Kennametal Inc. today reported second quarter fiscal 2007 EPS of $0.77, including a charge of $0.08 per share related to discontinued operations. This represents a decrease of 3 percent from the prior year. Second quarter adjusted EPS were $0.85 compared with prior year EPS of $0.79, an increase of 8 percent.

For the first six months of fiscal 2007, reported EPS increased 1 percent to $1.54, including charges from special items of $0.13 per share. Adjusted EPS for the first half of fiscal 2007 were $1.67 compared with prior year EPS of $1.52, representing an increase of 10 percent.

Kennametal's President and Chief Executive Officer Carlos Cardoso said, "I'm pleased to report that we delivered on our commitment for sales growth and exceeded our expectations for EPS and return on invested capital (ROIC). This performance represents a record December quarter for sales, and for adjusted EPS and ROIC. With these collective results, we extended our track record of consecutive quarterly growth. Our solid financial performance demonstrates that we have strong operating leverage and effective cost-control measures which should continue to enhance our earnings performance going forward."

Cardoso added, "We attribute our results to our focused strategy, which we implement by applying the disciplined processes of our management operating system, the Kennametal Value Business System. We continue to make progress on the transformation of Kennametal by driving steady performance in our core Metalworking and Advanced Materials businesses, and growing each segment to achieve a balanced portfolio. At the same time, we continue to successfully diversify our company's global footprint and customer base. We are well positioned to achieve our long-term goals."

"Our strong cash flow generation also plays an important role in our transformation," Cardoso said, "as it allows us to invest in multiple ways in our company's future. We have the financial flexibility to make strategic acquisitions in our core businesses and to take advantage of opportunities to increase our ownership of affiliates in key markets which presently have minority interests."

Reconciliation of all non-GAAP financial measures are set forth in the attached tables.

  Highlights of Fiscal 2007 Second Quarter

   -- Sales for the quarter were $569 million compared with $563 million in
      the same quarter last year.  Sales grew 6 percent on an organic basis
      offset by the net impact of acquisitions and divestitures, primarily
      the divestiture of J&L Industrial Supply (J&L).  J&L sales were $65
      million in the December quarter last year.

   -- Income from continuing operations was $34 million compared with $31
      million in the prior year quarter, an increase of 9 percent despite
      the J&L divestiture.  J&L contributed $6 million in operating income
      in the December quarter last year.  The current year quarter results
      also included plant closure costs of $2.6 million ($0.07 per share),
      which did not provide a tax benefit.  Additionally, the December
      quarter results benefited from lower securitization fees.

   -- The December quarter reflects a $0.04 per share tax benefit related to
      the extension of the research, development and experimental tax
      credit.  The company also continues to realize benefits from its
      pan-European business strategy.

   -- During the current quarter, the company completed the divestiture of
      Advanced Materials Solutions Group's Kemmer Praezision electronics
      business (Electronics).  Discontinued operations includes an
      impairment charge of $3.0 million related to a building that was owned
      by Electronics and not included in the transaction.  This completes
      the divestiture of Electronics.

   -- Reported EPS were $0.77, including a charge of $0.08 per share related
      to discontinued operations, compared with prior year quarter reported
      EPS of $0.79.  Adjusted EPS were $0.85.  A reconciliation follows:



                  Earnings Per Diluted Share Reconciliation

  Second Quarter FY 2007                 Second Quarter FY 2006
  Reported EPS                  $ 0.77   Reported EPS            $ 0.79
  Electronics impairment and
    divestiture-related charges   0.08   No special items
  Adjusted EPS                  $ 0.85                           $ 0.79


   -- Adjusted return on invested capital (ROIC) was up 110 basis points to
      11.1 percent from 10.0 percent in the prior year.

  Highlights of Fiscal 2007 First Half

   -- Sales of $1.1 billion were level with the same period last year.
      Sales grew 6 percent on an organic basis offset by the net impact of
      acquisitions and divestitures, primarily the divestiture of J&L, which
      had sales of $130 million in the prior year period.

   -- Income from continuing operations was $63 million, compared with $59
      million in the prior year period, an increase of 7 percent despite the
      J&L divestiture and costs of $2.6 million ($0.07 per share) associated
      with a plant closure.  J&L contributed $13 million in operating income
      in the prior year period.  Income from continuing operations,
      excluding special items, was $64 million, an increase of 9 percent
      over the prior year period.

