EX-99.1

Exhibit 99.1


		FROM:		KENNAMETAL INC. P.O. Box 231 Latrobe, PA 15650 724-539-5000
				Investor Relations 724-539-6141

				Media Relations Contact: Joy Chandler 724-539-4618

		DATE:		July 27, 2005

		FOR RELEASE:		Immediate

KENNAMETAL REPORTS RECORD FOURTH QUARTER AND FULL YEAR 2005 RESULTS

			- Q4 05 sales up 14 percent, earnings per diluted share (EPS) of $.98, up 21 percent

			- Full Year sales up 17 percent, adjusted EPS of $3.25, up 51 percent

LATROBE, Pa., July 27, 2005 — Kennametal Inc. (NYSE: KMT) today reported fiscal 2005 fourth quarter EPS at a record level of $0.98 compared with prior year EPS of $0.81 and original guidance of $0.90 to $0.95. There were no special items in either quarter.

For fiscal 2005, adjusted EPS were $3.25, also a record, compared with prior year adjusted EPS of $2.15. Reported EPS for the year were $3.13 and included special items totaling $0.12 related to the FSS divestiture in the third quarter. Prior year reported EPS were $2.02 and included special items totaling $0.13.

Sales for the fourth quarter were $619 million compared with prior year sales of $542 million. Full year sales were $2.3 billion compared with $2.0 billion last year. Both the quarter and full year sales figures were record levels for the Company.

Kennametal Chairman, President and Chief Executive Officer, Markos I. Tambakeras, said, “Each of our three business groups, Metalworking Solutions and Services, Advanced Materials Solutions, and J&L Industrial Supply performed at record levels in both sales and earnings. Market penetration, pricing and the underlying strength of our served end markets all contributed to our performance.”

“Kennametal’s results in FY05 are a function of the successful implementation of our transformation strategy that is rapidly expanding our advanced materials and engineered components portfolio, balancing the mix of our end market sales and further enhancing our value-based selling proposition with our customers. Despite difficult headwinds from rising raw material prices, Kennametal’s team worked hard to generate EPS growth of over 50% for the year; on top of 52% growth in the previous fiscal year.”

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Highlights of the Fiscal 2005 Fourth Quarter

•		Sales of $619 million were up 14 percent versus the same quarter last year, including 11 percent organic sales growth, 2 percent benefit from foreign currency exchange and 4 percent from acquisitions offset by 3 percent from the FSS divestiture.

•		Net income was $38 million versus $30 million, up 26 percent.

•		Adjusted Return on Invested Capital improved 260 basis points to 9.6 percent versus 7.0 percent in the prior year.

•		Completed the divestiture of FSS, a distribution business that primarily addressed the North American Automotive market, for a selling price of $39 million, subject to customary post-closing adjustments.

Highlights of Fiscal 2005

•

Sales of $2.3 billion were up 17 percent on 13 percent organic sales growth, 3 percent benefit from foreign currency exchange and 2 percent from acquisitions offset by 1 percent from the FSS divestiture.

•

Net income was $119 million versus $74 million last year, up 62 percent.

•

Acquired Extrude Hone, for approximately $134 million, net of acquired cash and direct acquisition costs, adding to our AMSG segment.

•

Cash flow from operations was $202 million, free operating cash flow for the year was $118 million.

•

Debt to capital decreased to 31 percent versus 33 percent at the end of the prior year.

Outlook

Economic indicators project continued growth through fiscal 2006 in North America and the rest-of-the world markets, and flat to modest growth in European markets. Kennametal expects to see organic revenue growth in the 7% to 10% range, two to three the underlying growth rates of its addressed markets.

Tambakeras said, “We were delighted with our performance in fiscal 2005, and the outlook for our end markets in 2006 remains good. The major challenge in FY 2006 revolves around raw material costs, especially tungsten; but we remain confident in our ability to continue to realize pricing. Although there is near term uncertainty from these raw material cost increases, over the long-term, the industry should be establishing new higher overall levels of pricing commensurate with the underlying economic benefits of its products.”

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Reported EPS are expected to be in the $3.30 to $3.80 range for FY 2006; including an approximately $0.25 negative impact from expensing options due to SFAS 123R and the effects of the reduction in the discount rates applied to our pension plans. About 65% of the 06 EPS will be realized in the second half of the fiscal year, consistent with the Company’s historical seasonal pattern. First quarter EPS are forecasted to be $0.40 to $0.50, also consistent with our seasonal pattern and additionally reflects the impact of raw material cost increases which will be highest in the first quarter.

