soft. We also saw two major labor disputes, one in the shipping industry, which was resolved quickly, and the second one impacting aircraft production, which was resolved recently. Despite these broader industry and market challenges, we remain focused on things that we can control. We continue to make progress on initiatives to drive above-market growth, including innovative product launches and demonstrating our products and solutions at several key industry events. I will elaborate more on these in a moment. In addition, we remain focused on primary working capital, as shown by the strong free cash flow that will deliver this quarter. Now let's turn to the results. For the quarter, sales decreased 2% year over year. At the segment level, infrastructure increased 1% organically, while metal cutting was down 4%. On a constant currency basis, Asia-Pacific sales increased 2%. However, EMEA declined 1%, and the Americas declined 2%. Moving to our end markets, aerospace and defense grew 13%, energy grew 2 percent. Our other markets experienced declines. Transportation was down 2 percent, general engineering declined 3 percent, and earthworks declined 6 percent. I want to reflect for a moment on our results versus the expectations we outlined last quarter. Our results were at the lower end of our expectations. This was mostly due to challenging market conditions in general engineering and transportation in the EMEA and Americas regions within metal cutting. Now turning to profitability for the quarter. Adjusted EBITDA margin was 14.3% compared to 16.6% in the prior year. Adjusted EPS decreased to 29 cents compared to 41 cents in the prior year quarter. Cash from operating activities year-to-date was $46 million compared to $26 million in the prior year period. Free operating cash flow year-to-date was $21 million, up significantly from negative $3 million in the prior year. And we continued our share repurchase program with $15 million worth of shares bought back during the quarter. Reflected in our EPS and as noted last call, was a portion of the investment in third-party expertise to execute some of the initiatives related to our $100 million cost improvement plan. The EPS results also include our participation in trade shows that take place every other year, including IMTS in the U.S. and AMB in Germany. We are encouraged by the level of interest during those shows. Our booths were very active. and we have a strong lead generation from both events. Finally, we remain focused on generating strong cash flow and implementing operational initiatives to improve our overall performance. Now, turning to slide four, I want to provide an update on the growth benchmarking that we introduced last year at Investor Day. As you may recall, we provided a comparison of our metal-cutting growth relative to publicly traded peers and data provided by industry trade groups in certain countries. First on the left, once again, this quarter, metal cutting performance, while negative on a constant currency basis, matched the publicly traded peer set. Over the last couple of years, as you can see here, we have been demonstrating our ability to compete and win. On the right, you can see that we have performed relatively well in these key countries. In the U.S., we delivered 3 percent growth, very modestly below the overall market. This is mostly driven by the timing of special projects in aerospace and defense and transportation. In the countries listed, we continue to outpace or match market growth. For example, in Germany, while the broader market there declined significantly, we achieved flat growth. Our performance was due in large part to our growth initiatives. Also of note, the broader peer group may have been impacted by lower export sales. Finally, let me say that our innovative solutions, best-in-class customer service, application engineering support, and commercial excellence continue to position us for above-market growth. Now, speaking of our innovative solutions, on slides five and six, I would like to highlight examples of how innovation as a competitive advantage continues to deliver enhanced product offerings to our customers. First on slide five is our new PrimePoint long wall mining pick from our infrastructure portfolio. Notably, this pick is equipped with a polycrystalline diamond tip which enables operators to run longer. This innovative mining solution also provides reliability in the harshest and most abrasive conditions and is ideal for coal, salt, and other soft mineral applications. This is one of three mining products launched this quarter. It is a great example of unique solutions that support customers who are operating in challenging environments. On slide six, we have our top Swiss micromachining solution from our metal cutting portfolio. These high-precision turning tools focus on serving the micromachining needs of customers in the medical, aerospace, and transportation markets. And this product suite has ultra-sharp cutting edges for longer tool life and superior surface finishes for use in titanium and stainless steel applications. This launch is a great example of the progress we have made executing the strategy we discussed during Investor Day last year. We identified these applications, specifically medical and aerospace, to help us fuel above-market growth. Now let me turn the call over to Pat, who will review the first quarter financial performance and the outlook.