   -- The first half of fiscal 2007 also reflects a lower effective tax rate
      compared with the prior year, primarily due to the $0.04 per share tax
      benefit related to the extension of the research, development and
      experimental tax credit.  The company also continues to realize
      benefits from its pan-European business strategy.

   -- Reported EPS were $1.54, including charges from special items of $0.13
      per share, compared with prior year reported EPS of $1.52.  Adjusted
      EPS were $1.67.  A reconciliation follows:



                  Earnings Per Diluted Share Reconciliation

  First Half FY 2007                      First Half FY 2006
  Reported EPS                   $ 1.54   Reported EPS            $ 1.52
  Loss on divestiture of CPG and          No special items
   transaction-related charges     0.01
  Adjustment on J&L divestiture
   and transaction-related charges 0.03
  Electronics impairment and
   divestiture-related charges     0.09
  Adjusted EPS                   $ 1.67                           $ 1.52


   -- Cash flow from operating activities was $36 million for the first half
      of fiscal 2007, compared with $76 million in the prior year period.
      Included in fiscal 2007 first half cash flow from operations were
      income tax payments of $86 million, primarily due to tax payments
      related to the gain on the sale of J&L and cash repatriated in 2006
      under the American Jobs Creation Act.  Adjusted free operating cash
      flow, excluding the effects of these income tax payments, was $78
      million versus $45 million in the prior year period.

  Business Segment Highlights of Fiscal 2007 Second Quarter

Metalworking Solutions & Services Group (MSSG) continued to deliver top- line growth this quarter led by year-over-year expansion in the distribution, aerospace and general engineering markets. The North American market continued to moderate, while conditions in the European market continued to improve, and Asia Pacific and India delivered solid growth.

In the December quarter, MSSG sales were up 5 percent on an adjusted basis. European sales increased 11 percent, while North American sales increased 1 percent. Asia Pacific and India sales grew 6 percent and 7 percent, respectively.

MSSG operating income was up 6 percent and the operating margin of 12 percent was lower than the same period last year, primarily due to costs associated with a plant closure in the current quarter and higher realized raw material costs, partially offset by ongoing cost containment.

Advanced Materials Solutions Group (AMSG) continued to deliver top-line growth in the December quarter, driven by favorable market conditions and the effect of acquisitions. Strong growth in the energy and mining markets continued to contribute to AMSG's results.

AMSG sales grew 10 percent on an adjusted basis. Energy product sales, including Conforma Clad sales, were up 35 percent, mining and construction product sales were higher by 8 percent and engineered product sales increased 2 percent.

AMSG operating income grew 15 percent over last year, while operating margin of 17 percent was lower than prior year due primarily to higher realized raw material costs in the current quarter, partially offset by the effects of acquisitions and new product introductions.

Outlook

Worldwide market conditions support Kennametal's expectations of continued top-line growth during the balance of fiscal year 2007. Based on global economic indicators, the company believes that the moderation in the North American market will persist in the near term. The company also believes that the European market will continue on a positive trend, and that business conditions will continue to be strong in developing economies. While there remain some uncertainties and risks related to the macro-economic environment, fundamental drivers for global demand appear to be stable.

Kennametal expects organic revenue growth in the 6 to 7 percent range for fiscal 2007, which would extend its track record of consistently outpacing worldwide industrial production rates by two to three times. The company anticipates many of its end markets will continue to operate at favorable levels throughout the fiscal year, with moderating growth rates for some regions and market sectors.

For the third quarter of fiscal 2007, ongoing expansion around the globe supports the company's projection of 6 to 8 percent organic sales growth, on top of strong performance in the prior year quarter.

The company's guidance for adjusted EPS for the full fiscal year is in the range of $4.40 to $4.50. On a comparable basis, the fiscal 2007 guidance midpoint represents a 31 percent growth rate, a substantial increase over prior year adjusted EPS from continuing operations of $3.41.

The company expects third quarter 2007 EPS to be $1.25 to $1.30. Third quarter 2007 guidance includes approximately $0.03 per share of costs related to the completion of the plant closure initiated in the December quarter, which is expected to have a payback within this fiscal year.

Kennametal expects to achieve its goal of 12 percent EBIT margin, and ROIC is on track for the projected 11 to 12 percent range for fiscal year 2007.

Kennametal anticipates reported cash flow from operations of approximately $190 million to $200 million for fiscal 2007. Included in this amount are income tax payments of $86 million, as mentioned above. Adjusted cash flow from operations is expected to be approximately $275 million to $285 million.

