Kennametal Third-Quarter Earnings Up 3%, Despite Economic Softness; Quarterly Dividend Declared

Apr 25, 2001, 01:00 ET from Kennametal Inc.

    LATROBE, Pa., April 25 /PRNewswire/ -- Kennametal Inc. (NYSE:   KMT) today
 reported solid third-quarter earnings, despite significant weakness across
 North American industrial markets.  Kennametal's diluted earnings per share
 increased by 3 percent to $0.73 per share compared to $0.71 per share last
 year, excluding special items in each period.  On a reported basis, diluted
 earnings per share were $0.66 per share against $0.46 per share last year.
     Kennametal President and Chief Executive Officer Markos I. Tambakeras
 said, "We were very pleased to deliver even modest growth in the current
 economic environment.  We demonstrated that our unyielding focus on results
 delivers tangible benefits.  Cost-cutting programs were accelerated as we
 scaled the business for reduced demand, and gross margins were maintained
 despite top-line pressure.  More importantly, short-term responses to reduced
 demand did not compromise our continued investment in programs that will
 improve our efficiency and effectiveness in the marketplace in the future.
 The programs that we have previously detailed continue to be funded."
 
     Third-Quarter Highlights
 
     --   Excluding the unfavorable impact of foreign currency (2 percent) and
          fewer business days (2 percent), sales were flat compared to the
          prior year.  Actual sales were $464.7 million, a decrease of
          4 percent.  Relative strength in organic sales was sustained on
          significant growth in Europe and Asia, despite weakening in several
          key North American markets.
 
     --   Gross profit margin of 38.9 percent, excluding special charges, was
          essentially flat to the third quarter of fiscal 2000 despite the
          weak top-line performance.  Foreign currency reduced gross profit by
          60 basis points.  The pressure of reduced sales volume was offset by
          incremental efficiencies from lean manufacturing techniques and the
          Inventory Turns Initiative.
 
     --   Operating expense for the quarter, excluding special charges, was
          reduced 2 percent to $123.7 million.  Continuing cost reduction and
          productivity programs were augmented by early actions from the
          resizing program as detailed in the company's recent release.
          Funding of key growth initiatives continued in the quarter.
 
     --   As anticipated, the effective tax rate for the third quarter was
          39.5 percent compared to 43.3 percent last year.  The expected
          full-year tax rate remains 39.5 percent.
 
     --   Interest expense declined 9 percent during the quarter compared to
          last year due primarily to lower average borrowings.
 
     --   Excluding special items, net income was $22.3 million, an increase
          of 3 percent compared to $21.6 million last year.
 
     --   Special charges of $3.2 million, or $0.07 per share, were included
          in the quarter's results related to the J&L and FSS business
          improvement plans and the core business resize program.  Prior-year
          results included special charges of $13.3 million, or $0.25 per
          share related to operational improvement programs in the core
          businesses.
 
     --   Cash flow and balance sheet management continued to generate
          incremental benefits ahead of expectations.  Free operating cash
          flow of $34.5 million benefited from a 210-basis-point reduction in
          primary working capital versus prior year.  This reduction yielded
          primary working capital as a percent of sales of 27.9 percent.
          Total debt was $654.9 million, down from $699.2 million at the
          beginning of the year despite the unforecasted investment in a share
          repurchase program ($16.5 million), and the acquisition of JLK
          ($41.7 million).
 
     --   Sales of $1,355.9 million for the first nine months of the year were
          up 3 percent compared to last year, excluding unfavorable foreign
          currency translation effects and the impact of fewer business days,
          which affected the year by 3 and 2 percent, respectively.  Net
          income for the first nine months was $48.1 million or $1.57 per
          share compared to $43.9 million or $1.45 per share for the same
          period last year, excluding special items in each period.  Including
          special items, reported net income for the first nine months was
          $43.3 million or $1.41 per share compared to $32.3 million or
          $1.06 per share for the first nine months of last year.
 
     Outlook
     As previously announced, the company expects sales for the full year to be
 slightly down (2-3 percent), with modest earnings growth (1-3 percent) due to
 pervasive weakening in the North American industrial economy.  Diluted
 earnings per share, excluding special charges, are anticipated to be
 $2.15-$2.20 for the full year versus $2.13 in fiscal 2000.
     Tambakeras concluded, "I continue to be impressed by the organization's
 ability to rapidly adapt to shifting market conditions, as demonstrated by our
 third-quarter performance.  In response to a reduced and uncertain market
 outlook for the remainder of our fiscal year, we remain focused on mitigating
 short-term earnings impacts while still executing our long-term strategies."
 
