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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950152-03-000795.txt : 20030129
<SEC-HEADER>0000950152-03-000795.hdr.sgml : 20030129
<ACCEPTANCE-DATETIME>20030129170747
ACCESSION NUMBER:		0000950152-03-000795
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20030129
ITEM INFORMATION:		
FILED AS OF DATE:		20030129

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KENNAMETAL INC
		CENTRAL INDEX KEY:			0000055242
		STANDARD INDUSTRIAL CLASSIFICATION:	MACHINE TOOLS, METAL CUTTING TYPES [3541]
		IRS NUMBER:				250900168
		STATE OF INCORPORATION:			PA
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05318
		FILM NUMBER:		03530376

	BUSINESS ADDRESS:	
		STREET 1:		1600 TECHNOLOGY WAY
		STREET 2:		P O  BOX 231
		CITY:			LATROBE
		STATE:			PA
		ZIP:			15650
		BUSINESS PHONE:		7245395000

	MAIL ADDRESS:	
		STREET 1:		1600 TECHNOLOGY WAY
		STREET 2:		PO BOX 231
		CITY:			LATROBE
		STATE:			PA
		ZIP:			15650
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>j9844901e8vk.txt
<DESCRIPTION>FORM 8-K
<TEXT>
<PAGE>
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT
                     PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

       Date of report (date of earliest event reported): January 29, 2003

                                 KENNAMETAL INC.
               (Exact name of registrant as specified in charter)

        PENNSYLVANIA                   1-5318                   25-0900168
(State or other jurisdiction         (Commission              (IRS Employer
      of incorporation)              File Number)         Identification Number)

                               World Headquarters
                              1600 Technology Way
                                  P.O.Box 231
                          Latrobe, Pennsylvania 15650
                    (Address of Principal Executive Offices)

       Registrant's telephone number, including area code: (724) 539-5000




<PAGE>




Item 9.  Regulation FD Disclosure

     On January 29, 2003, Kennametal Inc. issued a press release announcing
second-quarter fiscal 2003 financial results. Attached hereto as Exhibit 99.1 is
a copy of such press release.

     This information is not "filed" pursuant to the Securities Exchange Act
1934 and is not incorporated by reference into any registrations under the
Securities Act of 1933. Additionally, the submission of this Report on Form 8-K
is not an admission as to the materiality of any information in the report that
is required to be disclosed solely by Regulation FD.





<PAGE>




                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

Dated:  January 29, 2003

                                             KENNAMETAL INC.

                                                By: /s/  Timothy A. Hibbard
                                                ------------------------------
                                                Name:  Timothy A. Hibbard
                                                Title:  Corporate Controller
                                                and Chief Accounting Officer



<PAGE>




                                  EXHIBIT INDEX


   EXHIBIT                    DESCRIPTION                          REFERENCE
   -------                    -----------                          ---------

    99.1          Press Release dated January 29, 2003           Filed herewith







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>j9844901exv99w1.txt
<DESCRIPTION>PRESS RELEASE DATED JANUARY 29, 2003
<TEXT>
<PAGE>
                                                                    Exhibit 99.1


                                               FROM:  KENNAMETAL INC.
[KENNAMETAL logo]                                     P.O. Box 231
                                                      Latrobe, PA 15650

                                                      Investor Relations
                                                      724-539-6141
                                                      Contact:  Beth A. Riley

                                                      Media Relations
                                                      724-539-4618
                                                      Contact:  Steve Halvonik

                                                      DATE:  January 29, 2003

                                        FOR RELEASE:  Immediate


                      KENNAMETAL MEETS QUARTER EXPECTATIONS
                      Widia Integration Progressing Rapidly

LATROBE, Pa., January 29, 2003 - Kennametal Inc. (NYSE: KMT) today reported
fiscal 2003 second quarter earnings of $0.27 per diluted share compared with
earnings of $0.32 per diluted share last year, excluding special items in each
period. On the same basis through the first six months, earnings were $0.58 per
diluted share versus last year's earnings of $0.75.

Fiscal 2003 second quarter earnings included the expected $0.05 dilution from
the Widia acquisition.

