<PAGE>
SECURITIES AND EXCHANGE COMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the fiscal year ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the transition period from to
Commission File Number: 1-5318
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below:
KENNAMETAL THRIFT PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Kennametal Inc.
Route 981 at Westmoreland County Airport
P.O. Box 231
Latrobe, Pennsylvania 15650
<PAGE>
KENNAMETAL INC.
THRIFT PLAN
I N D E X
---------
Report of Independent Public Accountants
Financial Statements:
Statements of Net Assets Available for Plan Benefits as of
June 30, 1996 and 1995
Statements of Changes in Net Assets Available for Plan Benefits
for the years ended June 30, 1996 and 1995
Notes to Financial Statements
Supplemental Schedules:
Item 27a - Schedule of Assets Held for Investment Purposes as of
June 30, 1996
Item 27d - Schedule of Reportable Transactions for the year ended
June 30, 1996
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------
To the Board of Directors, Kennametal Inc.:
and to the Kennametal Inc. ERISA Compliance Committee:
We have audited the accompanying statements of net assets available for plan
benefits of Kennametal Inc. Thrift Plan (the Plan) as of June 30, 1996 and
1995, and the related statements of changes in net assets available for plan
benefits for the years then ended. These financial statements and the
schedules referred to below are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan
as of June 30, 1996 and 1995, and the changes in net assets available for plan
benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department for Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedules and fund information have been subject to the auditing procedures
applied in the audits of the basic financial statements and, in our opinion,
are fairly stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ ARTHUR ANDERSEN LLP
-----------------------
Arthur Andersen LLP
Pittsburgh, Pennsylvania
December 13, 1996
<PAGE>
KENNAMETAL INC.
THRIFT PLAN
(PLAN 002)
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
JUNE 30, 1996 AND 1995
ASSETS 1996 1995
------ ------------ ------------
Receivables:
Employer Contributions $ 291,288 $ 326,152
Participant Contributions 829,453 884,081
------------ ------------
Total Receivables $ 1,120,741 $ 1,210,233
------------ ------------
General Investments:
Common/Collective Trusts-Fixed Fund $ 78,721,429 $ 80,016,209
Pooled Separate Accounts -
Equity & Balanced Funds 54,808,031 35,594,303
------------ ------------
Total General Investments $133,529,460 $115,610,512
------------ ------------
NET ASSETS $134,650,201 $116,820,745
============ ============
The accompanying notes are an integral part of these statements.
<PAGE<
KENNAMETAL INC.
THRIFT PLAN
(PLAN 002)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR YEARS ENDED JUNE 30, 1996 AND 1995
1996 1995
------------ ------------
Contributions:
Employer $ 3,770,394 $ 3,554,804
Participant 10,612,045 9,538,912
------------ ------------
Total Contributions $ 14,382,439 $ 13,093,716
------------ ------------
Earnings on Investments:
Net Investment Gain -
Common/Collective Trusts -
Fixed Fund $ 4,678,502 $ 4,627,232
Net Investment Gain-Pooled
Separate Accounts -
Equity & Balanced Funds 8,551,079 6,266,039
------------ ------------
Total Earnings on Investments $ 13,229,581 $ 10,893,271
------------ ------------
Expenses:
Benefit Payments to Participants ($ 9,620,295)($ 7,810,501)
Administrative Expenses:
Accounting Fees ( 25,675)( 7,700)
Contract Administrator Fees ( 78,217)( 77,061)
Investment Advisory & Mgmt. Fees( 126,650)( 119,259)
------------ ------------
Total Administrative Expenses ($ 230,542)($ 204,020)
------------ ------------
Net Change in Plan Assets $ 17,761,183 $ 15,972,466
------------ ------------
Transfers to the Plan (ATC/Hertel) $ 68,273 $ 711,097
NET ASSETS, BEGINNING OF YEAR $116,820,745 $100,137,182
------------ ------------
NET ASSETS, END OF YEAR $134,650,201 $116,820,745
============ ============
The accompanying notes are an integral part of these statements.
<PAGE>
KENNAMETAL INC.
THRIFT PLAN
(PLAN 002)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 AND 1995
1. DESCRIPTION OF PLAN:
The Thrift Plan (the Plan), a defined contribution employee benefit
plan, adopted on January 1, 1977, was established to encourage investment and
savings for certain salaried and hourly employees of Kennametal Inc. and
subsidiaries and provide a method to supplement their retirement income
benefits. Participants could elect a contribution rate from 2% to 6% of their
earnings, on an after-tax basis, with such contributions made monthly through
payroll deductions. Employer contributions were made each month in an amount
equal to 50% of participant contributions for the month.