     Dividend Announcement
     Kennametal also announced its Board of Directors declared a quarterly cash
 dividend of $0.17 cents per share, payable May 25, 2001, to holders of record
 as of May 10, 2001.
 
     Kennametal Inc. aspires to be the premier tooling solutions supplier in
 the world with operational excellence throughout the value chain and
 best-in-class manufacturing and technology.  Kennametal strives to deliver
 superior shareowner value through top-tier financial performance.  The company
 provides customers a broad range of technologically advanced tools, tooling
 systems and engineering services aimed at improving customers' manufacturing
 competitiveness.  With 13,000 employees worldwide, the company's annual sales
 are approximately $1.8 billion, with a third coming from sales outside the
 United States.  Kennametal has been named one of the Best Places to Work in
 Pennsylvania and is represented in more than 60 countries.  Kennametal
 operations in Europe are headquartered in Furth, Germany.  Kennametal Asia
 Pacific operations are headquartered in Singapore.
 
     This release contains "forward-looking statements" as defined by Section
 21E of the Securities Exchange Act of 1934 as amended.  Actual results may
 differ materially from those expressed or implied in the forward-looking
 statements.  Factors that could cause actual results to differ materially
 include, but are not limited to, the extent that global economic conditions do
 not change materially, risks associated with integrating businesses and
 restructuring programs, demands on management resources, risks associated with
 international markets such as currency exchange rates, and competition.  The
 company undertakes no obligation to publicly release any revisions to forward-
 looking statements to reflect events or circumstances occurring after the date
 hereof.
 
 
                              FINANCIAL HIGHLIGHTS
 
     Consolidated financial highlights for Kennametal Inc. (NYSE:   KMT) for the
 quarter and nine months ended March 31, 2001 and 2000 are shown in the
 following tables (in thousands, except per share amounts).  All fiscal year
 2001 data is subject to year-end (June 30) adjustment and audit by independent
 public accountants.
 
     Consolidated Statements of Income
 
                                      Quarter Ended       Nine Months Ended
                                        March 31,             March 31,
                                      2001      2000       2001        2000
 
     Net sales                      $464,650  $483,019  $1,355,876  $1,379,890
 
             Cost of goods sold      284,416   294,567     840,051     859,242
 
     Gross profit                    180,234   188,452     515,825     520,648
 
             Operating expense(A)    123,807   125,830     374,054     375,019
 
             Restructuring and
              asset impairment
              charge                   2,286    13,323       4,633      17,304
 
             Amortization of
              intangibles              6,063     6,517      18,533      20,117
 
     Operating income                 48,078    42,782     118,605     108,208
 
             Interest expense(B)      12,496    13,668      39,091      41,948
 
             Other expense, net(C)       579     1,269       3,236       1,521
 
     Income before provision for
      income taxes and
             minority interest        35,003    27,845      76,278      64,739
 
     Provision for income taxes       13,824    12,067      30,128      28,485
 
     Minority interest                   785     1,681       2,291       3,733
 
     Income before extraordinary
      loss and cumulative
      effect of change in
      accounting principle            20,394    14,097      43,859      32,521
 
     Extraordinary loss on early
      extinguishments of debt,
      net of tax                         --        --          --         (267)
 
     Cumulative effect of change in
      accounting principle,
      net of tax                         --        --         (599)        --
 
     Net income                      $20,394   $14,097     $43,260     $32,254
 
     Per Share Data:
     Diluted earnings per share        $0.66     $0.46       $1.41       $1.06
 
     Dividends per share               $0.17     $0.17       $0.51       $0.51
 
     Diluted weighted average
      shares outstanding              30,692    30,418      30,656      30,307
 
     (A)  For the quarter and nine months ended March 31, 2001, these amounts
          include charges of $0.1 million and $2.1 million, respectively,
          primarily related to the tender offer to acquire the outstanding
          shares of JLK.  For the nine months ended March 31, 2000, this amount
          includes a charge of $3.0 million for environmental remediation.
 
     (B)  Includes $0.3 million charges related to the  recognition of a
          portion of deferred financing fees as a result of the reduction in
          the availability under the company's U.S. credit facility.
 