- -------------------------------------------------------------------------------
                   EARNINGS PER SHARE EXCLUDING SPECIAL ITEMS

           Company Guidance (10/23/02)                 $0.24 to $0.29

           Analyst Estimate Range (01/21/03)           $0.25 to $0.30

           Earnings, Excluding Special Items                 $0.27
- --------------------------------------------------------------------------------

On a reported basis, diluted earnings per share were $0.07 for the quarter,
above last year's loss per share of $0.08. For the first six months, reported
diluted earnings per share were $0.38 against last year's loss per share of
$7.66. The prior year included a non-cash SFAS 142 impairment charge associated
with the adoption of SFAS No. 142 "Goodwill and Other Intangible Assets".

Kennametal Chairman, President and Chief Executive Officer, Markos I.
Tambakeras, said, "Through the December quarter, and despite a persistently
oblique recovery, we delivered two consecutive months of volume growth to end
the quarter. Revenues grew 14 percent, fueled by the Widia acquisition, and we
were particularly pleased to improve gross margins by 100 basis points as the
Kennametal Lean Enterprise, prior restructurings and continued pricing
discipline all delivered additional benefits."



                                    - more -

<PAGE>

                                       -2-


Tambakeras continued, "Our technological leadership was affirmed as we achieved
a significant milestone in the quarter by earning 41 percent of our sales from
new products. At the same time, we continue to generate strong cash flow and
manage our capital expenditures very prudently. We are also aggressively focused
on our customer acquisition process to accelerate market share growth."

- -------------------------------------------------------------------------------
SECOND QUARTER HIGHLIGHTS
- -------------------------------------------------------------------------------

o        Sales of $431.7 million were 14 percent above last year's $380.3
         million. Sales growth was driven by a 14 percent positive benefit from
         net acquisitions and divestitures, and also included a 1 percent
         benefit from foreign currency exchange.

o        Gross profit margin, excluding special charges in both periods, of 31.9
         percent increased 100 basis points compared with the second quarter of
         fiscal 2002. Manufacturing efficiencies from the Kennametal Lean
         Enterprise and a benefit from foreign currency exchange offset the
         combination of lower Widia margins, unfavorable customer and product
         mix and $1.6 million in decreased pension income.

o        Operating expense for the quarter increased 23 percent, to $114.4
         million, excluding special charges. Excluding $15.9 million in net
         acquisition and divestiture operating expense and $2.6 million
         unfavorable foreign currency exchange, operating expense was just 3
         percent above prior year.

o        The current quarter included net special charges of $9.9 million, or
         $0.20 per diluted share, primarily associated with the 5 percent
         salaried workforce reduction announced last quarter. Prior-year results
         included special charges of $18.3 million, or $0.40 per diluted share,
         associated with previously announced restructurings. Prior year charges
         were divided approximately evenly among the J&L/FSS business
         improvement plan, the closure of two IPG drill plants and the closure
         of the Chicago, IL Electronics plant.

o        Interest expense of $9.6 million was 16 percent above the same quarter
         last year on a higher average debt level for the quarter associated
         with the Widia acquisition.

o        The effective tax rate, excluding special charges, for the December
         2002 quarter was 27.6 percent, compared with prior year of 32.0
         percent. The December tax rate includes a year-to-date adjustment to
         bring the previously announced full-year effective tax rate to 30.0
         percent.

o        Excluding special items, net income was $9.4 million for the quarter, a
         5 percent decrease compared with net income of $10.0 million last year.
         Reported net income was $2.5 million against net loss of $2.5 million
         in the same quarter last year.


                                    - more -

<PAGE>

                                       -3-


o        Decreased pension income reduced earnings per diluted share by $0.04
         for the quarter versus the prior year. Pretax income for the quarter
         was reduced by $1.8 million (non-cash) compared to the same period in
         fiscal 2002 due to the effect of a decrease in the expected rate of
         return on Kennametal's pension fund assets, coupled with lower discount
         rates associated with pension and other postretirement benefit
         liabilities.

o        Free operating cash flow remains strong and on plan at $25.4 million,
         versus $49.8 million in the same period last year. Primary working
         capital continues to be tightly controlled with its ratio to sales at
         27.5 percent, slightly better than prior year. Primary working capital
         of $510.7 million was up 20 percent, or $82 million, from the same
         period last year entirely due to the impact of the Widia acquisition.

o        Total debt was $617 million, up $206 million from June 2002, primarily
         due to the closing of the Widia acquisition.