Operating margins and ROIC should again improve this year as we stay on track to reach our stated goal of 12% for each by fiscal 2007.

Kennametal anticipates net cash flow provided by operating activities of approximately $200 to $220 million for fiscal 2006. Purchases of property, plant and equipment, net of proceeds from disposals of property, plant and equipment are expected to be approximately $80 million. Adjusting net cash flow provided by operating activities for the above item, Kennametal expects to generate between $120 and $140 million of free operating cash flow for fiscal 2006.

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

Share Repurchase Program

Kennametal announced today that its Board of Directors reaffirmed its previously authorized share repurchase program of up to 1.8 million shares of the Company’s common stock. The program will be used principally to dampen the impact of share dilution from equity issued under employee benefit programs. The Company intends to repurchase shares from time to time in open market transactions or in privately negotiated transactions at the Company’s discretion, in accordance with the Board of Director’s authorization and subject to applicable SEC regulations, market conditions and other factors.

Dividend Declared

Kennametal also announced its Board of Directors approved an increase of $.02 in the quarterly cash dividend to $0.19 per share, payable August 24, 2005, to shareowners of record as of the close of business on August 9, 2005. This increase of nearly 12% reflects management’s confidence in continued strong cash generation and is consistent with Kennametal’s stated cash deployment priorities.

Fourth quarter and full year results will be discussed in a live Internet broadcast at 10:00 a.m. (Eastern) today. Access the live or archived conference by visiting the Investor Relations section of Kennametal’s corporate web site at www.kennametal.com.

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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. You can identify these forward-looking statements by the fact they use words such as “should,” “anticipate,” “estimate,” “approximate,” “expect,” “may,” “will,” “project,” “intend,” “plan,” “believe,” and others words of similar meaning and expression in connection with any discussion of future operating or financial performance. One can also identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements are likely to relate to, among other things, our goals, plans and projections regarding our financial position, results of operations, market position and product development, which are based on current expectations that involve inherent risks and uncertainties, including factors that could delay, divert or change any of them in the next several years. Although it is not possible to predict or identify all factors, they may include the following: global economic conditions; future terrorist attacks; epidemics; risks associated with integrating and divesting businesses and achieving the expected savings and synergies; demands on management resources; risks associated with international markets such as currency exchange rates, and social and political environments; competition; labor relations; commodity prices; demand for and market acceptance of new and existing products; and risks associated with the implementation of restructuring plans and environmental remediation matters. We can give no assurance that any goal or plan set forth in forward-looking statements can be achieved and readers are cautioned not to place undue reliance on such statements, which speak only as of the date made. We undertake no obligation to release publicly any revisions to forward-looking statements as a result of future events or developments.

Kennametal Inc. (NYSE:KMT) is a leading global supplier of tooling, engineered components and advanced materials consumed in production processes. The Company improves customers’ competitiveness by providing superior economic returns through the delivery of application knowledge and advanced technology to master the toughest of materials application demands. Companies producing everything from airframes to coal, from medical implants to oil wells and from turbochargers to motorcycle parts recognize Kennametal for extraordinary contributions to their value chains. Customers buy over $2 billion annually of Kennametal products and services—delivered by our 14,000 talented employees in over 60 countries—with almost 50 percent of these revenues coming from outside the United States. Visit us at www.kennametal.com. KMT-E

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FINANCIAL HIGHLIGHTS

Consolidated Statements of Income (Unaudited)


	Quarter Ended						Twelve Months Ended
(in thousands, except per share amounts)	June 30,						June 30,
	2005			2004			2005			2004
Sales	$	619,158		$	541,858		$	2,304,167		$	1,971,441

Cost of goods sold ⁽¹⁾		394,695			356,084			1,513,634			1,318,074


Gross profit		224,463			185,774			790,533			653,367

Operating expense ⁽²⁾		156,065			134,441			574,495			512,621

Restructuring and asset impairment charges ⁽³⁾		—			—			4,707			3,670

Amortization of intangibles		1,566			664			3,460			2,234


Operating income		66,832			50,669			207,871			134,842

Interest expense		7,897			6,405			27,277			25,884

Other expense (income), net ⁽⁴⁾		(897	)		294			(3,683	)		(1,716	)