     (C)  For the quarters ended March 31, 2001 and 2000, these amounts include
          charges of $1.5 million and $1.3 million, respectively, for fees
          incurred in connection with the company's accounts receivable
          securitization program.  For the nine months ended March 31, 2001 and
          2000, these amounts include similar charges of $4.7 million and $3.7
          million, respectively.  For the nine months ended March 31, 2000,
          this amount includes one-time gains of $1.4 million from the sales of
          underutilized assets.
 
                                Supplemental Data Sheet
 
     SELECTED OPERATING DATA:
 
                                      Quarter Ended       Nine Months Ended
                                        March 31,             March 31,
                                      2001    2000(A)      2001      2000(A)
     Sales:
     Metalworking Services and
      Solutions Group               $257,747  $265,878    $748,628    $761,492
     Advanced Materials Solutions
      Group                           91,095    85,814     261,487     253,550
     J&L Industrial Supply            77,646    96,215     242,457     270,958
     Full Service Supply              38,162    35,112     103,304      93,890
     Total                          $464,650  $483,019  $1,355,876  $1,379,890
 
     Sales By Geographic Region:
     Within the United States       $299,545  $321,945    $895,015    $914,727
     International                   165,105   161,074     460,861     465,163
     Total                          $464,650  $483,019  $1,355,876  $1,379,890
 
     Operating Income (Loss),
      including special charges:
     Metalworking Services and
      Solutions Group                $37,369   $34,658     $96,305     $89,964
     Advanced Materials Solutions
      Group                           12,184     8,001      32,106      26,565
     J&L Industrial Supply             2,663     7,060       4,488      16,479
     Full Service Supply               2,017     3,303       5,096       7,952
     Corporate and Eliminations       (6,155)  (10,240)    (19,390)    (32,752)
     Total                           $48,078   $42,782    $118,605    $108,208
 
     Operating Income (Loss),
      excluding special charges:
     Metalworking Services and
      Solutions Group                $38,380   $42,373     $97,320    $101,198
     Advanced Materials Solutions
      Group                           11,920    12,376      31,868      31,311
     J&L Industrial Supply             4,576     7,060      10,580      16,479
     Full Service Supply               2,187     3,303       5,416       7,952
     Corporate and Eliminations       (6,155)   (9,007)    (19,409)    (28,328)
     Total                           $50,908   $56,105    $125,775    $128,612
 
     Diluted EPS excluding special
      charges and
        amortization expense           $0.92     $0.92       $2.17       $2.11
 
     Diluted EPS excluding special
      charges                          $0.73     $0.71       $1.57       $1.45
 
     Free Operating Cash Flow:
     Net Income                      $20,394   $14,097     $43,260     $32,254
     Non-cash Items                    4,774     7,062       6,766      13,543
     Depreciation & Amortization      24,375    25,165      73,440      76,450
     Change in Working Capital         2,118    22,376      32,277      70,093
     Capital Expenditures            (17,141)  (12,447)    (40,121)    (34,123)
     Free Operating Cash Flow        $34,520   $56,253    $115,622    $158,217
 
                           Supplemental Data Sheet (Continued)
 
     SELECTED BALANCE SHEET DATA:
                                                    Quarter Ended
                                        3/31/01   12/31/00  9/30/00   6/30/00
 
     Accounts Receivable                $214,332  $203,344  $218,863  $231,917
     Inventory                           387,520   389,460   392,741   410,885
     Accounts Payable                   (108,371) (102,217) (111,873) (118,908)
     Total Primary Working Capital
      (PWC)                             $493,481  $490,587  $499,731  $523,894
     PWC % Sales(B)                        27.9%     28.0%     28.5%     29.4%
     Debt                               $654,930  $687,487  $672,593  $699,242
     Debt/Total Capital                    45.1%     46.7%     44.7%     45.6%
 
 
     (A) Kennametal reports global business units consisting of Metalworking
         Services and Solutions Group, Advanced Materials Solutions Group, Full
         Service Supply and J&L Industrial Supply, and corporate functional
         shared services.  Certain amounts in prior year sales and operating
         income (loss) have been restated to conform to this reporting
         structure.
 
     (B) Calculated by averaging the current and the previous four quarter-end
         balances for PWC, divided by sales for the most recent 12-month
         period.
 