OUTLOOK
Global economic recovery remains largely stalled as 2003 begins, with only
modest expectations for recovery in the U.S., and continued weak economic
indicators in Europe and Japan. Well-publicized geopolitical tensions further
constrain the potential for near-term growth. Tambakeras said, " Previous
indicators that a definitive recovery would begin early in calendar 2003 have
not been borne out. Capacity utilization remains stuck at 75%, current
indicators now suggest U.S. industrial production growth of at most one percent
in the first half of the current calendar year, and the European outlook is even
softer. The revised economic outlook has required us to moderate our previous
growth assumptions for the second half of our fiscal year. However, we continue
to be highly confident in strong sales acceleration and earnings leverage when
the economy recovers."

Tambakeras continued, "While disappointed by the delayed economic recovery, we
are extremely pleased by the progress in our integration of the Widia
acquisition. The integration is ahead of schedule in both Europe and India.
Restructuring activities are on-track, synergies are being realized and a
comprehensive IT integration is complete. In February, just five months after
acquiring the company, our European sales and service organization will be fully
integrated. The combined force will provide our customers even more complete and
enhanced tooling solutions from a single supplier. At the same time, we have
substantially improved our own operational effectiveness and productivity
through the integration."

Based on assumptions that the first half of calendar 2003 will be weaker than
predicted earlier, sales for the third quarter of fiscal 2003 are expected to
grow 18 to 20 percent, with diluted earnings per share between $0.47 and $0.52,
excluding special charges. The earnings assumption includes $0.04 of dilution
from Widia.


                                    - more -


<PAGE>


                                       -4-


For the year ending in June 2003, sales are anticipated to grow 12 to 14
percent, and diluted earnings per share are forecasted to range from $1.65 to
$1.80, excluding special charges. The earnings assumption includes $0.10 of
dilution from Widia. Despite the reduction in earnings expectations, cash flow
for the year is still expected to exceed $100 million.

As previously announced, a reduction in pension income is lowering diluted EPS
for the year by $0.15 per share, or approximately $0.04 per share per quarter.

DIVIDEND DECLARED
Kennametal also announced its Board of Directors declared a quarterly cash
dividend of $0.17 cents per share, payable February 25, 2003, to shareowners of
record as of the close of business February 10, 2003.

Second quarter results will be discussed in a live Internet broadcast at 10:00
a.m. today. Access the live or archived conference by visiting the Investor
Relations section of Kennametal's corporate web site at www.kennametal.com.

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; 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. 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


<PAGE>

                                       -5-


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 about 14,500 employees worldwide, the company's annual
sales approximate $1.8 billion, with nearly half coming from sales outside the
United States. Kennametal is a five-time winner of the GM "Supplier of the Year"
award 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. For more information, visit the company's web
site at www.kennametal.com

                                   # # # # #


<PAGE>

                                       -6-


                              FINANCIAL HIGHLIGHTS

Consolidated financial highlights for Kennametal Inc. (NYSE: KMT) for the
quarters and six-month periods ended December 31, 2002 and 2001 are shown in the
following tables (in thousands, except per share amounts).

CONSOLIDATED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                               Quarter Ended                Six Months Ended
                                                                                December 31,                   December 31,
                                                                           ------------------------      ------------------------
                                                                             2002           2001           2002           2001
                                                                           ---------      ---------      ---------      ---------
<S>                                                                        <C>            <C>            <C>            <C>
Net sales                                                                  $ 431,731      $ 380,338      $ 835,949      $ 786,992

        Cost of goods sold                                                   294,248        263,873        567,497        540,688
                                                                           ---------      ---------      ---------      ---------

Gross profit                                                                 137,483        116,465        268,452        246,304

        Operating expense(1)                                                 115,677         93,139        220,512        193,016

        Restructuring and asset impairment charges                             8,561         17,128          8,380         18,706

        Amortization of intangibles                                            1,300            689          2,114          1,379
                                                                           ---------      ---------      ---------      ---------

Operating income                                                              11,945          5,509         37,446         33,203

        Interest expense                                                       9,594          8,290         18,079         17,655

        Other (income) expense, net(2)                                        (1,721)           105         (1,127)          (165)
                                                                           ---------      ---------      ---------      ---------

