Kennametal Inc. today reported third quarter fiscal 2007 EPS of $1.32. This represents an increase of 61 percent from the prior year quarter reported EPS of $0.82 and a 13 percent increase compared with prior year adjusted EPS of $1.17.

For the first nine months of fiscal 2007, reported EPS increased 22 percent to $2.86 compared with prior year reported EPS of $2.34. Adjusted EPS for the first nine months of fiscal 2007 increased 11 percent to $2.99 compared with prior year adjusted EPS of $2.69.

Carlos M. Cardoso, Kennametal's President and Chief Executive Officer said, "I am very pleased with our company's performance in the third quarter of fiscal 2007. We delivered solid organic sales growth as well as record earnings per share and return on invested capital, in spite of a challenging economic environment in North America. These strong results are on top of tough comparisons from the prior year."

Cardoso added, "This performance is evidence of the strength of our strategy, which we execute by applying the principles of the Kennametal Value Business System, our management operating system. As we move forward, we continue to leverage our global infrastructure to drive additional growth. We remain committed to growing the top line of both our Metalworking and Advanced Materials businesses, accelerating our margin expansion opportunities and generating strong cash flow."

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

  Highlights of Fiscal 2007 Third Quarter

  -- Sales for the quarter were $616 million, compared with $609 million in
     the same quarter last year.  Sales grew 7 percent on an organic basis
     and also benefited 3 percent from favorable foreign currency effects.
     This growth was mostly offset by the net impact of acquisitions and
     divestitures of 9 percent, primarily the divestiture of J&L Industrial
     Supply (J&L).  J&L sales were $74 million in the March quarter last
     year.
  -- Income from continuing operations was $52 million, compared with $38
     million in the prior year quarter, an increase of 38 percent despite
     the J&L divestiture.  J&L contributed $9 million in operating income in
     the March quarter last year.  The current year quarter results
     benefited from strong organic sales growth and an ongoing reduction in
     operating expenses.  Additionally, the March quarter results benefited
     from lower interest expense and lower securitization fees.
  -- During the March quarter, Kennametal completed its strategic analysis
     and plan for the Widia brand. As a key element of the company's channel
     and brand strategy, the company will leverage the strength of the Widia
     brand to accelerate growth in the distribution market. This analysis
     resulted in a non-cash impairment charge of $6 million related to the
     trademark intangible asset.
  -- The effective tax rate for the March quarter was 26 percent, compared
     with 34 percent in the prior year quarter.  The current year rate
     benefited from increased earnings from the company's pan-European
     business strategy.  In addition, the prior year rate was unfavorably
     impacted by special charges that did not provide a tax benefit.
  -- Reported EPS increased 61 percent to $1.32, compared with prior year
     quarter reported EPS of $0.82.  Reported EPS increased 13 percent,
     compared with prior year quarter adjusted EPS of $1.17.    A
     reconciliation follows:



                Earnings Per Diluted Share Reconciliation

  Third Quarter FY 2007              Third Quarter FY 2006
  Reported EPS            $1.32      Reported EPS                      $0.82
  No special items                   Loss on divestiture of Presto      0.20
                                     CPG goodwill impairment charge     0.12
                                     J&L transaction-related charges    0.03
                          $1.32      Adjusted EPS                      $1.17

  -- Cash flow from operating activities was $113 million for the first nine
     months of fiscal 2007, compared with $117 million in the prior year
     period.  Free operating cash flow was $47 million for the current year
     period, compared with $70 million in the prior year period. Included in
     the current year period free operating cash flow 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 $133 million versus $69
     million in the prior year period.
  -- Adjusted return on invested capital (ROIC) increased 30 basis points to
     11.0 percent, a record March quarter, from 10.7 percent in the prior
     year.

