No Items in Cart
Sign In
Loading Profile
English
COVID-19: How Kennametal is responding

Kennametal Inc. today reported fiscal 2010 fourth quarter earnings per diluted share (EPS) of $0.49 compared with prior year quarter reported loss per diluted share of $0.45. Absent restructuring and divestiture related charges, adjusted EPS for the current quarter were $0.61, compared with the prior year quarter adjusted loss per share of $0.13.

"Our fiscal 2010 fourth quarter performance clearly reflects that we are realizing continuing sales growth and higher incremental margins," said Carlos Cardoso, Kennametal's Chairman, President and Chief Executive Officer. "Our talented global workforce continues to successfully implement our strategies through their efforts and dedication."

Cardoso added, "As we begin our new fiscal year, Kennametal is positioned to continue to benefit from improving economic conditions as we remain focused on maximizing opportunities to drive earnings growth. In addition, we expect to maintain a strong balance sheet and generate solid cash flows. We have proven that we can operate effectively in a challenging environment, demonstrating that Kennametal is a business capable of further expanding our profitability and delivering superior value to our shareholders."

Reconciliations of all non-GAAP financial measures are set forth in the attached tables, and the corresponding descriptions are contained in our report on Form 8-K to which this release is attached.

  Fiscal 2010 Fourth Quarter Key Developments

  --  Sales were $539 million, compared with $386 million in the same
      quarter last year. Sales increased 40 percent due to organic growth of
      39 percent and a 1 percent favorable impact from foreign currency
      effects.  Sales improved sequentially from the March quarter by 9
      percent, representing the fourth consecutive quarter of sequential
      sales growth.
  --  The company realized pre-tax benefits from restructuring programs of
      approximately $38 million. Pre-tax restructuring and related charges
      of $13 million, or $0.12 per diluted share, were recorded in the
      quarter.
  --  Operating income was $61 million compared with an operating loss of
      $25 million in the same quarter last year.  Absent restructuring and
      related charges in both periods, operating income was $74 million,
      compared with an operating loss of $3 million in the prior year
      quarter.  Adjusted operating margin reached 13.8 percent, despite the
      costs of approximately $20 million for the restoration of salaries and
      other employment related costs that had been temporarily reduced. The
      increased margin was driven by higher sales, increased capacity
      utilization, savings from restructuring programs and ongoing cost
      discipline.  In addition, incremental margins were very strong on both
      a year-over-year and sequential basis.
  --  Liquidity and operating flexibility were enhanced due to the company's
      new 5-year credit facility.
  --  Reported EPS were $0.49 compared with prior year quarter reported loss
      per diluted share of $0.45.  Adjusted EPS were $0.61 compared with
      prior year quarter adjusted loss per diluted share of $0.13.  A
      reconciliation follows:



        Earnings (Loss) Per Diluted Share Reconciliation

  Fourth Quarter FY 2010              Fourth Quarter FY 2009
                                       Reported loss per
  Reported EPS              $0.49      diluted share                ($0.45)
     Restructuring and                   Restructuring and
      related charges        0.12         related charges             0.08
                                         Loss on divestiture and
                                          related                     0.24
                                            charges                   ----
                                       Adjusted loss per
  Adjusted EPS              $0.61      diluted share                ($0.13)
                            =====                                   ======