Income before provision for income taxes and minority interest		59,832			43,970			184,277			110,674

Provision for income taxes		21,854			14,154			61,394			35,500

Minority interest		238			(36	)		3,592			1,596


Net income	$	37,740		$	29,852		$	119,291		$	73,578


Basic earnings per share	$	1.01		$	0.83		$	3.23		$	2.06


Diluted earnings per share	$	0.98		$	0.81		$	3.13		$	2.02


Dividends per share	$	0.17		$	0.17		$	0.68		$	0.68


Basic weighted average shares outstanding		37,510			36,051			36,924			35,704


Diluted weighted average shares outstanding		38,477			36,952			38,056			36,473


1)		For the twelve months ended June 30, 2004, these amounts include charges of $0.1 million for integration activities related to the Widia acquisition, $2.9 million related to restructuring programs, and $0.8 million for a pension curtailment.

2)		For the twelve months ended June 30, 2005, these amounts include a loss on assets held for sale of $1.5 million. For the twelve months ended June 30, 2004, these amounts include charges of $1.4 million for integration activities related to the Widia acquisition, $1.8 million related to a reserve for a note receivable from a divestiture of a business by Kennametal in 2002, and $0.5 million related to a pension curtailment.

3)		For the twelve months ended June 30, 2005, these amounts include $4.7 million related to a FSS goodwill impairment charge. For the twelve months ended June 30, 2004, these amounts include $3.7 million related to restructuring programs.

4)		For the twelve months ended June 30, 2004, these amounts include income of $4.4 million related to a gain on the sale of Toshiba Tungaloy investment and a charge of $0.2 million on a reserve for a note receivable from a divestiture of a business by Kennametal in 2002.

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FINANCIAL HIGHLIGHTS (Continued)

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

For the quarters ended June 30, 2005 and 2004, there were no special items.

RECONCILIATION TO GAAP – TWELVE MONTHS ENDED JUNE 30 (Unaudited)


	Net
	Income		EPS
2005 Reported	$	119,291	$	3.13
FSS goodwill impairment charge		3,277		0.09
Loss on assets held for sale		1,076		0.03

2005 Adjusted, excluding special items	$	123,644	$	3.25

Reported EPS of $3.13 is up 55 percent from reported EPS of $2.02 for prior year. Adjusted EPS of $3.25 is up 51 percent from adjusted EPS of $2.15 for prior year.


	Net
	Income			EPS
2004 Reported	$	73,578		$	2.02
MSSG restructuring		3,416			0.09
AMSG restructuring		1,018			0.03
Widia integration costs — MSSG		1,027			0.03
Widia integration costs — AMSG		33			—
Pension curtailment		883			0.02
Gain on Toshiba investment		(2,990	)		(0.08	)
Note receivable		1,360			0.04

2004 Adjusted, excluding special items	$	78,325		$	2.15

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FINANCIAL HIGHLIGHTS (Continued)

SEGMENT DATA (Unaudited):


	Quarter Ended						Twelve Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Outside Sales:
Metalworking Solutions and Services Group	$	369,297		$	326,377		$	1,378,594		$	1,198,505
Advanced Materials Solutions Group		171,165			119,227			546,838			419,073
J&L Industrial Supply		66,031			59,741			255,840			218,295
Full Service Supply		12,665			36,513			122,895			135,568

Total Outside Sales	$	619,158		$	541,858		$	2,304,167		$	1,971,441


Sales By Geographic Region:
Within the United States	$	334,524		$	307,319		$	1,261,315		$	1,098,470
International		284,634			234,539			1,042,852			872,971

Total Sales by Geographic Region	$	619,158		$	541,858		$	2,304,167		$	1,971,441


Operating Income (Loss):
Metalworking Solutions and Services Group	$	52,260		$	43,720		$	187,410		$	126,657
Advanced Materials Solutions Group		30,319			16,793			80,932			53,168
J&L Industrial Supply		7,592			6,137			27,094			19,547
Full Service Supply		265			882			(4,105	)		818
Corporate and eliminations ⁽¹⁾		(23,604	)		(16,863	)		(83,460	)		(65,348	)

Total Operating Income, as reported	$	66,832		$	50,669		$	207,871		$	134,842


(1)		Includes corporate functional shared services and intercompany eliminations.