  Highlights of First Nine Months of Fiscal 2007
  -- Sales of $1.7 billion were unchanged with the same period last year.
     Sales grew 6 percent on an organic basis and 3 percent due to favorable
     foreign currency effects.  This growth was mostly offset by the net
     impact of acquisitions and divestitures of 8 percent, primarily the J&L
     divestiture.  J&L sales were $205 million in the prior year period.
  -- Income from continuing operations was $115 million, compared with $97
     million in the prior year period, an increase of 19 percent despite the
     J&L divestiture.  J&L contributed $23 million in operating income in
     the prior year period.  The current year period results benefited from
     strong organic sales growth and an ongoing reduction in operating
     expenses.  Amortization expense increased $2 million due to recent
     acquisitions.  Additionally, the current period results benefited from
     lower interest expense and lower securitization fees.
  -- During the March quarter, Kennametal completed its strategic analysis
     and plan for the Widia brand which resulted in a non-cash impairment
     charge of $6 million as described above.
  -- The first nine months of fiscal 2007 also reflected a lower effective
     tax rate of 29 percent compared with the prior year period of 33
     percent.  The current year rate benefited from increased earnings from
     the company's pan-European business strategy and the extension of the
     research, development and experimental tax credit.  In addition, the
     prior year rate was unfavorably impacted by special charges that did
     not provide a tax benefit.
  -- Reported EPS of $2.86 increased 22 percent compared with prior year
     reported EPS of $2.34.  Adjusted EPS of $2.99 increased 11 percent
     compared with prior year adjusted EPS of $2.69.  A reconciliation
     follows:


                Earnings Per Diluted Share Reconciliation

     First Nine Months of FY 2007              First Nine Months of FY 2006
     Reported EPS                      $2.86   Reported EPS            $2.34
     Loss on divestiture of CPG and            Loss on divestiture of
      transaction-related charges       0.01    Presto                  0.20
     Adjustment on J&L divestiture and         CPG goodwill impairment
      transaction-related charges       0.03    charge                  0.12
     Electronics impairment and                J&L transaction-related
      divestiture-related charges       0.09    charges                 0.03
     Adjusted EPS                      $2.99   Adjusted EPS            $2.69


  Business Segment Highlights for the Fiscal 2007 Third Quarter

Metalworking Solutions & Services Group (MSSG) continued to deliver top-line growth in the third quarter, led by year-over-year expansion in the distribution, general engineering and machine tool markets and the effect of an acquisition. The European market continued to be favorable. Asia Pacific and India delivered double-digit growth, while the North American market showed flat-to-modest growth.

In the March quarter, MSSG sales were up 7 percent on an organic basis. Europe sales increased 8 percent. Asia Pacific and India sales grew by 22 percent and 25 percent, respectively. North America sales increased 2 percent.

MSSG operating income was up 23 percent and the operating margin of 15 percent increased over the same period last year. The third quarter results benefited from top-line growth and ongoing cost containment, and included a non-cash impairment charge of $6 million. The prior year results included divestiture-related charges of $8 million.

Advanced Materials Solutions Group (AMSG) continued to deliver top-line growth in the March quarter, driven by favorable international 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 6 percent on an organic basis. Energy product sales were up 18 percent, mining and construction product sales were higher by 4 percent and engineered product sales increased 4 percent.

AMSG operating income and margin were lower than the prior year due primarily to higher 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 fourth quarter 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 to be favorable, 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.

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

The company expects fourth quarter 2007 EPS to be in the range of $1.45 to $1.50. The company's guidance for adjusted EPS for the full fiscal year is in the range of $4.45 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.

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. Based on anticipated capital expenditures of $90 million, the company expects to generate between $100 million to $110 million of free operating cash flow for fiscal 2007. Included in this amount are income tax payments of $86 million, as mentioned above. Adjusted free operating cash flow is expected to be approximately $185 million to $195 million.

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 May 22, 2007 to shareowners of record as of the close of business on May 7, 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.