  Segment Highlights for the Fiscal 2010 Fourth Quarter

  --  Metalworking Solutions & Services Group (MSSG) sales increased by 44
      percent from the prior year quarter, driven by organic growth of 43
      percent and favorable foreign currency effects of 1 percent.  On an
      organic basis, sales in Latin America, Asia Pacific and India
      increased 66 percent, 65 percent and 64 percent, respectively. North
      America and Europe reported organic sales increases of 42 percent and
      34 percent, respectively, compared with the prior year quarter. 
      Sequentially, sales increased by 8 percent as global industrial
      production continued to improve. This represents the fourth
      consecutive quarter of sequential sales growth for MSSG.
  --  MSSG operating income was $45 million compared with an operating loss
      of $29 million for the same quarter of the prior year.  Absent
      restructuring and related charges recorded in both periods, MSSG
      operating income was $57 million compared with an operating loss of
      $16 million in the prior year quarter.  The primary drivers of the
      increase in operating income were higher sales volumes and improved
      capacity utilization, cost savings from restructuring programs and
      continued cost containment. MSSG adjusted operating margin improved
      sequentially from the March quarter by 580 basis points to 18.1
      percent from 12.3 percent.
  --  Advanced Materials Solutions Group (AMSG) sales increased 34 percent
      from the prior year quarter, driven by 33 percent organic growth and 1
      percent favorable foreign currency effects.  The organic increase was
      primarily driven by higher sales of mining and construction products,
      as well as increased demand for energy related and engineered
      products. Sequentially, sales increased by 11 percent, driven by
      better performance in all AMSG end markets.
  --  AMSG operating income was $43 million, compared with $14 million in
      the same quarter of the prior year.  Absent restructuring and related
      charges recorded in both periods, AMSG operating income was $45
      million in the current quarter compared with $18 million in the prior
      year quarter.  Operating income improved primarily due to higher sales
      volumes, cost savings from restructuring programs and continued cost
      containment. For the second consecutive quarter, AMSG adjusted
      operating margin increased sequentially by 150 basis points to 19.9
      percent from 18.4 percent in the March quarter.

  Fiscal Year 2010 Key Developments

  --  Sales were $1.9 billion compared to $2.0 billion in the previous
      fiscal year. Sales decreased 8 percent on an organic basis, partially
      offset by a 1 percent favorable impact from foreign currency effects
      and a 1 percent increase from a business acquisition made in the prior
      fiscal year.
  --  The company recognized pre-tax benefits from restructuring programs of
      approximately $137 million.  Pre-tax restructuring and related charges
      of $49 million, or $0.52 per share were recorded during the fiscal
      year.
  --  Operating income was $93 million, compared with an operating loss of
      $100 million for the prior fiscal year.  Absent restructuring related
      and asset impairment charges, operating income increased to $142
      million from $85 million in the prior year.  This represents a $57
      million operating income increase on a sales decrease of $116 million.
      This highlights the benefits associated with improved capacity
      utilization, restructuring actions and continued cost containment.
  --  Reported EPS were $0.57, compared to the prior year reported loss per
      diluted share of $1.64.  Adjusted EPS were $1.10, compared with prior
      year adjusted EPS of $0.80.  A reconciliation follows:


           Earnings (Loss) Per Diluted Share Reconciliation

  FY 2010                          FY 2009
                                    Reported loss per
  Reported EPS               $0.57  diluted share             ($1.64)
     Restructuring and                Restructuring and
      related charges         0.52     related charges           0.82
     Loss on divestiture and          Loss on divestiture and
      related                 0.01     related                   0.24
     charges                          charges
                                      Asset impairment
                                       charges                   1.38
  Adjusted EPS               $1.10 Adjusted EPS                 $0.80
                             =====                               ====


  --  Cash flow from operating activities was $165 million, compared with
      $192 million in the prior year. Net capital expenditures were $52
      million for fiscal 2010.  The company generated free operating cash
      flow of $113 million compared with $90 million in the prior fiscal
      year.  The free operating cash flow increase was driven by continued
      working capital management, in particular significantly improved days
      sales outstanding and higher inventory turns, as well as lower capital
      expenditures in the current year.

  Restructuring Actions

Kennametal's restructuring programs continue to remain on track to deliver the anticipated annual ongoing pre-tax permanent savings of $155 million to $160 million once all programs are fully implemented. The cumulative total pre-tax charges are expected to be approximately $160 million to $165 million. As previously mentioned, total restructuring and related benefits realized in fiscal 2010 were approximately $137 million while the related charges recorded inception-to-date were approximately $128 million.

