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COVID-19: How Kennametal is responding

Kennametal Inc. today reported fiscal 2010 third quarter earnings per diluted share (EPS) of $0.12, compared with prior year quarter reported loss per diluted share of $1.90. The current quarter reported EPS included restructuring and related charges amounting to $0.27 per share. The prior year quarter reported loss per diluted share included non-cash charges for impairment of goodwill and other intangible assets of $1.40 per share, as well as restructuring and divestiture related charges of $0.51 per share. Absent these charges, adjusted EPS for the current quarter was $0.39, compared with the prior year quarter adjusted EPS of $0.01.

"We are pleased with our results for the fiscal 2010 third quarter as they clearly demonstrate the positive effects of our strategies," said Carlos Cardoso, Kennametal's Chairman, President and Chief Executive Officer. "We are encouraged that growth in industrial activity is continuing across a range of end markets and geographies. Our global team has been disciplined in its efforts to streamline our business and lower our cost structure. The strong operating leverage reflected in our March quarter performance is consistent with our strategies to reposition Kennametal to fully maximize our growth potential."

Cardoso added, "Moving forward, we remain focused on generating strong cash flows, maintaining a solid financial position, managing our portfolio and growing our business. We will continue to further expand our profitability, which will help to differentiate Kennametal as economic conditions continue to improve."

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.

  Fiscal 2010 Third Quarter Key Developments
  --  Sales were $493 million, compared with $424 million in the same
      quarter last year. Sales increased 16 percent due to an organic
      increase of 11 percent and a 5 percent favorable impact from foreign
      currency effects.
  --  Sales improved sequentially by 11 percent, representing the third
      consecutive quarter of sequential sales growth. The improvement in
      sales was driven by continued expansion in industrial activity in the
      majority of our end markets and all geographies.
  --  The company recognized pre-tax restructuring and related charges of
      $23 million, or $0.27 per share. Total benefits from restructuring
      programs were approximately $36 million in the current quarter.
  --  Operating income was $26 million compared with an operating loss of
      $150 million in the same quarter last year.  Absent restructuring
      actions in both periods and asset impairment charges recorded in the
      prior year quarter, operating income was $49 million, compared with an
      operating loss of $6 million in the prior year quarter.  On an
      adjusted basis, operating margin reached 10 percent, driven by higher
      sales, increased capacity utilization, continued permanent savings
      from restructuring programs and ongoing cost discipline.  The current
      quarter also included the partial salary and incentive compensation
      restorations. Incremental margins were very strong on both a
      year-over-year and sequential basis. The adjusted operating income for
      the current quarter improved sequentially by $30 million from the
      December 2009 quarter.
  --  Reported EPS were $0.12 compared with prior year quarter reported loss
      per diluted share of $1.90.  Adjusted EPS was $0.39 compared with
      prior year quarter adjusted EPS of $0.01.  A reconciliation follows:


              Earnings (Loss) Per Diluted Share Reconciliation

  Third Quarter FY 2010              Third Quarter FY 2009
                                    Reported loss per diluted
  Reported EPS                $0.12  share                        $(1.90)
    Restructuring and related         Restructuring and related
     charges                   0.27    charges                      0.50
                                      Divestiture related charges   0.01
                                      Asset impairment charges      1.40
                                                                    ----
  Adjusted EPS                $0.39 Adjusted EPS                   $0.01
                              =====                                =====


  Segment Highlights for the Fiscal 2010 Third Quarter
  --  Metalworking Solutions & Services Group (MSSG) sales increased by 19
      percent from the prior year quarter, driven by organic growth of 13
      percent and favorable foreign currency effects of 6 percent. 
      Sequentially, sales increased by 12 percent as global industrial
      production continued to improve in all regions.  This represents the
      third consecutive quarter of sequential sales growth for MSSG. 
      Regionally, on an organic basis, India and Asia Pacific had sales
      increases of 64 percent and 45 percent, respectively. North America,
      Europe and Latin America each reported organic sales increases of 7
      percent compared with the prior year quarter.
  --  MSSG operating income was $31 million compared with an operating loss
      of $39 million for the same quarter of the prior year. Absent
      restructuring and related charges recorded in both periods, MSSG
      operating income was $36 million compared with an operating loss of
      $14 million in the prior year quarter.  The primary drivers of the
      increase in operating income were higher sales volumes, increased
      capacity utilization, cost savings from restructuring programs and
      continued cost containment. MSSG adjusted operating margin improved
      sequentially from the December quarter by 870 basis points from 3.6
      percent to 12.3 percent.  Compared to the December quarter, MSSG
      adjusted operating income increased $26 million on a sales increase of
      $30 million.
  --  Advanced Materials Solutions Group (AMSG) sales increased 13 percent
      from the prior year quarter, driven by 9 percent organic growth and 4
      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
      higher sales in all AMSG end markets, except for capital equipment.
  --  AMSG operating income was $25 million, compared with an operating loss
      of $103 million in the same quarter of the prior year.  Absent
      restructuring and related charges recorded in both periods and asset
      impairment charges in the prior year quarter, AMSG operating income
      was $37 million in the current quarter compared with $18 million in
      the prior year quarter. The year-over-year increase in operating
      income was primarily due to higher sales volumes, increased capacity
      utilization, cost savings from restructuring programs and continued
      cost reduction actions. AMSG adjusted operating margin increased
      sequentially by 150 basis points to 18.4 percent from 16.9 percent in
      the December quarter.