On April 1, 1985, the Thrift Plan was changed to provide a vehicle for
employee savings with an added 401(k) tax-deferred feature. The Plan was
amended to allow participants to elect a contribution rate (either before-tax,
after-tax, or a combination of both) of 2% - 12% of the employee's base
salary. Before-tax contributions were capped at $9,240 for 1995. Employer
contributions equal 50% of the participant contribution up to a maximum of 3%
of the participant's salary. Effective April 27, 1987, the Plan was further
amended to provide that investment management, recordkeeping and other
administrative fees and expenses of the Plan be paid from assets and income of
the Plan.
During fiscal year ending June 30, 1995, the Company acquired Adaptive
Technologies Corporation (ATC). As a result of the acquisition, ATC's 401(k)
plan was merged into the Plan during fiscal year ending June 30, 1996.
All eligible employees are entitled to become active participants
of the Plan on the first day of the month coinciding with or following
the completion of ten (10) days of service. Currently, participants
become fully vested in employer contributions on the third anniversary of
their employment date. Forfeitures of employer contributions as a result
of withdrawals, terminations, etc., reduce the amount of future
contributions required by the employer. Under present federal income tax
law, employer contributions and all earnings of the Plan do not
constitute taxable income to the participants until withdrawn from the
plan by the participants.
Distributions to participants due to disability, retirement, or death
are payable in either a lump sum, periodic payments for a period not to exceed
ten (10) years, or purchase of an annuity at the participant's election.
2. ACCOUNTING POLICIES:
BASIS OF ACCOUNTING -- The accounts of the Plan are maintained on the
accrual basis of accounting. Effective Plan year 1992, expenses are recorded
on a cash basis.
INVESTMENTS -- Investment transactions are recorded on a trade date
basis, and revenues are recorded on an accrual basis of accounting.
Effective January 27, 1992, PRIMCO Capital Management, Inc. was
appointed as an investment manager to manage the assets in the Fixed Income
Fund of the Retirement Savings Plan and Thrift Plan. Investment contracts
placed by PRIMCO represent investment of combined assets for both the
Retirement Savings Plan and the Thrift Plan. Individual Plan investment
contracts (GICs) made prior to PRIMCO's appointment will remain in effect
until the scheduled maturity period. Investments of the Fixed Income Fund
consist of traditional investment contracts issued by insurance companies,
banks, and other financial institutions (or corporations), asset-backed
investment contracts, synthetic investment contracts, PRIMCO Group Trust, and
short-term investments.
A custodial arrangement for the Fixed Income Fund investments of the
Retirement Savings Plan and Thrift Plan was established on April 30, 1992.
PNC Bank, N.A. (PNC) was appointed as custodian of the custodial arrangement.
As custodian, PNC also manages the cash portion of the Plans' Fixed Income
Fund.
The Plan's interest in the assets of the common trust is included in the
accompanying Statements of Net Assets Available for Plan Benefits.
Allocations of assets of the common trust to participating plans as of June
30, 1996 and June 30, 1995 are as follows:
1996 1995
----------------------- -----------------------
Amount Percent Amount Percent
------------ ------- ------------ -------
Thrift Plan $ 78,721,429 95.89% $ 80,016,210 96.51%
Retirement Savings Plan 3,373,189 4.11% 2,894,533 3.49%
------------ ------- ------------ -------
Total Assets of Common Trust $ 82,094,618 100.00% $ 82,910,743 100.00%
Common trust income allocated to the participating plans for the years
ended June 30, 1996 and June 30, 1995 is as follows:
Earnings on Investments - Interest 1996 1995
------------ ------------
Thrift Plan $ 4,678,502 $ 4,627,232
Retirement Savings Plan 186,930 161,863
------------ ------------
Total Earnings on Investments - Interest $ 4,865,432 $ 4,789,095
Investments of the Equity Fund consist solely of common stocks whereas
the Balanced Fund's investments are a combination of stocks, bonds, cash, and
convertible securities.
Investments held in the Equity Fund and Balanced Fund are reflected in
the accompanying Statements of Net Assets Available for Plan Benefits at
market value. Market value, which is equivalent to current value, is the unit
valuation of the investments in commingled funds as reported to the Trustee by
the Equitable Life Assurance Society of the United States.