New Credit Facility

On June 25, 2010, the company entered into a new 5-year multi-currency, revolving credit facility that replaced the prior credit facility. The new facility is scheduled to mature in June 2015. Similar to the prior agreement, the new credit agreement permits revolving loans of up to $500 million for working capital, capital expenditures and general corporate purposes. The new facility provides more favorable pricing and increased operating flexibility relative to the prior agreement.

Outlook

The company's outlook for fiscal 2011 assumes that the global economy and worldwide industrial production will continue to gradually improve and that overall economic trends will remain in positive territory. As a result, the company expects to experience positive growth during the fiscal year in all geographies, albeit more modest growth in our served European markets.

  The following are some additional assumptions encompassed in this outlook.

  --  Global industrial production is anticipated to be in the mid single
      digits for the full year with higher growth in the first half of the
      fiscal year.
  --  Sales volumes and related capacity utilization are expected to yield
      strong incremental margins and offset year-over-year cost increases
      for salary restoration and merit increases as well as for pension and
      incentive compensation.
  --  The company's restructuring programs remain on track to deliver annual
      ongoing savings of $155 million to $160 million.
  --  Based on current exchange rates, foreign currency may negatively
      impact results primarily due to the relationship of the U.S. dollar to
      the Euro.
  --  Seasonal earnings are expected to revert back to historical patterns
      with approximately 40 percent of earnings occurring in the first half
      and 60 percent in the second half of the fiscal year.

Under these assumed conditions, Kennametal expects organic sales growth to be 14 percent to 17 percent higher than in fiscal 2010 and total sales growth to be higher by 11 percent to 14 percent. This is in line with the company's goal of growing at least two times the rate of increase in global industrial production.

The company expects EPS for fiscal 2011 to be in the range of $1.85 to $2.15 per share, excluding charges related to previously announced restructuring actions. Kennametal also anticipates cash flow from operating activities of approximately $220 million to $245 million for fiscal 2011. Based on anticipated capital expenditures of $80 million, the company expects to generate between $140 million to $165 million of free operating cash flow for the full fiscal year.

New Operating Structure Implemented as of July 1, 2010

In order to take additional advantage of growth opportunities as well as to provide a better platform for continually improving the efficiency and effectiveness of operations, Kennametal implemented a new operating structure at the start of its new fiscal year on July 1, 2010.

The new structure provides for an enhanced market sector approach coupled with a more customer-centric focus for the sales organization and other key market-facing functions such as customer service, marketing, product management, engineering and product development. The new structure also involves the formation of a single, global integrated supply chain and logistics organization that unleashes additional opportunities to achieve higher customer satisfaction and realize lower costs to serve. Furthermore, the new structure provides for more uniform management of administrative functions on a global basis to further improve the consistency, effectiveness and efficiency of the services provided by these functions.

A key attribute of the new structure is the establishment of two new operating segments by market sector which replace the previous two operating segments that were based on a product focus. The two new reportable operating segments are named Industrial and Infrastructure. The Industrial business is focused on customers within the transportation, aerospace, defense and general engineering market sectors. The Infrastructure business is focused on customers within the energy and earthworks industries.

Under the new structure, more corporate expenses will be allocated to the new segments than were allocated to the previous segments. The remaining corporate expenses that are determined to be non-allocable will continue to be reported as Corporate.

Dividend Declared

Kennametal also announced that its Board of Directors declared a regular quarterly cash dividend of $0.12 per share. The dividend is payable August 25, 2010 to shareowners of record as of the close of business on August 10, 2010.

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 website at www.kennametal.com.

Fourth quarter and full year results for fiscal 2010 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, select "Investor Relations" and then "Events." The replay of this event will also be available on the company's website through August 29, 2010.