Third 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 May 9, 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):

  (in thousands, except
   per share amounts)
                              Three Months Ended      Nine Months Ended
                                   March 31,              March 31,
                                2007      2006(a)      2007      2006(a)

  Sales                       $615,884   $609,159  $1,728,016  $1,717,461
  Cost of goods sold(b)        395,046    395,076   1,121,997   1,109,329

    Gross profit               220,838    214,083     606,019     608,132

  Operating expense            136,933    146,016     412,306     433,591
  Asset impairment charge        5,970          -       5,970           -
  Loss on divestitures               -        692       1,686         692
  Amortization of
   intangibles                   1,808      1,409       5,703       4,198

    Operating income            76,127     65,966     180,354     169,651

  Interest expense               6,915      7,728      21,628      23,541
  Other (income)
   expense, net                 (1,803)       145      (5,435)     (1,912)

  Income from continuing
   operations before
   income taxes and
   minority interest            71,015     58,093     164,161     148,022

  Provision for income taxes    18,520     19,684      47,457      49,366

  Minority interest expense        757        782       1,956       2,041

  Income from continuing
   operations                   51,738     37,627     114,748      96,615
  Loss from discontinued
   operations(c)                     -     (4,724)     (2,599)     (4,528)

  Net income                   $51,738    $32,903    $112,149     $92,087

  Basic earnings (loss)
   per share:
    Continuing operations        $1.35      $0.97       $3.00       $2.52
    Discontinued
     operations(c)                   -      (0.12)      (0.07)      (0.11)
                                 $1.35      $0.85       $2.93       $2.41

  Diluted earnings (loss)
   per share:
    Continuing operations        $1.32      $0.94       $2.93       $2.45
    Discontinued
     operations(c)                   -      (0.12)      (0.07)      (0.11)
                                 $1.32      $0.82       $2.86       $2.34

  Dividends per share            $0.21      $0.19       $0.61       $0.57
  Basic weighted average
   shares outstanding           38,428     38,832      38,318      38,283
  Diluted weighted average
   shares outstanding           39,232     39,978      39,176      39,396

  (a) Amounts have been reclassified to reflect discontinued operations
      related to the divestitures of Electronics - AMSG and CPG - MSSG.
  (b) For the three and nine months ended March 31, 2006, cost of goods sold
      includes a charge of $7,355 related to the Presto divestiture.
  (c) Loss from discontinued operations reflects divested results of
      Electronics - AMSG and CPG - MSSG.



            CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited):

  (in thousands)                                  March 31,      June 30,
                                                     2007           2006
  ASSETS
  Cash and cash equivalents                        $94,246       $233,976
  Accounts receivable, net                         427,308        386,714
  Inventories                                      378,893        334,949
  Current assets of discontinued operations
   held for sale                                         -         24,280
  Other current assets                              99,378        106,938
    Total current assets                           999,825      1,086,857
  Property, plant and equipment, net               577,864        530,379
  Goodwill and intangible assets, net              736,920        618,423
  Assets of discontinued operations held
   for sale                                              -         11,285
  Other assets                                     190,199        188,328
    Total                                       $2,504,808     $2,435,272

  LIABILITIES
  Current maturities of long-term debt and
   capital leases, including notes payable          $6,175         $2,214
  Accounts payable                                 145,524        124,907
  Current liabilities of discontinued
   operations held for sale                              -          3,065
  Other current liabilities                        265,996        332,013
    Total current liabilities                      417,695        462,199
  Long-term debt and capital leases                365,346        409,508
  Other liabilities                                273,636        253,574
    Total liabilities                            1,056,677      1,125,281

  MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES    16,896         14,626
  SHAREOWNERS' EQUITY                            1,431,235      1,295,365
    Total                                       $2,504,808     $2,435,272



                        SEGMENT DATA (Unaudited):

  (in thousands)                Three Months Ended      Nine Months Ended
                                     March 31,              March 31,
                                  2007    2006(d)      2007      2006(d)

  Outside Sales:
  Metalworking Solutions and
   Services Group              $415,525  $360,161  $1,146,604  $1,027,938
  Advanced Materials
   Solutions Group              200,359   174,612     581,412     484,798
  J&L Industrial Supply               -    74,386           -     204,725
    Total outside sales        $615,884  $609,159  $1,728,016  $1,717,461