In September of 1994, the AICPA issued SOP 94-4, "Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined-
Contribution Pension Plans." This statement is effective for financial
statements for plan years beginning after December 15, 1994. SOP 94-4 states
that fully benefit-responsive investment contracts of defined contribution
plans should be accounted for at contract value in the accompanying financial
statements. PRIMCO Capital Management, Inc. certified that all the investment
contracts held in the Fixed Income Fund are fully benefit-responsive. The
attached schedule certified by PRIMCO Capital Management, Inc. lists the fair
value of all these contracts.
USE OF ESTIMATES IN PREPARATION OF FINANCIAL STATEMENTS -- The
preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results may differ from these estimates.
PLAN TERMINATION -- Although it has not expressed any intent to do so,
the Company has the right to terminate the Plan at any time, subject to the
provisions of the Employee Retirement Income Security Act of 1974. In the
event of Plan termination, the accounts of all participants will become fully
vested and nonforfeitable.
RECLASSIFICATIONS -- Certain prior year balances have been reclassified
to conform to the current year presentation.
3. QUALIFICATION OF PLAN:
The Plan has been determined by the Internal Revenue Service to be
qualified under the Internal Revenue Code. The Internal Revenue Service
issued a favorable determination on April 23, 1996. Plans which are qualified
under regulations of the Internal Revenue Service are not subject to federal
income taxes.
4. KENNAMETAL THRIFT PLAN ADMINISTRATION:
Kennametal Inc. serves as Trustee of the Plan.
Benefit Services Corporation, a firm providing defined contribution
administration services, serves as recordkeeper for the Plan.
PRIMCO Capital Management, Inc., serves as the investment manager for
the Fixed Income Fund. PNC Bank, N.A. serves as custodian for the Plan.
The Equitable Life Assurance Society of the United States serves as the
investment manager and custodian for the Equity Fund and Balanced Fund.
During Fiscal Year 1993, the business of Equitable Capital Management
Corporation, a wholly owned subsidiary of Equitable Life, was transferred to
Alliance Capital Management L.P., a partially owned indirect subsidiary of
Equitable Life.
5. BENEFIT PAYABLE:
As of June 30, 1996 and 1995, the Plan was liable for participant
benefits due but unpaid in the amount of $2,102,139 and $1,334,981,
respectively. Additionally, the Plan has an operating payable of ($56) for
1996. These amounts are recorded as a liability in the Plan's Form 5500;
however, these amounts are not recorded as a liability in the accompanying
statements of net assets available for plan benefits in accordance with
generally accepted accounting principles.
6. Schedule of Assets Held for Investment Purposes:
(PRIMCO - Statement of Assets and Alliance Capital Asset Summary)
See attached schedules.
7. Schedule of Reportable Transactions:
(Alliance Capital Management Corp. and PNC Bank, N.A.)
See attached schedules.
8. Change in Assets Available for Plan Benefits by Investment Fund:
See attached schedule.
<PAGE>
<TABLE>
<CAPTION>
Fair Value of Fixed Fund Investment Contracts
Statement of Supporting Assets Kennametal Inc. Retirement Savings and Thrift Plans
