Kennametal Inc.

Good morning. I would like to welcome everyone to Kenna Metal fourth 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 that this event is being recorded. I would now like to turn the conference over to Michael Pisi Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Welcome, everyone, and thank you for joining us to review Canon Metal's fourth quarter and 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'd 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 Metals SEC filings. In addition, we will be discussing non-GAAP financial measures on the call today. Reconciliations to GAAP 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 begin the call today with a brief overview of the full year. and then some end market commentary. From there, Pat will cover the quarterly financial results as well as the fiscal 26 outlook. Finally, I'll make some comments reflecting on my first year as CEO and provide an update as to our plans moving forward. Then we'll open the line for questions. Turning to slide three, let me begin by highlighting some of the accomplishments the team delivered despite market headwinds. During the fourth quarter, our infrastructure team secured a $25 million multi-year award with a U.S. defense customer. In metal cutting, we secured wins in aerospace and defense, as well as project wins in power generation, supporting AI data centers within the energy end market. These key wins position us well moving forward in markets that are benefiting from long-term secular growth trends. We successfully executed tariff mitigation actions to address the impact of trade policies on our business. Where appropriate, we rerouted internal supply chain as well as leveraged our global footprint to optimize product flow. We also implemented surcharges And while we experienced an impact in the quarter, as anticipated, we remain committed to fully offsetting the impact moving forward. On the cost front, in January we announced plans to lower structural costs by reducing employment costs and consolidating manufacturing operations. During the fourth quarter, we seized operations in Greenfield, Massachusetts, and we consolidated facilities in Spain, to advance our footprint rationalization efforts. We also recognized $6 million in restructuring savings this quarter, and we have achieved run-rate savings of approximately $65 million, inception to date for all cost-out actions at the end of fiscal 25, and expect approximately $90 million by the end of fiscal 26. We made modest progress on portfolio optimization by completing the sale of our Goshen facility in early June. I want to thank the team for their support. And while we have made headway on our structural costs and portfolio actions, we have much more to do. I will provide some additional comments on this later in the call. The results reflect the continued broad market weakness that has impacted our end markets for the past eight quarters. Weak global production volume, declining U.S. land-based rig counts, and slowing light vehicle production, especially in EMEA, continue to pressure our performance. Adding to these pressures are supply chain disruptions in certain end markets and continued uncertainty around tariffs and the potential effect tariffs have on global production. Now turning to the full year. In addition to market softness in several end markets, foreign exchange headwinds pressured our top line as sales declined 4% organically. On a segment basis, metal cutting declined 5%, infrastructure declined 2%. Most of our end markets experienced mid-single digit declines on a constant currency basis, though aerospace and defense was a bright spot with mid-single digit growth. Energy was flat. All regions on a constant currency basis experienced low single-digit declines. Adjusted EPS was $1.34 as several one-time items and restructuring savings offset the lower sales and production volumes. Cash flow from operating activities for the year was $208 million. Finally, we returned $122 million to shareholders through share repurchases of $60 million and dividends of $62 million. In summary, our performance reflected market softness and our continued efforts to get the best results possible in that environment. We know we have a lot more to do here, which I'll speak to more in a moment. Please slide 16 in the appendix for additional details on our full year results. Now I want to provide some colored around the end market conditions, reflected in our fiscal 26 outlook at the midpoint of our range. In aerospace and defense, overall, we expect low double-digit growth, reflecting higher OEM bill rates as production and supply chain conditions improve. Defense continues to experience growth from increased spending and project wins. Transportation is expected to decline mid-single-digit based on IHS global production forecasts. which have been especially volatile as customers are working through product mix evolution and supply chain reconfiguration due to trade policies. General engineering is expected to be down low single digit as global production metrics continue to remain stagnant. We anticipate the energy end market to be flat. Finally, earthworks is projected to be down mid single digit. See page 17 in the appendix for additional detail on our end markets. Now let me turn the call over to Pat, who will review the fourth quarter financial performance and the fiscal 26 outlook.