Income (loss) before provision for income taxes and minority interest          4,072         (2,886)        20,494         15,713

Provision for income taxes                                                       893           (923)         6,148          5,029

Minority interest                                                                709            497          1,047            701
                                                                           ---------      ---------      ---------      ---------

Income (loss) before cumulative effect of change in accting. principle         2,470         (2,460)        13,299          9,983

Cumulative effect of change in accounting principle, net of tax(3)                --             --             --       (250,406)
                                                                           ---------      ---------      ---------      ---------

Net income (loss)                                                          $   2,470      $  (2,460)     $  13,299      $(240,423)
                                                                           =========      =========      =========      =========

Diluted earnings (loss) per share                                          $    0.07      $   (0.08)     $    0.38      $   (7.66)
                                                                           =========      =========      =========      =========

Dividends per share                                                        $    0.17      $    0.17      $    0.34      $    0.34
                                                                           =========      =========      =========      =========

Diluted weighted average shares outstanding                                   35,414         30,926         35,379         31,405
                                                                           =========      =========      =========      =========

</TABLE>




(1)      For the quarter and six months ended December 31, 2002, these amounts
         include charges of $1.3 million and $2.0 million, respectively, for
         integration activities related to the Widia acquisition.

(2)      For the quarters ended December 31, 2002 and 2001, these amounts
         include charges of $0.5 million and $0.6 million, respectively, for
         fees incurred in connection with the company's accounts receivable
         securitization program. For the six months ended December 31, 2002 and
         2001, these amounts include similar charges of $1.1 million and $1.5
         million, respectively.

(3)      For the six months ended December 31, 2001, this amount represents a
         non-cash charge for the adoption of Statement of Financial Accounting
         Standards No. 142, "Goodwill and Other Intangible Assets."




                                     -more-

<PAGE>
                                      -7-



                        FINANCIAL HIGHLIGHTS (CONTINUED)

The following tables provide a comparison of the company's reported results, and
the results excluding special items, for fiscal 2003 and fiscal 2002

QUARTER ENDED DECEMBER 31,
<TABLE>
<CAPTION>
                                                                                             Diluted
                                             Gross         Operating       Net Income      Earn./(Loss)
                                             Profit          Income         /(Loss)         Per Share
                                             ------        ---------       ----------      ------------
<S>                                         <C>             <C>             <C>              <C>
2002 Reported Results                       $137,483        $ 11,945        $  2,470         $   0.07
       MSSG Restructuring                         --           4,849           3,394             0.10
       AMSG Restructuring                         --           2,259           1,577             0.04
       Corporate Restructuring                    --             958             670             0.02
       Widia Integration Costs                    54           1,364             970             0.03
                                            --------        --------        --------         --------
            Total Core Business                   54           9,430           6,611             0.19
                                            --------        --------        --------         --------
       J&L Restructuring                          --             466             327             0.01
       FSS Restructuring                          --              29              20               --
                                            --------        --------        --------         --------
            Total Non-Core Business               --             495             347             0.01
                                            --------        --------        --------         --------
2002 Results Excluding Special Items        $137,537        $ 21,870        $  9,428         $   0.27
                                            ========        ========        ========         ========

2001 Reported Results                       $116,465        $  5,509        $ (2,460)        $  (0.08)
       MSSG Restructuring                         --           6,247           4,248             0.14
       AMSG Restructuring                        750           5,954           4,049             0.13
       Corporate Restructuring                    --             157             107               --
                                            --------        --------        --------         --------
            Total Core Business                  750          12,358           8,404             0.27
                                            --------        --------        --------         --------
       J&L Restructuring                         399           5,853           3,980             0.13
       FSS Restructuring                          --              66              44               --
                                            --------        --------        --------         --------
            Total Non-Core Business              399           5,919           4,024             0.13
                                            --------        --------        --------         --------
2001 Results Excluding Special Items        $117,614        $ 23,786        $  9,968         $   0.32
                                            ========        ========        ========         ========

</TABLE>

<PAGE>

                                      -8-


                        FINANCIAL HIGHLIGHTS (CONTINUED)