Jun-30-96
Contract Contract Cusip Fair Value
Issuer Number Number Security Asset Type Series-Trnch Coupon % Market Value
- -------- -------- ------ -------- ---------- ------------ -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Alls(ABS) 31007 Allstate SA 5.96% $2,043,194
BASIC 92-426ALP PRIMCO Grp Tr Alpha Fund 6.84 $7,738,913
BASIC 92-472 312913XK7 Federal Home Loan Mtge Co Mrtg - Res 1434 -D 6.25 $3,303,069
Hanc(ABS) 7562 Hanc Structured Fin Acct 6.15 $4,049,083
Mass(ABS) 10480 Mass Mutual SA B11 NA $4,869,261
Met (ABS) 13708 MET SA 118 NA $6,531,631
NYL (ABS) 20032-18D 34527LAA4 Ford Credit Auto Loan MT ABS - Auto 92-1 -A 6.88 $ 479,709
025928AA0 American Express MT ABS - Card 92-1 -A 6.05 475,333
34527LAB2 Ford Credit Auto Loan MT ABS - Auto 92-2 -A 7.38 474,505
55262NAB2 MBNA Master CC Trust ABS - Card 92-1 -A 7.25 466,884
161612AC0 Chase Man Credit Card MT ABS - Card 92-1 -A 7.40 466,324
31945RAJ2 First Chicago MT II ABS - Card 92-E -A 6.25 462,445
55262NAC0 MBNA Master CC Trust ABS - Card 92-2 -A 6.20 462,193
25466LAW7 Discover Card Trust ABS - Card 93-A -A 6.25 461,369
25466LAU1 Discover Card Trust ABS - Card 92-B -A 6.80 279,170
25466LAN7 Discover Card Trust ABS - Card 91-E -A 7.30 232,166
---------------------
Sub-Total 6.75 $4,260,098
Peop(ABS) 00028TR-1 31359ABM0 Federal Nat'l Mortgage Co Mrtg - Res 93-71 -PD 5.50 $3,545,712
Peop(ABS) 00028TR-2 31359BAF4 Federal Nat'l Mortgage Co Mrtg - Res 93-109 -E 5.50 $1,963,384
Peop(ABS) 00028TR-3 31359BRK5 Federal Nat'l Mortgage Co Mrtg - Res 93-135 -PC 5.50 $1,474,770
Peop(ABS) 00028TR-4 3133T1GE6 Federal Home Loan Mtge Co Mrtg - Res 1587 -D 5.50 $2,845,425
Peop(ABS) 00028TR-5 848466AA6 Spiegal Credit Master Trs ABS - Card 94B -A 8.15 $1,033,776
Peop(ABS) 00028TR-6 393505FC1 Green Tree Financial ABS - Mfd Hou 95-1 -A2 7.80 $ 924,556
TrLA(ABS) 76543 PRIMCO Gr Tr GAMMA Fund NA $5,753,323
----- -----------
Total NA% $50,336,194
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Fair Value of Fixed Fund Investment Contracts
Statement of GIC Market Values Kennametal Inc. Retirement Savings and Thrift Plans
Jun-30-96 Fair Value
Contract Years to Discnt Discounted
Issuer Number Maturity Maturity Duration Yield Book Value Rate Value Gain or (Loss)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Security Backed Investments
- ---------------------------
Synthetics
Caisse des Depots (CDC) 220-01 Dec-31-99 3.5 2.03 6.19% $892,129 6.47% $ 887,380 $ (4,749)
---- ----- -------- ----- --------- ----------
2.03 6.19% $892,129 6.47% $ 887,380 $ (4,749)
Investment Contracts
- -----------------------
Fixed Rate & Fixed Term
Allstate Life Ins. Co. 5505 Sep-03-96 0.18 0.13 4.88% $1,701,089 5.38% $1,699,796 $ (1,293)
Canada Life Assurance Co. 45798 Jan-04-99 2.51 2.11 5.36 4,095,535 6.49 4,004,551 (90,985)
John Hancock Mutual Life 6258 Jul-01-97 1.00 0.88 7.34 4,669,798 5.56 4,737,653 67,855
John Hancock Mutual Life 6406 Oct-15-97 1.29 1.29 6.49 1,253,939 5.85 1,263,610 9,671
Metropolitan Life Ins Co 13678 Feb-01-99 2.59 2.47 5.55 5,593,550 6.58 5,459,862 (133,688)
Metropolitan Life Ins Co 13852 Oct-01-99 3.25 3.17 7.55 2,268,327 6.75 2,322,249 53,922
New York Life Ins. Co. 30334 Apr-03-00 3.76 2.87 6.45 3,170,238 6.69 3,150,457 (19,781)