                     MAKE YOUR OPINION COUNT -  Click Here
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SOURCE Kennametal Inc.
    LATROBE, Pa., April 25 /PRNewswire/ -- Kennametal Inc. (NYSE:   KMT) today
 reported solid third-quarter earnings, despite significant weakness across
 North American industrial markets.  Kennametal's diluted earnings per share
 increased by 3 percent to $0.73 per share compared to $0.71 per share last
 year, excluding special items in each period.  On a reported basis, diluted
 earnings per share were $0.66 per share against $0.46 per share last year.
     Kennametal President and Chief Executive Officer Markos I. Tambakeras
 said, "We were very pleased to deliver even modest growth in the current
 economic environment.  We demonstrated that our unyielding focus on results
 delivers tangible benefits.  Cost-cutting programs were accelerated as we
 scaled the business for reduced demand, and gross margins were maintained
 despite top-line pressure.  More importantly, short-term responses to reduced
 demand did not compromise our continued investment in programs that will
 improve our efficiency and effectiveness in the marketplace in the future.
 The programs that we have previously detailed continue to be funded."
 
     Third-Quarter Highlights
 
     --   Excluding the unfavorable impact of foreign currency (2 percent) and
          fewer business days (2 percent), sales were flat compared to the
          prior year.  Actual sales were $464.7 million, a decrease of
          4 percent.  Relative strength in organic sales was sustained on
          significant growth in Europe and Asia, despite weakening in several
          key North American markets.
 
     --   Gross profit margin of 38.9 percent, excluding special charges, was
          essentially flat to the third quarter of fiscal 2000 despite the
          weak top-line performance.  Foreign currency reduced gross profit by
          60 basis points.  The pressure of reduced sales volume was offset by
          incremental efficiencies from lean manufacturing techniques and the
          Inventory Turns Initiative.
 
     --   Operating expense for the quarter, excluding special charges, was
          reduced 2 percent to $123.7 million.  Continuing cost reduction and
          productivity programs were augmented by early actions from the
          resizing program as detailed in the company's recent release.
          Funding of key growth initiatives continued in the quarter.
 
     --   As anticipated, the effective tax rate for the third quarter was
          39.5 percent compared to 43.3 percent last year.  The expected
          full-year tax rate remains 39.5 percent.
 
     --   Interest expense declined 9 percent during the quarter compared to
          last year due primarily to lower average borrowings.
 
     --   Excluding special items, net income was $22.3 million, an increase
          of 3 percent compared to $21.6 million last year.
 
     --   Special charges of $3.2 million, or $0.07 per share, were included
          in the quarter's results related to the J&L and FSS business
          improvement plans and the core business resize program.  Prior-year
          results included special charges of $13.3 million, or $0.25 per
          share related to operational improvement programs in the core
          businesses.
 
     --   Cash flow and balance sheet management continued to generate
          incremental benefits ahead of expectations.  Free operating cash
          flow of $34.5 million benefited from a 210-basis-point reduction in
          primary working capital versus prior year.  This reduction yielded
          primary working capital as a percent of sales of 27.9 percent.
          Total debt was $654.9 million, down from $699.2 million at the
          beginning of the year despite the unforecasted investment in a share
          repurchase program ($16.5 million), and the acquisition of JLK
          ($41.7 million).
 
     --   Sales of $1,355.9 million for the first nine months of the year were
          up 3 percent compared to last year, excluding unfavorable foreign
          currency translation effects and the impact of fewer business days,
          which affected the year by 3 and 2 percent, respectively.  Net
          income for the first nine months was $48.1 million or $1.57 per
          share compared to $43.9 million or $1.45 per share for the same
          period last year, excluding special items in each period.  Including
          special items, reported net income for the first nine months was
          $43.3 million or $1.41 per share compared to $32.3 million or
          $1.06 per share for the first nine months of last year.
 
     Outlook
     As previously announced, the company expects sales for the full year to be
 slightly down (2-3 percent), with modest earnings growth (1-3 percent) due to
 pervasive weakening in the North American industrial economy.  Diluted
 earnings per share, excluding special charges, are anticipated to be
 $2.15-$2.20 for the full year versus $2.13 in fiscal 2000.
     Tambakeras concluded, "I continue to be impressed by the organization's
 ability to rapidly adapt to shifting market conditions, as demonstrated by our
 third-quarter performance.  In response to a reduced and uncertain market
 outlook for the remainder of our fiscal year, we remain focused on mitigating
 short-term earnings impacts while still executing our long-term strategies."
 