SIX MONTHS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
                                                                                             Diluted
                                             Gross         Operating       Net Income      Earn./(Loss)
                                             Profit          Income         / (Loss)        Per Share
                                             ------        ---------       ----------      ------------
<S>                                         <C>             <C>             <C>              <C>
2002 Reported Results                       $ 268,452        $  37,446       $  13,299        $   0.38
       MSSG Restructuring                          --            4,849           3,394            0.10
       AMSG Restructuring                          --            2,078           1,454            0.04
       Corporate Restructuring                     --              958             670            0.02
       Widia Integration Costs                     54            2,075           1,453            0.03
                                            ---------        ---------       ---------        --------
            Total Core Business                    54            9,960           6,971            0.19
                                            ---------        ---------       ---------        --------
       J&L Restructuring                           --              466             327            0.01
       FSS Restructuring                           --               29              20              --
                                            ---------        ---------       ---------        --------
            Total Non-Core Business                --              495             347            0.01
                                            ---------        ---------       ---------        --------
2002 Results Excluding Special Items        $ 268,506        $  47,901       $  20,617        $   0.58
                                            =========        =========       =========        ========

2001 Reported Results                       $ 246,304        $  33,203       $(240,423)       $  (7.66)
       MSSG Restructuring                          --            6,237           4,241            0.14
       AMSG Restructuring                         750            5,954           4,049            0.13
       Corporate Restructuring                     --              157             107              --
       MSSG ( Adoption of SFAS 142)                --               --         168,314            5.37
       AMSG ( Adoption of SFAS 142)                --               --          82,092            2.61
                                            ---------        ---------       ---------        --------
            Total Core Business                   750           12,348         258,803            8.25
                                            ---------        ---------       ---------        --------
       J&L Restructuring                          399            7,471           5,079            0.16
       FSS Restructuring                           --               36              25              --
                                            ---------        ---------       ---------        --------
            Total Non-Core Business               399            7,507           5,104            0.16
                                            ---------        ---------       ---------        --------
2001 Results Excluding Special Items        $ 247,453        $  53,058       $  23,484        $   0.75
                                            =========        =========       =========        ========
</TABLE>


                                     -more-

<PAGE>

                                      -9-


                        FINANCIAL HIGHLIGHTS (CONTINUED)


SEGMENT DATA:

<TABLE>
<CAPTION>
                                                                  Quarter Ended                    Six Months Ended
                                                                   December 31,                       December 31,
                                                           ---------------------------         ---------------------------
                                                             2002              2001              2002              2001
                                                           ---------         ---------         ---------         ---------
<S>                                                       <C>                <C>              <C>               <C>
Sales:
Metalworking Solutions and Services Group                  $ 280,646         $ 218,078         $ 526,148         $ 441,035
Advanced Materials Solutions Group                            72,682            71,614           151,999           154,619
J&L Industrial Supply                                         48,076            56,003            96,283           115,124
Full Service Supply                                           30,327            34,643            61,519            76,214
                                                           ---------         ---------         ---------         ---------
Total Sales                                                $ 431,731         $ 380,338         $ 835,949         $ 786,992
                                                           =========         =========         =========         =========

Sales By Geographic Region:
Within the United States                                   $ 229,506         $ 242,509         $ 468,630         $ 508,235
International                                                202,225           137,829           367,319           278,757
                                                           ---------         ---------         ---------         ---------
Total Sales                                                $ 431,731         $ 380,338         $ 835,949         $ 786,992
                                                           =========         =========         =========         =========

Operating Income (Loss), as reported:
Metalworking Solutions and Services Group                  $  18,017         $  17,410         $  42,332         $  42,081
Advanced Materials Solutions Group                             5,716              (652)           16,396             9,711
J&L Industrial Supply                                          1,722            (3,665)            3,886            (2,933)
Full Service Supply                                             (332)              247              (351)            1,419
Corporate and Eliminations                                   (13,178)           (7,831)          (24,817)          (17,075)
                                                           ---------         ---------         ---------         ---------
Total Operating Income                                     $  11,945         $   5,509         $  37,446         $  33,203
                                                           =========         =========         =========         =========

Operating Income (Loss), excluding special charges:
Metalworking Solutions and Services Group                  $  24,226         $  23,657         $  49,252         $  48,318
Advanced Materials Solutions Group                             7,979             5,302            18,478            15,665
J&L Industrial Supply                                          2,188             2,188             4,352             4,538
Full Service Supply                                             (303)              313              (322)            1,455
Corporate and Eliminations                                   (12,220)           (7,674)          (23,859)          (16,918)
                                                           ---------         ---------         ---------         ---------
Total Operating Income                                     $  21,870         $  23,786         $  47,901         $  53,058
                                                           =========         =========         =========         =========