Certain statements in this release may be forward-looking in nature, or "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. For example, statements about Kennametal's outlook for earnings, sales volumes, and cash flow for its fiscal year 2011 and its expectations regarding future growth and financial performance are forward-looking statements. These statements are based on current estimates that involve inherent risks and uncertainties. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, our actual results could vary materially from our current expectations. There are a number of factors that could cause our actual results to differ from those indicated in the forward-looking statements. They include: prolonged economic recession; restructuring and related actions (including associated costs and anticipated benefits); availability and cost of the raw materials we use to manufacture our products; our foreign operations and international markets, such as currency exchange rates, different regulatory environments, trade barriers, exchange controls, and social and political instability; changes in the regulatory environment in which we operate, including environmental, health and safety regulations; our ability to protect and defend our intellectual property; competition; our ability to retain our management and employees; demands on management resources; global or regional catastrophic events; integrating acquisitions and achieving the expected savings and synergies; business divestitures; potential claims relating to our products; energy costs; commodity prices; labor relations; demand for and market acceptance of new and existing products; implementation of environmental remediation matters; implementation of a new operating and segment structure; and successful completion of information systems upgrades, including our enterprise system software. Many of these risks are more fully described in Kennametal's latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

Kennametal Inc. delivers productivity to customers seeking peak performance in demanding environments by providing innovative custom and standard wear-resistant solutions. This proven productivity is enabled through our advanced materials sciences and application knowledge. Our commitment to a sustainable environment provides additional value to our customers. Companies operating in everything from airframes to coal mining, from engines to oil wells and from turbochargers to construction recognize Kennametal for extraordinary contributions to their value chains. In fiscal year 2010, customers bought approximately $1.9 billion of Kennametal products and services -- delivered by our approximately 11,000 talented employees doing business in more than 60 countries -- with more than 50 percent of these revenues coming from outside North America. Visit us at www.kennametal.com. [KMT-E]

                           FINANCIAL HIGHLIGHTS

  CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


                                 Three Months
                                     Ended               Year Ended
                                   June 30,               June 30,
  (in thousands,
   except per share
   amounts)                      2010       2009        2010        2009
  -----------------              ----       ----        ----        ----

  Sales                      $538,642   $386,037  $1,884,067  $1,999,859
  Cost of goods sold          339,127    287,208   1,256,339   1,423,320
  ------------------          -------    -------   ---------   ---------

     Gross profit             199,515     98,829     627,728     576,539

  Operating expense           123,361    104,024     477,487     489,567
  Restructuring and
   asset impairment
   charges                     12,025     16,214      43,923     173,656
  Amortization of
   intangibles                  3,144      3,260      13,090      13,134
  ---------------               -----      -----      ------      ------

     Operating income
      (loss)                   60,985    (24,669)     93,228     (99,818)

  Interest expense              6,347      5,503      25,203      27,244
  Other income, net            (2,263)    (4,617)     (8,577)    (14,566)
  -----------------            ------     ------      ------     -------

     Income (loss) from
      continuing
      operations               56,901    (25,555)     76,602    (112,496)
       before income
        taxes

   Provision
    (benefit) for
    income taxes               15,951    (10,002)     26,977     (11,205)
   --------------              ------    -------      ------     -------

  Income (loss) from
   continuing
   operations                  40,950    (15,553)     49,625    (101,291)
  Loss from
   discontinued
   operations                       -    (17,174)     (1,423)    (17,340)
  -------------                   ---    -------      ------     -------

  Net income (loss)            40,950    (32,727)     48,202    (118,631)
  Less:  Net income
   attributable to                366        266       1,783       1,111
              noncontrolling
               interests          ---        ---       -----       -----
              --------------

  Net income (loss)
   attributable to
   Kennametal                 $40,584   $(32,993)    $46,419   $(119,742)
  =================           =======   ========     =======   =========