     Dividend Announcement
     Kennametal also announced its Board of Directors declared a quarterly cash
 dividend of $0.17 cents per share, payable May 25, 2001, to holders of record
 as of May 10, 2001.
 
     Kennametal Inc. aspires to be the premier tooling solutions supplier in
 the world with operational excellence throughout the value chain and
 best-in-class manufacturing and technology.  Kennametal strives to deliver
 superior shareowner value through top-tier financial performance.  The company
 provides customers a broad range of technologically advanced tools, tooling
 systems and engineering services aimed at improving customers' manufacturing
 competitiveness.  With 13,000 employees worldwide, the company's annual sales
 are approximately $1.8 billion, with a third coming from sales outside the
 United States.  Kennametal has been named one of the Best Places to Work in
 Pennsylvania and is represented in more than 60 countries.  Kennametal
 operations in Europe are headquartered in Furth, Germany.  Kennametal Asia
 Pacific operations are headquartered in Singapore.
 
     This release contains "forward-looking statements" as defined by Section
 21E of the Securities Exchange Act of 1934 as amended.  Actual results may
 differ materially from those expressed or implied in the forward-looking
 statements.  Factors that could cause actual results to differ materially
 include, but are not limited to, the extent that global economic conditions do
 not change materially, risks associated with integrating businesses and
 restructuring programs, demands on management resources, risks associated with
 international markets such as currency exchange rates, and competition.  The
 company undertakes no obligation to publicly release any revisions to forward-
 looking statements to reflect events or circumstances occurring after the date
 hereof.
 
 
                              FINANCIAL HIGHLIGHTS
 
     Consolidated financial highlights for Kennametal Inc. (NYSE:   KMT) for the
 quarter and nine months ended March 31, 2001 and 2000 are shown in the
 following tables (in thousands, except per share amounts).  All fiscal year
 2001 data is subject to year-end (June 30) adjustment and audit by independent
 public accountants.
 
     Consolidated Statements of Income
 
                                      Quarter Ended       Nine Months Ended
                                        March 31,             March 31,
                                      2001      2000       2001        2000
 
     Net sales                      $464,650  $483,019  $1,355,876  $1,379,890
 
             Cost of goods sold      284,416   294,567     840,051     859,242
 
     Gross profit                    180,234   188,452     515,825     520,648
 
             Operating expense(A)    123,807   125,830     374,054     375,019
 
             Restructuring and
              asset impairment
              charge                   2,286    13,323       4,633      17,304
 
             Amortization of
              intangibles              6,063     6,517      18,533      20,117
 
     Operating income                 48,078    42,782     118,605     108,208
 
             Interest expense(B)      12,496    13,668      39,091      41,948
 
             Other expense, net(C)       579     1,269       3,236       1,521
 
     Income before provision for
      income taxes and
             minority interest        35,003    27,845      76,278      64,739
 
     Provision for income taxes       13,824    12,067      30,128      28,485
 
     Minority interest                   785     1,681       2,291       3,733
 
     Income before extraordinary
      loss and cumulative
      effect of change in
      accounting principle            20,394    14,097      43,859      32,521
 
     Extraordinary loss on early
      extinguishments of debt,
      net of tax                         --        --          --         (267)
 
     Cumulative effect of change in
      accounting principle,
      net of tax                         --        --         (599)        --
 
     Net income                      $20,394   $14,097     $43,260     $32,254
 
     Per Share Data:
     Diluted earnings per share        $0.66     $0.46       $1.41       $1.06
 
     Dividends per share               $0.17     $0.17       $0.51       $0.51
 
     Diluted weighted average
      shares outstanding              30,692    30,418      30,656      30,307
 
     (A)  For the quarter and nine months ended March 31, 2001, these amounts
          include charges of $0.1 million and $2.1 million, respectively,
          primarily related to the tender offer to acquire the outstanding
          shares of JLK.  For the nine months ended March 31, 2000, this amount
          includes a charge of $3.0 million for environmental remediation.
 
     (B)  Includes $0.3 million charges related to the  recognition of a
          portion of deferred financing fees as a result of the reduction in
          the availability under the company's U.S. credit facility.
 