Based on anticipated capital expenditures of $90 million, the company expects to generate between $185 million to $195 million of adjusted free operating cash flow for fiscal 2007.

Dividend Declared

Kennametal announced today that its Board of Directors declared a regular quarterly cash dividend of $0.21 per share. The dividend is payable February 21, 2007, to shareowners of record as of the close of business on February 6, 2007.

Kennametal advises shareowners to note monthly order trends, for which the company makes a disclosure ten business days after the conclusion of each month. This information is available on the Investor Relations section of Kennametal's corporate web site at www.kennametal.com.

Second quarter results for fiscal 2007 will be discussed in a live Internet broadcast at 10:00 a.m. Eastern time today. This event will be broadcast live on the company's website, www.kennametal.com. Once on the homepage, click "Corporate," and then "Investor Relations." The replay of this event will also be available on the company's website through February 7, 2007.

This release contains "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are statements that do not relate strictly to historical or current facts. You can identify forward- looking statements by the fact they use words such as "should," "anticipate," "estimate," "approximate," "expect," "may," "will," "project," "intend," "plan," "believe" and other words of similar meaning and expression in connection with any discussion of future operating or financial performance. These statements are likely to relate to, among other things, our strategy, goals, plans and projections regarding our financial position, results of operations, market position, and product development, all of which are based on current expectations that involve inherent risks and uncertainties, including factors that could delay, divert or change any of them in the next several years. It is not possible to predict or identify all factors; however, they may include the following: global and regional economic conditions; energy costs; risks associated with the availability and costs of raw materials; commodity prices; risks associated with integrating recent acquisitions, as well as any future acquisitions, and achieving the expected savings and synergies; risks relating to business divestitures, including those described in the above release; competition; demands on management resources; risks associated with international markets, such as currency exchange rates and social and political environments or instability; future terrorist attacks or acts of war; labor relations; demand for and market acceptance of new and existing products; and risks associated with the implementation of restructuring plans, cost-reduction initiatives and environmental remediation matters. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We provide additional information about many of the specific risks our Company faces in the "Risk Factors" Section of our Annual Report on Form 10-K, as well as in our other securities filings. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

Kennametal Inc. is a leading global supplier of tooling, engineered components and advanced materials consumed in production processes. The company improves customers' competitiveness by providing superior economic returns through the delivery of application knowledge and advanced technology to master the toughest of materials application demands. Companies producing everything from airframes to coal, from medical implants to oil wells and from turbochargers to motorcycle parts recognize Kennametal for extraordinary contributions to their value chains. Customers buy over $2.3 billion annually of Kennametal products and services - delivered by our approximately 13,500 talented employees in over 60 countries - with almost 50 percent of these revenues coming from outside the United States. Visit us at www.kennametal.com [KMT-E]

                            FINANCIAL HIGHLIGHTS

              Consolidated Statements of Income (Unaudited):

                             Three Months Ended        Six Months Ended
                                December 31,              December 31,
                             2006        2005 (a)     2006         2005 (a)

  Sales                    $569,321    $562,536   $1,112,132   $1,108,302
  Cost of goods sold        371,171     365,815      726,951      714,253

    Gross profit            198,150     196,721      385,181      394,049

  Operating expense         140,329     142,674      275,373      287,575
  Loss on divestiture             -           -        1,686            -
  Amortization of
   intangibles                1,955       1,438        3,895        2,789

    Operating income         55,866      52,609      104,227      103,685

  Interest expense            7,286       7,984       14,713       15,813
  Other income, net            (625)     (1,178)      (3,631)      (2,057)

    Income from continuing
     operations before
     income taxes and
     minority interest       49,205      45,803       93,145       89,929

  Provision for income
   taxes                     15,006      14,382       28,935       29,682

  Minority interest
   expense                      642         511        1,199        1,259

  Income from continuing
   operations                33,557      30,910       63,011       58,988

  (Loss) income from
   discontinued
   operations, net
   of income taxes (b)       (3,506)        177       (2,599)         196

  Net income                $30,051     $31,087      $60,412      $59,184

  Basic earnings (loss)
   per share
    Continuing
     operations               $0.87       $0.81        $1.65        $1.55
    Discontinued
     operations (b)           (0.09)          -        (0.07)        0.01
                              $0.78       $0.81        $1.58        $1.56

  Diluted earnings (loss)
   per share
    Continuing
     operations               $0.86       $0.79        $1.61        $1.51
    Discontinued
     operations (b)           (0.09)          -        (0.07)        0.01
                              $0.77       $0.79        $1.54        $1.52

  Dividends per share         $0.21       $0.19        $0.40        $0.38
  Basic weighted average
   shares outstanding        38,331      38,174       38,270       38,014
  Diluted weighted
   average shares
   outstanding               39,225      39,278       39,142       39,064

   (a) Amounts have been reclassified to reflect discontinued operations
       related to the divestitures of Electronics - AMSG and CPG - MSSG.
   (b) (Loss) income from discontinued operations reflects divested results
       of Electronics - AMSG and CPG - MSSG.