  Sales By Geographic Region:
  United States                $292,742  $330,570    $827,904    $916,546
  International                 323,142   278,589     900,112     800,915
    Total sales by geographic
     region                    $615,884  $609,159  $1,728,016  $1,717,461

  Operating Income (Loss):
  Metalworking Solutions
   and Services Group           $60,784   $49,609    $151,658    $138,135
  Advanced Materials
   Solutions Group               31,970    33,563      93,349      86,997
  J&L Industrial Supply               -     9,454           -      22,610
  Corporate and eliminations(e) (16,627)  (26,660)    (64,653)    (78,091)
    Total operating income      $76,127   $65,966    $180,354    $169,651

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

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 (which are GAAP financial measures), in each case excluding special items, as well as adjusted free operating cash flow 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.

  There were no special items for the three months ended March 31, 2007.


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

                                                     Income from
  (in thousands, except    Gross Operating Operating Continuing  Net Diluted
   per share amounts)     Profit  Expense   Income   Operations Income  EPS
  2006 Reported Results  $214,083 $146,016  $65,966   $37,627  $32,903 $0.82
    Loss on divestiture
     of Presto              7,355        -    8,047     8,047    8,047  0.20
    CPG goodwill
     impairment charge          -        -        -         -    5,030  0.12
    J&L transaction-
     related charge             -   (1,871)   1,871     1,160    1,160  0.03
  2006 Results, excl.
    special items        $221,438 $144,145  $75,884   $46,834  $47,140 $1.17


  RECONCILIATION TO GAAP - NINE MONTHS ENDED MARCH 31, 2007 (Unaudited)

                                                    Income from
  (in thousands, except  Gross  Operating Operating Continuing  Net  Diluted
   per share amounts)    Profit  Expense   Income   Operations Income  EPS
  2007 Reported
   Results            $606,019  $412,306  $180,354  $114,748 $112,149  $2.86
    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
  2007 Results, excl.
   special items      $606,019  $411,973  $182,373   $116,000 $116,982 $2.99


  RECONCILIATION TO GAAP - NINE MONTHS ENDED MARCH 31, 2006 (Unaudited)

                                                    Income from
  (in thousands, except    Gross Operating Operating Continuing  Net Diluted
   per share amounts)     Profit  Expense   Income   Operations Income  EPS
  2006 Reported Results  $608,132  $433,591  $169,651  $96,615 $92,087 $2.34
    Loss on divestiture
     of Presto              7,355         -     8,047    8,047   8,047  0.20
    CPG goodwill
     impairment charge          -         -         -        -   5,030  0.12
    J&L transaction-
     related charge             -    (1,871)    1,871    1,160   1,160  0.03
  2006 Results, excl.
   special items         $615,487  $431,720  $179,569  105,822 106,324  2.69


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

                                                         Income     Diluted
                                                          from     EPS 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 divestiture of Presto                           9,457      0.24
    Favorable resolution of tax
     contingencies                                        (10,873)    (0.27)
    Divestiture impact of J&L(f)                         (149,971)    (3.79)
  2006 Adjusted Results                                  $134,905     $3.41

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


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

                                                          Nine Months Ended
                                                              March 31,
  (in thousands)                                           2007      2006

  Net cash flow provided by operating activities        $113,442  $117,253
  Purchases of property, plant and equipment             (67,129)  (49,458)
  Proceeds from disposals of property, plant and
   equipment                                               1,021     1,900
    Free operating cash flow                              47,334    69,695
  Income taxes paid (refunded) during first quarter       86,236      (572)
    Adjusted free operating cash flow                   $133,570   $69,123



  RETURN ON INVESTED CAPITAL (Unaudited):

  March 31, 2007 (in thousands, except percents)


  Invested
   Capital   3/31/2007 12/31/2006  9/30/2006  6/30/2006  3/31/2006   Average

  Debt       $371,521   $376,472   $409,592   $411,722   $365,906   $387,043
  Accounts
   receivable
   securitized      -         -          -         -      106,106     21,221
  Minority
   interest    16,896     15,807     15,177     14,626     18,054     16,112
  Shareowners'
   equity   1,431,235  1,369,748  1,319,599  1,295,365  1,115,110  1,306,211
  Total    $1,819,652 $1,762,027 $1,744,368 $1,721,713 $1,605,176 $1,730,587