  Fiscal 2010 Year-to-Date Key Developments
  --  Sales were $1.3 billion compared to $1.6 billion in the same period
      last year. Sales decreased 20 percent on an organic basis, partially
      offset by a 2 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 restructuring and related charges of
      $36 million, or $0.40 per share. Total benefits from restructuring
      programs were approximately $98 million year-to-date.
  --  Operating income was $32 million, compared with an operating loss of
      $75 million in the same period last year.  Absent restructuring
      actions recorded in both periods and asset impairment charges recorded
      in the prior year, operating income was $68 million, compared with $88
      million for the prior year period.
  --  Reported EPS were $0.07, compared with prior year reported loss per
      diluted share of $1.18.  Adjusted EPS were $0.49, compared with prior
      year adjusted EPS of $0.94.  A reconciliation follows:


                 Earnings (Loss) Per Diluted Share Reconciliation

  First Nine Months of FY 2010          First Nine Months of FY 2009
                                       Reported loss per diluted
  Reported EPS                  $0.07  share                         $(1.18)
    Restructuring and related           Restructuring and related
     charges                     0.40    charges                       0.73
    Divestiture related charges  0.02    Divestiture related charges   0.01
                                        Asset impairment charges       1.38
  Adjusted EPS                  $0.49 Adjusted EPS                    $0.94
                                =====                                 =====


  --  Cash flow from operating activities was $93 million, compared with
      $164 million in the prior year period. Net capital expenditures were
      $26 million year-to-date.  The company generated free operating cash
      flow of $66 million compared with $73 million in the prior year
      period.

  Restructuring Actions

Kennametal's restructuring programs are 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 combined total pre-tax charges are expected to be approximately $160 million to $165 million, a slight increase from the previously announced range of $155 million to $160 million. This increase is due to recent legislative changes that retroactively extended the period for benefit coverage under COBRA to certain previously terminated employees. Total restructuring and related charges recorded inception to date were $115 million and corresponding annualized benefits were approximately $144 million.

Outlook

Management currently believes that global industrial activity and the corresponding demand for the company's products will continue to improve through the remainder of the current fiscal year. As a result of better than anticipated global sales growth, including some effects of customer inventory rebuilding, we expect our organic sales to be 37 percent to 40 percent higher in the June quarter compared with the prior year period, resulting in fiscal 2010 organic sales that would be 7 percent to 8 percent lower than last year. Under these assumed conditions, Kennametal is increasing its EPS guidance for fiscal 2010 from a range of $0.65 to $0.75 per share to a range of $1.03 to $1.08 per share, excluding restructuring actions and divestiture related charges. The increased EPS guidance also takes into consideration the final salary restoration for remaining locations and a slightly higher effective tax rate due to anticipated jurisdictional mix of earnings. Cash flow from operations is expected to be in the range of $145 million to $155 million for fiscal 2010. Based on net capital expenditures of approximately $55 million, the free operating cash flow range was increased from a range of $40 million to $50 million to a range of $90 million to $100 million for fiscal 2010.

Dividend Declared

Kennametal also announced today that its Board of Directors declared a regular quarterly cash dividend of $0.12 per share. The dividend is payable May 26, 2010 to shareowners of record as of the close of business on May 11, 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.

Third quarter 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 May 29, 2010.