  Amounts
   Attributable to
   Kennametal Common
    Shareowners:
     Income (loss) from
      continuing
      operations              $40,584   $(15,819)    $47,842   $(102,402)
     Loss from
      discontinued
      operations                    -    (17,174)     (1,423)    (17,340)
     -------------                ---    -------      ------     -------

  Net income (loss)
   attributable to
   Kennametal                 $40,584   $(32,993)    $46,419   $(119,742)
  =================           =======   ========     =======   =========

  PER SHARE DATA
   ATTRIBUTABLE TO
    KENNAMETAL
  Basic earnings
   (loss) per share:
    Continuing
     operations                 $0.50     $(0.21)      $0.59      $(1.40)
    Discontinued
     operations                     -      (0.24)      (0.02)      (0.24)
    ------------                  ---      -----       -----       -----
                                $0.50     $(0.45)      $0.57      $(1.64)
                                =====     ======       =====      ======

  Diluted earnings
   (loss)  per
   share:
    Continuing
     operations                 $0.49     $(0.21)      $0.59      $(1.40)
    Discontinued
     operations                     -      (0.24)      (0.02)      (0.24)
    ------------                  ---      -----       -----       -----
                                $0.49     $(0.45)      $0.57      $(1.64)
                                =====     ======       =====      ======

  Dividends per
   share                        $0.12      $0.12       $0.48       $0.48
  =============                 =====      =====       =====       =====

  Basic weighted
   average shares
   outstanding                 81,598     72,772      80,966      73,122
  ===============              ======     ======      ======      ======

  Diluted weighted
   average shares
   outstanding                 82,592     72,772      81,690      73,122
  ================             ======     ======      ======      ======






  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                                                    June 30,   June 30,
  (in thousands)                                          2010       2009
  --------------                                          ----       ----

  ASSETS
  Cash and cash equivalents                           $118,129    $69,823
  Accounts receivable, net                             326,699    278,977
  Inventories                                          364,268    381,306
  Other current assets                                 106,835    145,798
  --------------------                                 -------    -------
     Total current assets                              915,931    875,904
  Property, plant and equipment, net                   664,535    720,326
  Goodwill and intangible assets, net                  644,749    677,436
  Other assets                                          42,608     73,308
     Total assets                                   $2,267,823 $2,346,974
     ============                                   ========== ==========

  LIABILITIES
  Current maturities of long-term debt and capital
   leases, including notes payable                     $22,993    $49,365
  Accounts payable                                     125,360     87,176
  Other current liabilities                            244,652    242,428
  -------------------------                            -------    -------
     Total current liabilities                         393,005    378,969
  Long-term debt and capital leases                    314,675    436,592
  Other liabilities                                    226,700    263,958
  -----------------                                    -------    -------
     Total liabilities                                 934,380  1,079,519

  KENNAMETAL SHAREOWNERS' EQUITY                     1,315,500  1,247,443
  NONCONTROLLING INTERESTS                              17,943     20,012
     Total liabilities and equity                   $2,267,823 $2,346,974
     ============================                   ========== ==========




  SEGMENT DATA (UNAUDITED)   Three Months Ended         Year Ended
                                  June 30,               June 30,
  (in thousands)               2010        2009        2010         2009
  --------------               ----        ----        ----         ----

  Outside Sales:
  Metalworking Solutions
   and Services Group      $314,796    $218,827  $1,098,845   $1,191,759
  Advanced Materials
   Solutions Group          223,846     167,210     785,222      808,100
    Total outside sales    $538,642    $386,037  $1,884,067   $1,999,859
    ===================    ========    ========  ==========   ==========

  Sales By Geographic
   Region:
  United States            $245,771    $176,751    $839,168     $907,967
  International             292,871     209,286   1,044,899    1,091,892
    Total sales by
     geographic region     $538,642    $386,037  $1,884,067   $1,999,859
    ==================     ========    ========  ==========   ==========