</TABLE>

                                     -MORE-

<PAGE>

                                       -10-


                        FINANCIAL HIGHLIGHTS (CONTINUED)

CASH FLOW INFORMATION


<TABLE>
<CAPTION>
                                               Quarter Ended                     Six Months Ended
                                                December 31,                        December 31,
                                         ---------------------------         ---------------------------
                                           2002              2001              2002              2001
                                         ---------         ---------         ---------         ---------
<S>                                      <C>               <C>               <C>               <C>
Net income                               $   2,470         $  (2,460)        $  13,299         $(240,423)
Adoption of SFAS 142                            --                --                --           250,406
Other Non-cash items                         3,883            16,154             6,336            18,221
Depreciation and amortization               20,914            18,591            39,980            37,302
Change in primary working capital           16,715            43,645            18,675            38,216
Change in other working capital             (7,319)          (16,996)           (2,879)          (32,741)
                                         ---------         ---------         ---------         ---------
Cash flow from operations                   36,663            58,934            75,411            70,981
Capital expenditures                       (11,536)          (10,087)          (22,011)          (20,114)
Proceeds from asset disposals                  238               920               843             3,525
                                         ---------         ---------         ---------         ---------
Free operating cash flow                 $  25,365         $  49,767         $  54,243         $  54,392
                                         =========         =========         =========         =========

</TABLE>

CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                               Quarter Ended
                                             ----------------------------------------------------------------------------------
                                              12/31/02          9/30/02           6/30/02           3/31/02           12/31/01
                                             ----------        ----------        ----------        ----------        ----------
<S>                                          <C>               <C>              <C>               <C>               <C>
ASSETS
Cash and equivalents                         $   18,155        $   14,300        $   10,385        $   10,705        $   10,414
Accounts receivable, net of allowance           199,261           221,313           179,101           168,094           162,916
Inventories                                     403,530           403,590           345,076           351,129           367,724
Deferred income taxes                            80,204            71,084            71,375            82,949            83,987
Other current assets                             53,868            40,110            31,447            28,064            24,728
                                             ----------        ----------        ----------        ----------        ----------
  TOTAL CURRENT ASSETS                          755,018           750,397           637,384           640,941           649,769
                                             ----------        ----------        ----------        ----------        ----------
Property, plant and equipment, net              480,066           480,696           435,116           438,505           448,263
Goodwill and Intangible assets, net             479,122           467,140           367,992           370,324           371,263
Other assets                                    104,937           109,225            83,119            60,458            60,797
                                             ----------        ----------        ----------        ----------        ----------
  TOTAL                                      $1,819,143        $1,807,458        $1,523,611        $1,510,228        $1,530,092
                                             ==========        ==========        ==========        ==========        ==========

LIABILITIES
Short-term debt                              $   17,591        $   16,992        $   23,480        $  383,639        $  406,677
Accounts payable                                 92,114           101,823           101,586            93,810           101,817
Accrued liabilities                             171,726           171,045           137,034           152,867           148,428
                                             ----------        ----------        ----------        ----------        ----------
   TOTAL CURRENT LIABILITIES                    281,431           289,860           262,100           630,316           656,922

Long-term debt                                  599,425           599,615           387,887           164,257           173,514
Deferred income taxes                            46,801            53,475            52,570            52,564            51,815
Other liabilities                               135,101           125,816            96,421            88,720            89,880
                                             ----------        ----------        ----------        ----------        ----------
   TOTAL LIABILITIES                          1,062,758         1,068,766           798,978           935,857           972,131
                                             ----------        ----------        ----------        ----------        ----------

MINORITY INTEREST                                18,656            17,685            10,671             8,907             9,271
                                             ----------        ----------        ----------        ----------        ----------

SHAREOWNERS' EQUITY                             737,729           721,007           713,962           565,464           548,690
                                             ----------        ----------        ----------        ----------        ----------

   TOTAL                                     $1,819,143        $1,807,458        $1,523,611        $1,510,228        $1,530,092
                                             ==========        ==========        ==========        ==========        ==========

</TABLE>


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