                           FINANCIAL HIGHLIGHTS(Continued)

            CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited):

  (in thousands)                              December 31,      June 30,
                                                  2006            2006
  ASSETS
  Cash and cash equivalents                     $114,121        $233,976
  Accounts receivable, net                       382,426         386,714
  Inventories                                    359,911         334,949
  Current assets of discontinued operations
   held for sale                                       -          24,280
  Other current assets                           103,124         106,938
    Total current assets                         959,582       1,086,857
  Property, plant and equipment, net             560,335         530,379
  Goodwill and intangible assets, net            680,246         618,423
  Assets of discontinued operations held for sale      -          11,285
  Other assets                                   199,731         188,328
    Total                                     $2,399,894      $2,435,272

  LIABILITIES
  Current maturities of long-term debt and
   capital leases, including notes payable        $2,786          $2,214
  Accounts payable                               124,083         124,907
  Current liabilities of discontinued operations
   held for sale                                       -           3,065
  Other current liabilities                      244,541         332,013
    Total current liabilities                    371,410         462,199
  Long-term debt and capital leases              373,686         409,508
  Other liabilities                              269,243         253,574
    Total liabilities                          1,014,339       1,125,281

  MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES  15,807          14,626
  SHAREOWNERS' EQUITY                          1,369,748       1,295,365
    Total                                     $2,399,894      $2,435,272



                    SEGMENT DATA (Unaudited):

                             Three Months Ended      Six Months Ended
  (in thousands)                December 31,             December 31,
                             2006        2005 (a)     2006         2005 (a)
  Outside Sales:
  Metalworking Solutions
   and  Services Group     $373,995    $336,197     $731,079     $667,777
  Advanced Materials
   Solutions Group          195,326     161,002      381,053      310,186
  J&L Industrial Supply           -      65,337            -      130,339
    Total outside sales    $569,321    $562,536   $1,112,132   $1,108,302

  Sales By Geographic Region:
  United States            $268,299    $295,907     $535,162     $585,977
  International             301,022     266,629      576,970      522,325
    Total sales by
     geographic region     $569,321    $562,536   $1,112,132   $1,108,302

  Operating Income (Loss):
  Metalworking Solutions
   and Services Group       $45,208     $42,585     $90,874      $88,526
  Advanced Materials
   Solutions Group           33,993      29,582      61,379       53,434

  J&L Industrial Supply           -       6,312           -       13,156
  Corporate and
   eliminations (c)         (23,335)    (25,870)    (48,026)     (51,431)
    Total operating income  $55,866     $52,609    $104,227     $103,685

   (a) Amounts have been reclassified to reflect discontinued operations
       related to the divestitures of Electronics - AMSG and CPG - MSSG.
   (c) Includes corporate functional shared services and intercompany
       eliminations.



                    FINANCIAL HIGHLIGHTS (Continued)

In addition to reported results under generally accepted accounting principles in the United States of America (GAAP), the following financial highlight tables also include, where appropriate, a reconciliation of gross profit, operating expense, operating income, income from continuing operations, net income and diluted earnings per share, in each case excluding special items, adjusted free operating cash flow, adjusted segment sales, and adjusted return on invested capital (which are non-GAAP financial measures), to the most directly comparable GAAP measures. Management believes that the investor should have available the same information that management uses to assess operating performance, determine compensation, and assess the capital structure of the Company. These non-GAAP measures should not be considered in isolation or as a substitute for the most comparable GAAP measures. Investors are cautioned that non-GAAP financial measures utilized by the Company may not be comparable to non-GAAP financial measures used by other companies.