  Operating Income (Loss):
  Metalworking Solutions
   and Services Group       $45,176    $(29,401)    $70,191     $(19,180)
  Advanced Materials
   Solutions Group           43,327      13,536     121,178      (39,539)
  Corporate and
   eliminations (1)        (27,518)      (8,804)    (98,141)     (41,099)
    Total operating income
     (loss)                 $60,985    $(24,669)    $93,228     $(99,818)
    ======================  =======    ========     =======     ========

  (1) 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 include, where appropriate, a reconciliation of adjusted results including gross profit, operating expense, operating income, Corporate operating loss, MSSG operating income and margin, AMSG operating income and margin, income from continuing operations, net income and diluted earnings per share and free operating cash flow (which are non-GAAP financial measures), to the most directly comparable GAAP measures. For those adjustments that are presented 'net of tax', the tax effect of the adjustment can be derived by calculating the difference between the pre-tax and the post-tax adjustments presented. The tax effect on adjustments is calculated by preparing an overall tax calculation including the adjustments and then a tax calculation excluding the adjustments. The difference between these calculations results in the tax impact of the adjustments.

Management believes that investors 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. Reconciliations of all non-GAAP financial measures are set forth in the attached tables and descriptions of certain non-GAAP financial measures are contained in our report on Form 8-K to which this release is attached.

  THREE MONTHS ENDED JUNE 30, 2010 (UNAUDITED)

  (in thousands, except per
   share
  amounts)                        Gross     Operating   Operating
  --------                       Profit     Expense      Income
                                 ------     -------      ------
  2010 Reported Results          $199,515    $123,361     $60,985
     Restructuring and related
      charges                       1,219         (46)     13,290
  2010 Adjusted Results          $200,734    $123,315     $74,275
  =====================          ========    ========     =======





  (in thousands, except per
   share                          Income from
  amounts)                        Continuing       Net      Diluted
  --------                       Operations(2)  Income(2)     EPS
                                 -------------  ---------     ---
  2010 Reported Results                $40,584    $40,584      $0.49
     Restructuring and related
      charges                            9,681      9,681       0.12
  2010 Adjusted Results                $50,265    $50,265      $0.61
  =====================                =======    =======      =====




  (in thousands, except
   percents)                   Corporate      MSSG       AMSG
  ---------------------        Operating   Operating  Operating
                                 Loss        Income     Income
                                 ----        ------     ------
  2010 Reported Results          $(27,518)   $45,176     $43,327
  2010 Reported Operating
   Margin                                       14.4%       19.4%
     Restructuring and related
      charges                         255     11,836       1,199
  2010 Adjusted Results          $(27,263)   $57,012     $44,526
  =====================          ========    =======     =======
  2010 Adjusted Operating
   Margin                                       18.1%       19.9%
  =======================                       ====        ====

  (2) Represents amounts attributable to Kennametal Common Shareowners.





  THREE MONTHS ENDED JUNE 30, 2009 (UNAUDITED)

  (in thousands, except per
   share amounts)
  -------------------------        Gross   Operating   Operating
                                  Profit    Expense      Loss
                                  ------    -------      ----
  2009 Reported Results           $98,829   $104,024    $(24,669)
     Restructuring and related
      charges                       3,961       (996)     21,171
     Loss on divestiture and
      related                           -          -           -
     charges                          ---        ---         ---
     -------
  2009 Adjusted Results          $102,790   $103,028     $(3,498)
  =====================          ========   ========     =======





  (in thousands, except per
   share amounts)                   Loss from
  -------------------------        Continuing       Net      Diluted
                                  Operations(2)  Loss(2)       EPS
                                  -------------  -------       ---
  2009 Reported Results                $(15,819)  $(32,993)    $(0.45)
     Restructuring and related
      charges                             6,065      6,065       0.08
     Loss on divestiture and
      related                                 -     17,258       0.24
     charges                                ---     ------       ----
     -------
  2009 Adjusted Results                 $(9,754)   $(9,670)    $(0.13)
  =====================                 =======    =======     ======