Sun Life Assoc. Canada(US) S-0892-G Oct-01-98 2.25 2.09 5.05 4,550,922 6.48 4,424,003 (126,918)
---- ---- ---------- ---- ---------- ----------
1.98 6.02% $27,303,397 6.30% $27,062,180 $(241,217)
Total GICs 1.99 6.02% $28,195,527 6.30% $27,949,561 $(245,966)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KENNAMETAL THRIFT PLAN
EIN 25- 0900168 PN 002
Item 27a Schedule of Assets Held for Investment Purposes
Statement of Assets Kennametal Inc. Retirement Savings and Thrift Plans
Jun-30-96
Contract Years to Market Value*
Issuer Number Maturity Maturity Duration Yield Current Value Percent
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Security Backed Investments
- ---------------------------
PRIMCO Group Trust
Bankers Trust (Del) BASIC 92-426ALP Sep-30-00 4.25 2.67 6.08% $ 7,828,936 9.5%
Transamerica Life & Annuity 76543 Nov-15-04 8.38 4.00 6.13 5,830,917 7.1
---- ----- ----------- -----
3.24 6.10% $13,659,853 16.6%
Separate Account Contracts
Allstate Life Ins. Co. 31007 Feb-18-02 5.64 2.50 5.63% $ 2,073,033 2.5%
John Hancock Mutual Life 7562 May-01-04 7.84 3.50 7.43 3,965,434 4.8
Mass Mutual Life Ins. Co. 10480 Jul-05-02 6.01 2.79 6.30 4,945,095 6.0
Metropolitan Life Ins Co. 13708 Jan-02-01 4.51 3.00 6.60 6,560,365 8.0
New York Life Ins. Co. 20032-18D Jun-30-98 2.00 0.99 5.50 4,295,631 5.2
---- ----- ----------- -----
2.60 6.37% $21,839,557 26.6%
Synthetics
Bankers Trust (Del) BASIC 92-472 Jul-15-97 1.04 0.68 6.20% $ 3,313,813 4.0%
Caisse des Depots (CDC) 220-01 Dec-31-99 3.50 2.03 6.19 892,129 1.1
Peoples Security Life 00028TR-1 Apr-27-98 1.82 1.35 5.23 3,608,052 4.4
Peoples Security Life 00028TR-2 Sep-25-98 2.24 1.57 5.57 1,995,135 2.4
Peoples Security Life 00028TR-3 May-26-98 1.90 1.47 5.27 1,502,664 1.8
Peoples Security Life 00028TR-4 Sep-15-98 2.21 1.70 5.26 2,911,102 3.5
Peoples Security Life 00028TR-5 Jun-15-00 3.96 3.06 7.80 1,013,987 1.2
Peoples Security Life 00028TR-6 Feb-16-99 2.63 1.22 7.87 913,602 1.1
---- ----- ----------- -----
1.45 5.84% $16,150,484 19.7%
---- ----- ----------- -----
Sub-Total 2.41 6.14% $51,649,894 62.9%
Investment Contracts
Fixed Rate & Fixed Term
Allstate Life Ins. Co. 5505 Sep-03-96 0.18 0.13 4.88% $ 1,701,089 2.1%
Canada Life Assurance Co. 45798 Jan-04-99 2.51 2.11 5.36 4,095,535 5.0
John Hancock Mutual Life 6258 Jul-01-97 1.00 0.88 7.34 4,669,798 5.7
John Hancock Mutual Life 6406 Oct-15-97 1.29 1.29 6.49 1,253,939 1.5
Metropolitan Life Ins Co. 13678 Feb-01-99 2.59 2.47 5.55 5,593,550 6.8
Metropolitan Life Ins Co. 13852 Oct-01-99 3.25 3.17 7.55 2,268,327 2.8
New York Life Ins. Co. 30334 Apr-03-00 3.76 2.87 6.45 3,170,238 3.9
Sun Life Assoc. Canada(US) S-0892-G Oct-01-98 2.25 2.09 5.05 $ 4,550,922 5.5
---- ----- ----------- -----
1.98 6.02% $27,303,397 33.3%
Sub-Total 1.98 6.02% $27,303,397 33.3%
Cash & Equivalents
Pittsburgh Nat'l Bank 103575-9 Jul-01-96 - 5.07% $ 3,140,758 3.8%
Pittsburgh Nat'l Bank 103573-3 Jul-01-96 - 5.07 528 -
Pittsburgh Nat'l Bank 103574-1 Jul-01-96 - 5.07 41 -
---- ----- ----------- ------
Sub-Total - 5.07% $ 3,141,327 3.8%
---- ----- ----------- ------
Total Portfolio 2.18 6.06% $82,094,618 100.0%
==== ===== =========== ======
</TABLE>
- --------------------------
* Cost equals market value
<PAGE>
<TABLE>
<CAPTION>
KENNAMETAL THRIFT PLAN
EIN 25- 0900168 PN 002
Item 27a Schedule of Assets Held for Investment Purposes
KENNAMETAL INC.