RECONCILIATION TO FREE OPERATING CASH FLOW INFORMATION (Unaudited) :


	Quarter Ended						Twelve Months Ended
	June 30,						June 30,
	2005			2004			2005			2004
Net income	$	37,740		$	29,852		$	119,291		$	73,578
Other non-cash items		22,483			(1,498	)		39,048			13,959
Depreciation and amortization		18,344			17,236			66,884			65,989
Change in inventory		13,035			(3,213	)		(8,446	)		10,255
Change in accounts receivable		(38,994	)		(986	)		(53,768	)		(4,199	)
Change in accounts payable		12,006			16,696			12,997			25,776
Change in other assets and liabilities		(12,018	)		10,305			26,321			(7,500	)

Net cash flow provided by operating activities		52,596			68,392			202,327			177,858

Purchase of property, plant and equipment		(31,260	)		(20,902	)		(88,552	)		(56,962	)
Proceeds from disposals of property, plant and equipment		—			1,227			3,912			4,225

Free operating cash flow	$	21,336		$	48,717		$	117,687		$	125,121

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FINANCIAL HIGHLIGHTS (Continued)

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) :


	06/30/05			03/31/05			12/31/04			09/30/04			06/30/04
ASSETS
Cash and equivalents	$	43,220		$	34,792		$	32,168		$	28,688		$	25,940
Trade receivables, net of allowance		403,097			382,188			367,940			369,008			364,725
Receivables securitized		(109,786	)		(120,749	)		(115,253	)		(115,309	)		(117,480	)

Accounts receivable, net		293,311			261,439			252,687			253,699			247,245
Inventories		386,674			408,713			421,183			404,478			388,077
Deferred income taxes		70,391			98,063			99,731			96,144			95,240
Current assets held for sale		—			50,469			—			—			—
Other current assets		37,466			32,353			39,605			37,178			40,443

Total current assets		831,062			885,829			845,374			820,187			796,945
Property, plant and equipment, net		519,301			512,806			506,253			487,616			484,475
Goodwill and intangible assets, net		652,791			661,908			543,062			546,487			542,014
Assets held for sale		—			2,715			—			—			—
Other assets		141,297			135,873			133,451			115,733			115,229

Total	$	2,144,451		$	2,199,131		$	2,028,140		$	1,970,023		$	1,938,663


LIABILITIES
Short-term debt, including notes payable	$	50,889		$	56,225		$	28,888		$	116,446		$	126,807
Accounts payable		154,839			142,268			142,465			146,543			148,216
Current liabilities held for sale		—			14,437			—			—			—
Accrued liabilities		222,930			245,534			226,568			217,636			211,504

Total current liabilities		428,658			458,464			397,921			480,625			486,527
Long-term debt		386,485			428,943			376,268			318,989			313,400
Deferred income taxes		59,551			91,088			56,340			65,973			67,426
Other liabilities		279,435			179,786			174,855			162,627			167,926

Total liabilities		1,154,129			1,158,281			1,005,384			1,028,214			1,035,279

MINORITY INTEREST		17,460			19,664			19,249			17,377			16,232

SHAREOWNERS’ EQUITY		972,862			1,021,186			1,003,507			924,432			887,152


Total	$	2,144,451		$	2,199,131		$	2,028,140		$	1,970,023		$	1,938,663

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FINANCIAL HIGHLIGHTS (Continued)

Debt to Capital Reconciliation (Unaudited):


	June 30,
		2005			2004
Total debt	$	437,374		$	440,207
Total shareowners’ equity		972,862			887,152


Debt to equity, GAAP		45.0	%		49.6	%

Total debt	$	437,374		$	440,207
Minority interest		17,460			16,232
Total shareowners’ equity		972,862			887,152


Total capital	$	1,427,696		$	1,343,591

Debt to Capital		30.6	%		32.8	%

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FINANCIAL HIGHLIGHTS (Continued)

RETURN ON INVESTED CAPITAL (Unaudited):