  (in thousands, except
   percents)                   Corporate      MSSG         AMSG
  ---------------------        Operating    Operating   Operating
                                  Loss        Loss        Income
                                  ----        ----        ------
  2009 Reported Results            $(8,804)   $(29,401)   $13,536
  2009 Reported Operating
   Margin                                       (13.4%)       8.1%
     Restructuring and related
      charges                        2,945      13,614      4,612
     -------------------------       -----      ------      -----
  2009 Adjusted Results            $(5,859)   $(15,787)   $18,148
  =====================            =======    ========    =======
  2009 Adjusted Operating
   Margin                                        (7.2%)      10.9%
  =======================                       ======       ====


  YEAR ENDED JUNE 30, 2010 (UNAUDITED)

  (in thousands, except per
   share amounts)
  -------------------------        Gross    Operating   Operating
                                  Profit    Expense      Income
                                  ------    -------      ------
  2010 Reported Results          $627,728    $477,487     $93,228
     Restructuring and related
      charges                       3,832      (1,145)     48,900
     Loss on divestiture and
      related                           -           -           -
     charges                          ---         ---         ---
     -------
  2010 Adjusted Results          $631,560    $476,342    $142,128
  =====================          ========    ========    ========





  (in thousands, except per
   share amounts)                  Income from
  -------------------------        Continuing        Net      Diluted
                                  Operations(2)   Income(2)     EPS
                                  -------------   ---------     ---
  2010 Reported Results                 $47,842     $46,419      $0.57
     Restructuring and related
      charges                            42,413      42,413       0.52
     Loss on divestiture and
      related                                 -       1,340       0.01
     charges                                ---       -----       ----
     -------
  2010 Adjusted Results                 $90,255     $90,172      $1.10
  =====================                 =======     =======      =====


  YEAR ENDED JUNE 30, 2009 (UNAUDITED)

  (in thousands, except per
   share amounts)                  Gross    Operating   Operating
  -------------------------       Profit    Expense      (Loss)
                                  ------    -------      Income
                                                         ------
  2009 Reported Results          $576,539    $489,567    $(99,818)
     Restructuring and related
      charges                      10,860         182      73,292
     Asset impairment charges           -           -     111,042
     Loss on divestiture and
      related                           -           -           -
     charges                          ---         ---         ---
     -------
  2009 Adjusted Results          $587,399    $489,749     $84,516
  =====================          ========    ========     =======





  (in thousands, except per                          Net
   share amounts)                    (Loss)        (Loss)     Diluted
  -------------------------       Income from     Income(2)     EPS
                                   Continuing     ---------     ---
                                  Operations(2)
                                  -------------
  2009 Reported Results               $(102,402)  $(119,742)    $(1.64)
     Restructuring and related
      charges                            60,020      60,020       0.82
     Asset impairment charges           101,200     101,200       1.38
     Loss on divestiture and
      related                                 -      17,657       0.24
     charges                                ---      ------       ----
     -------
  2009 Adjusted Results                 $58,818     $59,135      $0.80
  =====================                 =======     =======      =====






  FREE OPERATING CASH FLOW (UNAUDITED)                Year Ended
                                                       June 30,
  (in thousands)                                     2010        2009
  --------------                                     ----        ----

  Net cash flow provided by operating activities $164,828    $192,263
  Purchases of property, plant and equipment     (56,679)    (104,842)
  Proceeds from disposals of property, plant and
   equipment                                        5,141       2,914
  ----------------------------------------------    -----       -----
     Free operating cash flow                    $113,290     $90,335
     ========================                    ========     =======

First Call Analyst:
FCMN Contact: deborah.mullen@kennametal.com

SOURCE: Kennametal Inc.

CONTACT: Investor Relations, Quynh McGuire, +1-724-539-6559, or Media
Relations, Joy Chandler, +1-724-539-4618, both of Kennametal Inc.