ASSET SUMMARY REPORT AS OF JUNE 28, 1996
CONTRACT NUMBER 3862
BOOK/COST CURRENT % OF TOTAL
VALUE VALUE CURRENT VALUE
--------- ------- -------------
<S> <C> <C> <C>
MARKET VALUE ACCOUNTS:
- ---------------------
EQUITY ACCOUNTS
GROWTH STOCK ACCOUNT (SA#4) $25,589,334.89 $45,542,814.94
COMBINED EQUITY ACCOUNTS $25,589,334.89 $45,542,814.94 83.1%
STRATEGIC BALANCED MANAGEMENT ACCOUNT
STRATEGIC BALANCED MGMT ACCOUNT (SA#10) $ 7,126,048.58 $ 9,265,215.79
COMBINED STRATEGIC BALANCED ACCTS $ 7,126,048.58 $ 9,265,215.79 16.9%
TOTAL MARKET VALUE ACCOUNTS $32,715,383.47 $54,808,030.73 100.0%
-------------- -------------- ------
TOTAL ASSETS $32,715,383.47 $54,808,030.73 100.0%
============== ============== ======
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
KENNAMETAL THRIFT PLAN - (002)
CHANGE IN ASSETS AVAILABLE FOR PLAN BENEFITS @ 6/30/96 EIN 25 - 0900168
BY INVESTMENT FUND
FIXED FUND EQUITY FUND BALANCED FUND TOTAL FUNDS
ACCRUAL BASIS ACCRUAL BASIS ACCRUAL BASIS ACCRUAL BASIS
DESCRIPTION @ 6/30/96 @ 6/30/96 @ 6/30/96 @ 6/30/96
----------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF YEAR $78,808,668.99 $30,746,840.46 $7,265,236.27 $116,820,745.72
CONTRIBUTIONS - EMPLOYER $2,079,059.19 $1,352,177.57 $339,156.75 $3,770,393.51
CONTRIBUTIONS - PARTICIPANTS $5,608,131.37 $4,022,032.32 $981,881.22 $10,612,044.91
EARNINGS ON INVESTMENTS:
COMMON/COLLECTIVE TRUSTS $4,678,501.94 $0.00 $0.00 $4,678,501.94
POOLED SEPARATE ACCOUNTS $0.00 $7,511,068.32 $1,040,010.64 $8,551,078.96
EXPENSES:
BENEFIT PAYMENT TO PARTICIPANTS ($7,037,173.80) ($2,082,221.73) ($500,899.60) ($9,620,295.13)
ACCOUNTING FEES ($16,348.11) ($7,637.15) ($1,689.74) ($25,675.00)
CONTRACT ADMINISTRATOR FEES ($50,212.28) ($22,933.39) ($5,071.47) ($78,217.14)
INVESTMENT ADVISORY & MGT FEES ($126,650.33) $0.00 $0.00 ($126,650.33)
TRANSFERS:
BETWEEN FUNDS ($6,161,401.67) $5,720,457.33 $440,944.34 $0.00
FROM OTHER PLANS $3,454.00 $51,079.57 $13,739.59 $68,273.16
-------------- -------------- ------------- ---------------
NET ASSETS AT END OF YEAR $77,786,029.30 $47,290,863.30 $9,573,308.00 $134,650,200.60
============== ============== ============= ===============
</TABLE>
<PAGE>
KENNAMETAL INC.
THRIFT PLAN
EIN 25-0900168 PN002
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1996
PURCHASES
Cost at Market Value
Acquisition at Acquisition
Date Description Date Date
---- ----------- ----------- --------------
Various Alliance Capital Management Corp. $ 21,835,080 $ 21,835,080
Contract-3862
(Pooled Separate Accts.)
<PAGE>
<TABLE>
<CAPTION>
KENNAMETAL INC.
THRIFT PLAN
EIN 25-0900168 PN002
Item 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED JUNE 30, 1996
PURCHASES
Cost and Current
Identity of Description Number of Purchase Selling Value of Asset Gain(Loss) on
Party Involved of Asset Transactions Price Price on Transaction Date Transactions
- -------------- ----------- ------------ ----------- ------------ ------------------- ------------
<S> <S> <C> <C> <C> <C>
PNC Bank U.S. Treasury 51 $17,444,641 - $17,444,641 -
Obligations 1 9,327,446 - 9,327,446 -
Federated Funds 23 25,560,851 $25,560,851 25,560,851 -
#59
Principle Mutual Life 1 72,704 - 72,704 -
Ins. due 8/1/95 7.5% 1 12,267,471 12,267,471 12,267,471 -
Transamerica Life & 14 4,302,474 - 4,302,474 -
Annuity due
11/15/2004 6.38%
</TABLE>
<PAGE>
SIGNATURES
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the plan administrator of the Kennametal Thrift Plan has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Unity Township, Westmoreland County,
Commonwealth of Pennsylvania.
KENNAMETAL THRIFT PLAN
By: Kennametal Inc., Trustee
By: /s/ AMY DOVERSPIKE
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Plan Administrator