                                     Three Months Ended

  Interest Expense     3/31/2007 12/31/2006 9/30/2006 6/30/2006      Total
  Interest expense        $6,915     $7,286    $7,427    $7,478    $29,106
  Securitization fees          5          6        22     1,288      1,321
  Total interest
   expense                $6,920     $7,292    $7,449    $8,766    $30,427
  Income tax benefit                                                 9,843
  Total interest
   expense, net of tax                                             $20,584

  Total Income         3/31/2007 12/31/2006 9/30/2006 6/30/2006       Total
  Net Income, as
   reported              $51,738    $30,051   $30,361  $164,196    $276,346
  Gain on divestiture
   of J&L                      -          -     1,045  (132,001)   (130,956)
  J&L transaction-
   related charges             -          -       207     2,796       3,003
  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)     (1,824)
  Loss on divestiture of
   Presto                      -          -          -    1,410       1,410
  Favorable resolution of
   tax contingencies           -          -          -  (10,873)    (10,873)
  Minority interest
   expense                   757        642        557      525       2,481
  Total Income,
   excluding special
   items                 $52,495    $33,906    $32,538  $50,403    $169,342
  Total interest
   expense, net of tax                                               20,584
                                                                   $189,926

  Average invested capital                                       $1,730,587
  Adjusted Return on Invested                                         11.0%
  Capital

  Return on invested capital calculated utilizing net income,
   as reported is as follows:
  Net income, as reported                                          $276,346
  Total interest expense, net of tax                                 20,584
                                                                   $296,930
  Average invested capital                                       $1,730,587
  Return on Invested Capital                                          17.2%



  RETURN ON INVESTED CAPITAL (Unaudited):

  March 31, 2006 (in thousands, except percents)

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

  Debt     $365,906   $410,045   $415,250   $437,374  $485,168    $422,749
  Accounts
   receivable
   securi-
   tized    106,106    100,295    100,445    109,786   120,749     107,476
  Minority
   interest  18,054     16,918     18,117     17,460    19,664      18,043
  Share-
   owners'
   equity 1,115,110  1,045,974  1,009,394    972,862  1,021,186  1,032,905
  Total  $1,605,176 $1,573,232 $1,543,206 $1,537,482 $1,646,767 $1,581,173



                            Three Months Ended

  Interest Expense    3/31/2006  12/31/2005  9/30/2005  6/30/2005    Total

  Interest expense      $7,728     $7,984      $7,829     $7,897    $31,438
  Securitization fees    1,241      1,170       1,065        981      4,457

  Total interest
   expense              $8,969     $9,154      $8,894     $8,878    $35,895
  Income tax benefit                                                 12,599
  Total interest
   expense, net of tax                                              $23,296

  Total Income        3/31/2006  12/31/2005  9/30/2005  6/30/2005    Total

  Net income, as
   reported            $32,903    $31,087     $28,097    $37,740   $129,827
  Loss on divesti-
   ture of Presto        8,047          -           -          -      8,047
  CPG goodwill
   impairment charge     5,030          -           -          -      5,030
  J&L transaction-
   related charges       1,160          -           -          -      1,160
  Minority interest
   expense                 782         511        748        238      2,279
  Total income,
   excluding
   special items       $47,922     $31,598    $28,845    $37,978   $146,343
  Total interest
   expense, net of tax                                               23,296
                                                                   $169,639
  Average invested
   capital                                                       $1,581,173
  Adjusted Return on Invested Capital                                  10.7%

  Return on invested
   capital calculated
   utilizing net
   income, as reported
   is as follows:
  Net income, as reported                                          $129,827
  Total interest expense, net of tax                                 23,296
                                                                   $153,123
  Average invested capital                                       $1,581,173
  Return on Invested Capital                                            9.7%

FCMN Contact: jan.tagliaferi@kennametal.com

SOURCE: Kennametal Inc.