     (C)  For the quarters ended March 31, 2001 and 2000, these amounts include
          charges of $1.5 million and $1.3 million, respectively, for fees
          incurred in connection with the company's accounts receivable
          securitization program.  For the nine months ended March 31, 2001 and
          2000, these amounts include similar charges of $4.7 million and $3.7
          million, respectively.  For the nine months ended March 31, 2000,
          this amount includes one-time gains of $1.4 million from the sales of
          underutilized assets.
 
                                Supplemental Data Sheet
 
     SELECTED OPERATING DATA:
 
                                      Quarter Ended       Nine Months Ended
                                        March 31,             March 31,
                                      2001    2000(A)      2001      2000(A)
     Sales:
     Metalworking Services and
      Solutions Group               $257,747  $265,878    $748,628    $761,492
     Advanced Materials Solutions
      Group                           91,095    85,814     261,487     253,550
     J&L Industrial Supply            77,646    96,215     242,457     270,958
     Full Service Supply              38,162    35,112     103,304      93,890
     Total                          $464,650  $483,019  $1,355,876  $1,379,890
 
     Sales By Geographic Region:
     Within the United States       $299,545  $321,945    $895,015    $914,727
     International                   165,105   161,074     460,861     465,163
     Total                          $464,650  $483,019  $1,355,876  $1,379,890
 
     Operating Income (Loss),
      including special charges:
     Metalworking Services and
      Solutions Group                $37,369   $34,658     $96,305     $89,964
     Advanced Materials Solutions
      Group                           12,184     8,001      32,106      26,565
     J&L Industrial Supply             2,663     7,060       4,488      16,479
     Full Service Supply               2,017     3,303       5,096       7,952
     Corporate and Eliminations       (6,155)  (10,240)    (19,390)    (32,752)
     Total                           $48,078   $42,782    $118,605    $108,208
 
     Operating Income (Loss),
      excluding special charges:
     Metalworking Services and
      Solutions Group                $38,380   $42,373     $97,320    $101,198
     Advanced Materials Solutions
      Group                           11,920    12,376      31,868      31,311
     J&L Industrial Supply             4,576     7,060      10,580      16,479
     Full Service Supply               2,187     3,303       5,416       7,952
     Corporate and Eliminations       (6,155)   (9,007)    (19,409)    (28,328)
     Total                           $50,908   $56,105    $125,775    $128,612
 
     Diluted EPS excluding special
      charges and
        amortization expense           $0.92     $0.92       $2.17       $2.11
 
     Diluted EPS excluding special
      charges                          $0.73     $0.71       $1.57       $1.45
 
     Free Operating Cash Flow:
     Net Income                      $20,394   $14,097     $43,260     $32,254
     Non-cash Items                    4,774     7,062       6,766      13,543
     Depreciation & Amortization      24,375    25,165      73,440      76,450
     Change in Working Capital         2,118    22,376      32,277      70,093
     Capital Expenditures            (17,141)  (12,447)    (40,121)    (34,123)
     Free Operating Cash Flow        $34,520   $56,253    $115,622    $158,217
 
                           Supplemental Data Sheet (Continued)
 
     SELECTED BALANCE SHEET DATA:
                                                    Quarter Ended
                                        3/31/01   12/31/00  9/30/00   6/30/00
 
     Accounts Receivable                $214,332  $203,344  $218,863  $231,917
     Inventory                           387,520   389,460   392,741   410,885
     Accounts Payable                   (108,371) (102,217) (111,873) (118,908)
     Total Primary Working Capital
      (PWC)                             $493,481  $490,587  $499,731  $523,894
     PWC % Sales(B)                        27.9%     28.0%     28.5%     29.4%
     Debt                               $654,930  $687,487  $672,593  $699,242
     Debt/Total Capital                    45.1%     46.7%     44.7%     45.6%
 
 
     (A) Kennametal reports global business units consisting of Metalworking
         Services and Solutions Group, Advanced Materials Solutions Group, Full
         Service Supply and J&L Industrial Supply, and corporate functional
         shared services.  Certain amounts in prior year sales and operating
         income (loss) have been restated to conform to this reporting
         structure.
 
     (B) Calculated by averaging the current and the previous four quarter-end
         balances for PWC, divided by sales for the most recent 12-month
         period.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X66065408
 
 SOURCE  Kennametal Inc.