  RECONCILIATION TO GAAP - THREE MONTHS ENDED DECEMBER 31, 2006 (Unaudited)

                                                  Income
  (in thousands,                                   from
  except per      Gross   Operating  Operating  Continuing    Net    Diluted
  share amounts)  Profit   Expense    Income    Operations   Income   EPS

  2006 Reported
   Results       $198,150  $140,329   $55,866     $33,557   $30,051  $ 0.77
    Electronics
     impairment
     and
     divestiture
     -related
     charges           -         -         -           -      3,213    0.08
  2006 Results,
   excl. special
   items         $198,150  $140,329   $55,866     $33,557   $33,264  $ 0.85

  For the three months ended December 31, 2005, there were no special items.



  RECONCILIATION TO GAAP - SIX MONTHS ENDED DECEMBER 31, 2006 (Unaudited)

                                                  Income
  (in thousands,                                   from
  except per      Gross   Operating  Operating  Continuing    Net    Diluted
  share amounts)  Profit   Expense    Income    Operations   Income   EPS
  2006 Reported
   Results       $385,181  $275,373   $104,227    $63,011   $60,412   $1.54
    Electronics
     impairment
     and
     divestiture
     -related
     charges           -         -          -          -      3,213    0.09
    Loss on
     divestiture
     of CPG and
     transaction
     -related charges  -         -          -          -        368    0.01
    Adjustment on
     J&L divestiture
     and transaction
     -related charges  -     (333)      2,019      1,252      1,252    0.03
  2006 Results,
   excl. special
   items         $385,181  $275,040   $106,246    $64,263   $65,245  $ 1.67

  For the six months ended December 31, 2005, there were no special items.



  RECONCILIATION TO GAAP - YEAR ENDED JUNE 30, 2006 (Unaudited)

                                                                Diluted EPS
                                                  Income from      from
                                                  Continuing    Continuing
  (in thousands, except per share amounts)        Operations    Operations

  2006 Reported Results                              $272,251      $6.88
    Gain on divestiture of J&L recorded
     at corporate level                                (1,091)     (0.03)
    J&L transaction-related charges recorded at
     corporate level                                    3,956       0.10
    Tax impact of cash repatriation under AJCA         11,176       0.28
    Loss on sale of Presto                              9,457       0.24
    Favorable resolution of tax contingencies         (10,873)     (0.27)
    Divestiture impact of J&L (d)                    (149,971)     (3.79)
  2006 Adjusted Results                              $134,905      $3.41

   (d) Excludes the impact of commercial relationships entered into in
       connection with the divestiture transaction.



                     FINANCIAL HIGHLIGHTS (Continued)

RECONCILIATION OF ADJUSTED FREE OPERATING CASH FLOW INFORMATION (Unaudited):

                                                          Six Months Ended
                                                            December 31,
  (in thousands)                                           2006     2005

  Net cash flow provided by operating activities          $35,820  $75,623
  Purchases of property, plant and equipment              (44,929) (31,297)
  Proceeds from disposals of property, plant and
   equipment                                                  781    1,452
    Free operating cash flow                               (8,341)  45,778
  Income taxes paid (refunded) during first quarter        86,236     (572)
    Adjusted free operating cash flow                     $77,895  $45,206



  MSSG ADJUSTED SALES (Unaudited)

                                   Three Months Ended      Six Months Ended
                                      December 31,            December 31,
  (in thousands)                     2006      2005       2006       2005

  Sales, as reported               $373,995  $336,197   $731,079   $667,777
  Foreign currency translation      (11,398)        -    (18,770)         -
  Divestiture-related adjustments         -     7,966          -     16,374
    Adjusted sales                 $362,597  $344,163   $712,309   $684,151



  AMSG ADJUSTED SALES (Unaudited)

                                    Three Months Ended      Six Months Ended
                                       December 31,           December 31,
  (in thousands)                     2006        2005      2006       2005

  Sales, as reported               $195,326    $161,002  $381,053  $310,186
  Foreign currency translation       (2,101)          -    (3,222)        -
  Acquisition- and divestiture-
   related adjustments              (14,562)      1,595   (29,696)    5,207
    Adjusted sales                 $178,663    $162,597  $348,135  $315,393



  RETURN ON INVESTED CAPITAL (Unaudited):

  December 31, 2006 (in thousands, except percents)

  Invested
   Capital 12/31/2006  9/30/2006  6/30/2006  3/31/2006 12/31/2005    Average

  Debt       $376,472   $409,592   $411,722   $365,906   $410,045   $394,748
  Accounts
   receivable
   securitized      -          -          -    106,106    100,295     41,280
  Minority
   interest    15,807     15,177     14,626     18,054     16,918     16,116
  Shareowners'
   equity   1,369,748  1,319,599  1,295,365  1,115,110  1,045,974  1,229,159
  Total    $1,762,027 $1,744,368 $1,721,713 $1,605,176 $1,573,232 $1,681,303