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 or events. Forward looking statements in this release concern, among other things, Kennametal's outlook for earnings for its fourth quarter and full fiscal year 2010, and its expectations regarding restructuring initiatives, future growth and financial performance, all of which are based on current expectations 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, actual outcomes could vary materially from those indicated. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: the recent downturn in our industry; deepening or prolonged economic recession; restructuring and related actions (including associated costs and anticipated benefits); changes in our debt ratings; compliance with our debt arrangements; 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; availability and cost of the raw materials we use to manufacture our products; global or regional catastrophic events, including terrorist attacks or acts of war; 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; and implementation of environmental remediation matters. These and other 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 2009, customers bought approximately $2.0 billion of Kennametal products and services - delivered by our nearly 12,000 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           Nine Months Ended
                           March 31,                    March 31,
  (in thousands,
   except per
   share amounts)         2010    2009 (1)          2010    2009 (1)
  ---------------         ----     -------          ----     -------

  Sales               $493,165      $424,387  $1,345,425    $1,613,822
  Cost of goods
   sold                322,841       321,959     917,212     1,136,112
  -------------        -------       -------     -------     ---------

     Gross profit      170,324       102,428     428,213       477,710

  Operating
   expense             120,062       106,469     354,126       385,543
  Restructuring
   and asset
   impairment
   charges              20,720       142,826      31,898       157,442
  Amortization of
   intangibles           3,239         3,196       9,946         9,874
  ---------------        -----         -----       -----         -----

     Operating income
      (loss)            26,303      (150,063)     32,243       (75,149)

  Interest expense       6,531         6,658      18,856        21,741
  Other income,
   net                  (1,496)       (5,319)     (6,314)       (9,949)
  -------------         ------        ------      ------        ------

    Income (loss)
     from continuing
     operations
     before income
     taxes              21,268      (151,402)     19,701       (86,941)

  Provison
   (benefit) for
   income taxes         11,065       (14,281)     11,026        (1,203)
  --------------        ------       -------      ------        ------

  Income (loss)
   from continuing
   operations           10,203      (137,121)      8,675       (85,738)
  Loss from
   discontinued
   operations                -          (592)     (1,423)         (165)
  -------------            ---          ----      ------          ----

  Net income
   (loss)               10,203      (137,713)      7,252       (85,903)
  Less:  Net
   income
   attributable to
   noncontrolling
   interests               518           161       1,417           845
  ----------------         ---           ---       -----           ---

  Net income
   (loss)
   attributable to
   Kennametal           $9,685     $(137,874)     $5,835      $(86,748)
  ================      ======     =========      ======      ========

  Amounts
   Attributable to
   Kennametal
   Common
   Shareowners:
     Income (loss)
      from continuing
      operations        $9,685     $(137,282)     $7,258      $(86,583)
     Loss from
      discontinued
      operations             -          (592)     (1,423)         (165)
     -------------         ---          ----      ------          ----

  Net income
   (loss)
   attributable to
   Kennametal           $9,685     $(137,874)     $5,835      $(86,748)
  ================      ======     =========      ======      ========

  PER SHARE DATA
   ATTRIBUTABLE TO
    KENNAMETAL
  Basic earnings
   (loss) per
   share:
    Continuing
     operations          $0.12        $(1.89)      $0.09        $(1.18)
    Discontinued
     operations              -         (0.01)      (0.02)            -
    ------------           ---         -----       -----           ---
                         $0.12        $(1.90)      $0.07        $(1.18)
                         =====        ======       =====        ======

  Diluted earnings
   (loss) per
   share:
    Continuing
     operations          $0.12        $(1.89)      $0.09        $(1.18)
    Discontinued
     operations              -         (0.01)      (0.02)            -
    ------------           ---         -----       -----           ---
                         $0.12        $(1.90)      $0.07        $(1.18)
                         =====        ======       =====        ======

  Dividends per
   share                 $0.12         $0.12       $0.36         $0.36
  =============          =====         =====       =====         =====

  Basic weighted
   average shares
   outstanding          81,358        72,673      80,756        73,238
  ===============       ======        ======      ======        ======

  Diluted weighted
   average shares
   outstanding          82,189        72,673      81,397        73,238
  ================      ======        ======      ======        ======

   (1) Amounts have been restated to reflect discontinued operations
   related to the divestiture of the high speed steel drills and
   related products business.





  CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                                   March 31,  June 30,
  (in thousands)                                         2010       2009
  --------------                                         ----       ----

  ASSETS
  Cash and cash equivalents                          $110,893    $69,823
  Accounts receivable, net                            317,136    278,977
  Inventories                                         372,594    381,306
  Other current assets                                 93,716    145,798
  --------------------                                 ------    -------
     Total current assets                             894,339    875,904
  Property, plant and equipment, net                  681,594    720,326
  Goodwill and other intangible assets, net           662,004    677,436
  Other assets                                         73,372     73,308
     Total assets                                  $2,311,309 $2,346,974
     ============                                  ========== ==========

  LIABILITIES
  Current maturities of long-term debt and capital
   leases, including notes payable                    $18,689    $49,365
  Accounts payable                                     94,256     87,176
  Other current liabilities                           264,314    242,428
  -------------------------                           -------    -------
     Total current liabilities                        377,259    378,969
  Long-term debt and capital leases                   317,486    436,592
  Other liabilities                                   242,243    263,958
  -----------------                                   -------    -------
     Total liabilities                                936,988  1,079,519

  KENNAMETAL SHAREOWNERS' EQUITY                    1,352,932  1,247,443
  NONCONTROLLING INTERESTS                             21,389     20,012
     Total liabilities and equity                  $2,311,309 $2,346,974
     ============================                  ========== ==========






                                Three Months
  SEGMENT DATA (UNAUDITED)          Ended            Nine Months Ended
                                 March 31,               March 31,
  (in thousands)               2010   2009 (1)         2010    2009 (1)
  --------------               ----    -------         ----    -------

  Outside Sales:
  Metalworking Solutions
   and Services Group      $291,571    $245,530    $784,049     $972,932
  Advanced Materials
   Solutions Group          201,594     178,857     561,376      640,890
    Total outside sales    $493,165    $424,387  $1,345,425   $1,613,822
    ===================    ========    ========  ==========   ==========

  Sales By Geographic
   Region:
  United States            $220,340    $206,311    $593,397     $732,289
  International             272,825     218,076     752,028      881,533
    Total sales by
     geographic region     $493,165    $424,387  $1,345,425   $1,613,822
    ==================     ========    ========  ==========   ==========

  Operating Income (Loss):
  Metalworking Solutions
   and Services Group       $30,988    $(39,062)    $25,015      $10,221
  Advanced Materials
   Solutions Group           24,816    (102,502)     77,851      (53,075)
  Corporate and
   eliminations            (29,501)      (8,499)    (70,623)     (32,295)
    Total operating income
     (loss)                 $26,303   $(150,063)    $32,243     $(75,149)
    ======================  =======   =========     =======     ========

  (1) Amounts have been restated to reflect discontinued operations
  related to the divestiture of the high speed steel drills and
  related products business.



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 MARCH 31, 2010 (UNAUDITED)

  (in thousands, except        Gross    Operating    Operating
   per share amounts)         Profit     Expense       Income
  ---------------------       ------    ---------     ---------
  2010 Reported Results      $170,324    $120,062       $26,303
     Restructuring and
      related charges           1,595        (635)       22,950
     -----------------          -----        ----        ------
  2010 Adjusted Results      $171,919    $119,427       $49,253
  =====================      ========    ========       =======





  (in thousands, except         Income from
   per share amounts)           Continuing       Net Income     Diluted
  ---------------------           -----------    ----------     -------
                                Operations                        EPS
                                ----------                        ---
  2010 Reported Results               $10,203         $9,685        $0.12
     Restructuring and
      related charges                  22,329         22,329         0.27
     -----------------                 ------         ------         ----
  2010 Adjusted Results               $32,532        $32,014        $0.39
  =====================               =======        =======        =====





  (in thousands, except      Corporate
   percents)              Operating Loss      MSSG        AMSG
  ---------------------    --------------  Operating    Operating
                                             Income      Income
                                             ------      ------
  2010 Reported Results          $(29,501)     $30,988       $24,816
  2010 Reported Operating
   Margin                                         10.6%         12.3%
     Restructuring and
      related charges               5,797        4,954        12,199
     -----------------              -----        -----        ------
  2010 Adjusted Results          $(23,704)     $35,942       $37,015
  =====================          ========      =======       =======
  2010 Adjusted Operating
   Margin                                         12.3%         18.4%
  =======================                         ====          ====







   THREE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)


  (in thousands, except        Gross    Operating   Operating
   per share amounts)         Profit     Expense       Loss
  ---------------------       ------    ---------   ---------
  2009 Reported Results      $102,428    $106,469   $(150,063)
     Restructuring and
      related charges           2,249       1,145      32,888
     Divestiture related
      charges                       -           -           -
     Asset Impairment
      charges                       -           -     111,042
     ----------------             ---         ---     -------
  2009 Adjusted Results      $104,677    $107,614     $(6,133)
  =====================      ========    ========     =======