For the Period Ended June 30, 2005


	6/30/2005		3/31/2005		12/31/2004		9/30/2004		6/30/2004		Average
Invested Capital
Debt	$	437,374	$	485,168	$	405,156	$	435,435	$	440,207	$	440,668
Accounts receivable securitized		109,786		120,749		115,253		115,309		117,480		115,715
Minority interest		17,460		19,664		19,249		17,377		16,232		17,996
Shareowners’ equity		972,862		1,021,186		1,003,507		924,432		887,152		961,828

Total	$	1,537,482	$	1,646,767	$	1,543,165	$	1,492,553	$	1,461,071	$	1,536,207


	Quarter Ended
	6/30/2005		3/31/2005		12/31/2004		9/30/2004		Total
Interest Expense
Interest expense	$	7,897	$	6,803	$	6,121	$	6,456	$	27,277
Securitization interest		981		868		757		580		3,186

Total interest expense	$	8,878	$	7,671	$	6,878	$	7,036	$	30,463

Income tax benefit										10,175

Total Interest Expense, net of tax									$	20,288


					Quarter Ended
	6/30/2005		3/31/2005		12/31/2004		9/30/2004		Total
Total Income
Net Income, as reported	$	37,740	$	30,650	$	28,181	$	22,720	$	119,291

Restructuring and asset impairment charges		—		3,306		—		—		3,306
Loss on assets held for sale		—		1,086		—		—		1,086
Minority interest expense		238		1,449		928		977		3,592

Total Income, excluding special items	$	37,978	$	36,491	$	29,109	$	23,697	$	127,275

Total Income, excluding special items									$	127,275
Total Interest Expense, net of tax										20,288

									$	147,563
Average invested capital									$	1,536,207

Adjusted Return on Invested Capital										9.6	%

Return on Invested Capital calculated utilizing Net Income, as reported is as follows:
Net Income, as reported									$	119,291
Total Interest Expense, net of tax										20,288

									$	139,579
Average invested capital									$	1,536,207

Return on Invested Capital										9.1	%

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FINANCIAL HIGHLIGHTS (Continued)

RETURN ON INVESTED CAPITAL (Unaudited):

For the Period Ended June 30, 2004


	6/30/2004		3/31/2004		12/31/2003		9/30/2003		6/30/2003		Average
Invested Capital
Debt	$	440,207	$	494,312	$	481,327	$	520,138	$	525,687	$	492,334
Accounts receivable securitized		117,480		108,916		101,422		95,318		99,316		104,490
Minority interest		16,232		16,598		16,286		16,089		18,880		16,817
Shareowners’ equity		887,152		809,904		791,442		746,562		721,577		791,327

Total	$	1,461,071	$	1,429,730	$	1,390,477	$	1,378,107	$	1,365,460	$	1,404,968


					Quarter Ended
	6/30/2004		3/31/2004		12/31/2003		9/30/2003		Total
Interest Expense
Interest expense	$	6,405	$	6,332	$	6,547	$	6,600	$	25,884
Securitization interest		443		356		483		397		1,679

Total interest expense	$	6,848	$	6,688	$	7,030	$	6,997	$	27,563

Income tax benefit										8,820

Total interest expense, net of tax									$	18,743


						Quarter Ended
	6/30/2004			3/31/2004		12/31/2003			9/30/2003		Total
Total Income
Net income, as reported	$	29,852		$	24,070	$	10,892		$	8,764	$	73,578

Minority interest expense		(36	)		533		404			695		1,596
MSSG restructuring		—			—		1,109			2,307		3,416
AMSG restructuring		—			—		1,018			—		1,018
Widia integration costs — MSSG		—			—		—			1,027		1,027
Widia integration costs — AMSG		—			—		—			33		33
Pension curtailment		—			—		883			—		883
Gain on Toshiba investment		—			—		(2,990	)		—		(2,990	)
Note receivable		—			—		1,360			—		1,360

Total Income, excluding special items	$	29,816		$	24,603	$	12,676		$	12,826	$	79,921


Total Income, excluding special items											$	79,921
Total Interest Expense, net of tax												18,743

											$	98,664
Average invested capital											$	1,404,968

Adjusted Return on Invested Capital												7.0	%

Return on Invested Capital calculated utilizing Net Income, as reported is as follows:
Net Income, as reported											$	73,578
Total Interest Expense, net of tax												18,743

											$	92,321
Average invested capital											$	1,404,968

Return on Invested Capital												6.6	%

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