                                        Three Months Ended
  Interest Expense     12/31/2006  9/30/2006  6/30/2006  3/31/2006    Total
  Interest expense         $7,286     $7,427     $7,478     $7,728  $29,919
  Securitization fees           6         22      1,288      1,241    2,557
  Total interest expense   $7,292     $7,449     $8,766     $8,969  $32,476
  Income tax benefit                                                 11,237
  Total interest expense,
   net of tax                                                       $21,239


  Total Income         12/31/2006  9/30/2006  6/30/2006  3/31/2006    Total
  Net Income, as
   reported               $30,051    $30,361   $164,196    $32,903 $257,511
  Gain on divestiture
   of J&L                       -      1,045   (132,001)         - (130,956)
  J&L transaction-related
   charges                      -        207      2,796      1,160    4,163
  Loss on divestiture of
   Electronics, impairment
   and transaction-related
   charges                  3,213          -     15,366          -   18,579
  Tax impact of cash
   repatriation under AJCA      -          -     11,176          -   11,176
  Loss on divestiture of
   CPG, goodwill impairment
   and transaction-related
   charges                      -        368     (2,192)     5,030    3,206
  Loss on divestiture of
   Presto                       -          -      1,410      8,047    9,457
  Favorable resolution of
   tax contingencies            -          -    (10,873)         -  (10,873)
  Minority interest expense   642        557        525        782    2,506
  Total Income, excluding
   special items          $33,906    $32,538    $50,403    $47,922 $164,769
  Total interest expense,
   net of tax                                                        21,239
                                                                   $186,008
  Average invested capital                                       $1,681,303
  Adjusted Return on Invested Capital                                  11.1%

  Return on invested capital calculated utilizing net income,
   as reported is as follows:
  Net income, as reported                                          $257,511
  Total interest expense, net of tax                                 21,239
                                                                   $278,750
  Average invested capital                                       $1,681,303

  Return on Invested Capital                                           16.6%



                     FINANCIAL HIGHLIGHTS (Continued)

  RETURN ON INVESTED CAPITAL (Unaudited):

  December 31, 2005 (in thousands, except percents)

  Invested
   Capital 12/31/2005  9/30/2005  6/30/2005  3/31/2005 12/31/2004   Average
  Debt       $410,045   $415,250   $437,374   $485,168   $405,156  $430,599
  Accounts
   receivable
   securit
   -ized      100,295    100,445    109,786    120,749    115,253   109,306
  Minority
   interest    16,918     18,117     17,460     19,664     19,249    18,282
   Shareowners'
   equity   1,045,974  1,009,394    972,862  1,021,186  1,003,507 1,010,585
  Total    $1,573,232 $1,543,206 $1,537,482 $1,646,767 $1,543,165 $1,568,772


                                            Three Months Ended
  Interest Expense     12/31/2005  9/30/2005  6/30/2005  3/31/2005    Total
  Interest expense         $7,984     $7,829     $7,897     $6,803  $30,513
  Securitization fees       1,170      1,065        981        868    4,084
  Total interest
   expense                 $9,154     $8,894     $8,878     $7,671  $34,597
  Income tax benefit                                                 12,109
  Total interest expense,
   net of tax                                                       $22,488


  Total Income         12/31/2005  9/30/2005  6/30/2005  3/31/2005    Total
  Net income, as
   reported               $31,087    $28,097    $37,740    $30,650 $127,574
  Goodwill impairment
   charge                       -          -          -     3,306     3,306
  Loss on assets held
   for sale                     -          -          -     1,086     1,086
  Minority interest
   expense                    511        748        238     1,449     2,946
  Total income, excluding
   special items          $31,598    $28,845    $37,978   $36,491  $134,912
  Total interest expense, net of tax                                 22,488
                                                                   $157,400
  Average invested capital                                       $1,568,772
  Adjusted Return on Invested Capital                                  10.0%

  Return on invested capital calculated utilizing net income,
   as reported is as follows:
  Net income, as reported                                          $127,574
  Total interest expense, net of tax                                 22,488
                                                                   $150,062
  Average invested capital                                       $1,568,772
  Return on Invested Capital                                            9.6%

FCMN Contact: jan.tagliaferi@kennametal.com

SOURCE: Kennametal Inc.