  (in thousands, except                      Net (Loss)
   per share amounts)       (Loss) Income      Income       Diluted
  ---------------------     -------------    ----------     -------
                                  from
                               Continuing                     EPS
                              -----------                     ---
                              Operations
                              ----------
  2009 Reported Results          $(137,121)   $(137,874)        $(1.90)
     Restructuring and
      related charges               36,770       36,770           0.50
     Divestiture related
      charges                            -          397           0.01
     Asset Impairment
      charges                      101,200      101,200           1.40
     ----------------              -------      -------           ----
  2009 Adjusted Results               $849         $493          $0.01
  =====================               ====         ====          =====



  THREE MONTHS ENDED MARCH 31, 2010 (UNAUDITED)

  (in thousands, except
   percents)                  Corporate        MSSG          AMSG
  ---------------------       ---------     Operating      Operating
                              Operating        Loss      (Loss) Income
                              ---------        ----      -------------
                                Loss
                                ----
  2009 Reported Results            $(8,499)    $(39,062)      $(102,502)
  2009 Reported Operating
   Margin                                        (15.9%)         (57.3%)
     Restructuring and
      related charges               (1,355)      24,779           9,464
     Asset impairment charges            -            -         111,042
     ------------------------          ---          ---         -------
  2009 Adjusted Results            $(9,854)    $(14,283)        $18,004
  =====================            =======     ========         =======
  2009 Adjusted Operating
   Margin                                         (5.8%)           10.1%
  =======================                        ======            ====





   NINE MONTHS ENDED MARCH 31, 2010 (UNAUDITED)

  (in thousands, except        Gross    Operating   Operating
   per                        Profit     Expense      Income
  share amounts)              ------    ---------   ---------
  --------------
  2010 Reported Results      $428,213    $354,126     $32,243
     Restructuring and
      related charges           2,613      (1,099)     35,610
     Divestiture related
      charges                       -           -           -
     -------------------          ---         ---         ---
  2010 Adjusted Results      $430,826    $353,027     $67,853
  =====================      ========    ========     =======





                              Income from
  (in thousands, except        Continuing       Net
   per                         Operations     Income     Diluted
  share amounts)               -----------     ------    -------
  --------------                                           EPS
                                                           ---
  2010 Reported Results             $8,675     $5,835        $0.07
     Restructuring and
      related charges               32,732     32,732         0.40
     Divestiture related
      charges                            -      1,340         0.02
     -------------------               ---      -----         ----
  2010 Adjusted Results            $41,407    $39,907        $0.49
  =====================            =======    =======        =====






   NINE MONTHS ENDED MARCH 31, 2009 (UNAUDITED)


                                                       Operating
  (in thousands, except           Gross    Operating     (Loss)
   per share amounts)            Profit     Expense      Income
  ---------------------          ------    ---------   ---------
  2009 Reported Results         $477,710    $385,543    $(75,149)
     Restructuring and
      related charges              6,899       1,178      52,121
     Divestiture related
      charges                          -           -           -

     Asset impairment charges          -           -     111,042
     ------------------------        ---         ---     -------
  2009 Adjusted Results         $484,609    $386,721     $88,014
  =====================         ========    ========     =======






  (in thousands, except                         Net (Loss)
   per share amounts)          (Loss) Income      Income      Diluted
  ---------------------        -------------    ----------    -------
                                     from
                                  Continuing
                                  Operations                    EPS
                                 -----------                    ---
  2009 Reported Results              $(85,738)    $(86,748)      $(1.18)
     Restructuring and
      related charges                  53,957       53,957         0.73
     Divestiture related
      charges                               -          397         0.01

     Asset impairment charges         101,200      101,200         1.38
     ------------------------         -------      -------         ----
  2009 Adjusted Results               $69,419      $68,806        $0.94
  =====================               =======      =======        =====






                                                Nine Months
  FREE OPERATING CASH FLOW (UNAUDITED)             Ended
                                                March 31,
  (in thousands)                                2010      2009
  --------------                                ----      ----

  Net cash flow provided by operating
   activities                                $92,637  $163,739
  Purchases of property, plant and
   equipment                                 (30,438) (92,712)
  Proceeds from disposals of property,
   plant and equipment                         4,087     2,386
  ------------------------------------         -----     -----
     Free operating cash flow                $66,286   $73,413
     ========================                =======   =======

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.