EX-99.1 2 a05-13971_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

 

Contact:

 

Calvin E. Jenness

 

 

 

Senior Vice President

 

 

 

and Chief Financial

 

 

 

Officer

 

 

 

503-653-4573

 

Release:

 

Immediately

 

 

 

 

 

Blount Announces Second Quarter Results

 

•                  Second quarter sales increased 14.5% from last year’s second quarter

•                  Net income increased to $17.2 million from $8.4 million last year

•                  Sales order backlog of $157.5 million, 21% above year ago levels

•                  Debt outstanding reduced by $125.4 million in the last twelve months with an additional $25.8 million repaid in July

 

PORTLAND, OR, August 2, 2005: Blount International, Inc. [NYSE: BLT] (“Blount” or the “Company”) today reported results for the second quarter ended June 30, 2005.

 

Results for the Quarter Ended June 30, 2005

 

Sales for the second quarter of 2005 were $193.8 million, a 14.5% increase from the second quarter of 2004. Operating income increased by 6.8% from last year’s second quarter to $30.5 million. Net income in this year’s second quarter was $17.2 million ($0.36 per diluted share), more than double last year’s $8.4 million ($0.25 per diluted share). Reduction in net interest expense by $7.4 million, and higher year over year operating income were the principal reasons for the net income improvement. This year’s net income was negatively impacted by a $0.4 million ($0.01 per diluted share) expense related to the early extinguishment of debt.

 

First Half Results

 

Sales for the first half of 2005 were $379.0 million, a 13.2% increase from the comparable period last year. Operating income increased to $60.1 million compared to $55.7 million last year. Net income for the first six months of 2005 was $34.4 million ($0.73 per diluted share) compared to $16.0 million ($0.49 per diluted share) last year.

 

Commenting on the Company’s results, James S. Osterman, Chairman and Chief Executive Officer, stated: “We are pleased with our results in the first half of this year as all three of our business segments recorded sales and operating income increases despite cost pressure related to commodities and the impact of currency on our international manufacturing operations. We have reduced our total debt to EBITDA leverage ratio to 3.5 times as of June 30th through debt repayment and improved operating results. Subsequent to quarter end, we reduced debt by an additional $25.8 million to $456.4 million outstanding and expect to make additional repayments before the end of the year to achieve our leverage goal of under 3.0 times EBITDA. The outlook for the balance of the year is positive; we ended the second quarter with a sales order backlog of $157.5 million and have seen some recent price reductions in certain grades of steel.”

 

-tables to follow-

 


 

Segment Results

 

The Outdoor Products segment second quarter sales were $114.1 million, an 11.7% increase from last year’s second quarter sales of $102.2 million. Segment contribution to operating income increased to $26.8 million from $26.1 million in last year’s second quarter. Increased sales volume and to a lesser extent, selling price increases, were the primary reasons for the sales and profitability improvements. Profitability was negatively impacted by higher steel costs, unfavorable currency effects and a shift in channel mix. Backlog at the end of the second quarter was $82.6 million, up from $77.4 million at the same time last year and down from $90.8 million at the end of the first quarter. Segment sales for the first half were $230.9 million, a 13.0% increase from last year’s $204.3 million. Segment contribution to operating income for the first six months was $55.3 million compared to $52.4 million in 2004.

 

The Industrial and Power Equipment segment sales increased 20.0% to $63.7 million in the second quarter from $53.1 million last year. Segment contribution to operating income in the second quarter was $6.4 million compared to $4.9 million last year, a 31.8% increase. Higher selling prices and a favorable product mix were the primary reasons for the sales and profitability improvements. During the second quarter, the segment began to see reductions in steel prices, but this was offset somewhat by price increases on purchased components.  Backlog increased at the end of the second quarter to $74.4 million from $52.8 million at this time last year and $69.8 million at the end of the first quarter. Sales for the first half were $119.7 million compared to $107.1 million in the same period last year, an 11.7% increase. Segment contribution to operating income for the first six months was $11.2 million compared to $9.6 million last year.

 

The Lawnmower segment sales were $16.1 million in the second quarter, a 13.6% increase from the second quarter of 2004. Segment contribution to operating income was $1.4 million compared to $1.5 million in last year’s second quarter. Backlog was seasonally low at $0.5 million at the end of the second quarter compared to $0.2 million at the same time in 2004. The sales increase was due to a 15% increase in unit volume. Segment contribution to operating income was essentially equal to last year despite the higher unit volume as a shift in distribution channels resulted in lower average unit margins. Segment sales for the first six months were $28.9 million compared to $23.8 million last year, representing a 21.2% increase. Segment contribution to operating income was $1.7 million for the first half compared to $1.3 million last year.

 

Blount International, Inc. is a diversified international company operating in three principal business segments:  Outdoor Products, Industrial and Power Equipment and Lawnmower.  Blount International, Inc. sells its products in more than 100 countries around the world.  For more information about Blount International, Inc., please visit our website at http://www.blount.com.

 

“Forward looking statements,” as defined by the Private Securities Litigation Reform Act of 1995, including without limitation the Company’s “outlook,” “expectations,”  “beliefs,” “plans,” “indications,” “estimates,” “anticipations,” and their variants, are based upon available information and upon assumptions that the Company believes are reasonable; however, these forward looking statements involve certain risks and should not be considered indicative of actual results that the Company may achieve in the future. In particular, among other things, guidance given in this release is expressly based upon certain assumptions concerning market conditions, foreign currency exchange rates, raw material costs, especially with respect to the price of steel, and the presumed relationship between backlog and future sales trends. To the extent that these assumptions are not realized going forward, or other unforeseen factors arise, actual results for the periods subsequent to the date of this announcement may differ materially.

 

-tables to follow-

 


 

Blount International, Inc. Financial Data (Unaudited)

 

Condensed Consolidated Statements of Income

 

 

 

Three mos. ended Jun. 30

 

Six mos. ended Jun. 30

 

(In thousands, except per share data)

 

2005

 

2004

 

2005

 

2004

 

Sales

 

$

193,753

 

$

169,264

 

$

379,007

 

$

334,837

 

Cost of sales

 

133,146

 

110,909

 

258,431

 

219,528

 

Gross profit

 

60,607

 

58,355

 

120,576

 

115,309

 

Selling, general and administrative expenses

 

30,120

 

29,803

 

60,516

 

59,589

 

Operating income

 

30,487

 

28,552

 

60,060

 

55,720

 

Interest expense

 

(9,505

)

(17,255

)

(18,653

)

(34,668

)

Interest income

 

170

 

561

 

411

 

1,336

 

Other income (expense), net

 

(439

)

(142

)

(470

)

(29

)

Income before income taxes

 

20,713

 

11,716

 

41,348

 

22,359

 

Provision for income taxes

 

3,541

 

3,333

 

6,946

 

6,354

 

Net income (loss)

 

$

17,172

 

$

8,383

 

$

34,402

 

$

16,005

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

$

0.38

 

$

0.27

 

$

0.76

 

$

0.52

 

Diluted earnings (loss) per share:

 

$

0.36

 

$

0.25

 

$

0.73

 

$

0.49

 

Shares used for per share computations (in 000’s):

 

 

 

 

 

 

 

 

 

Basic

 

45,692

 

30,936

 

45,397

 

30,898

 

Diluted

 

47,464

 

32,973

 

47,373

 

32,888

 

 

Condensed Consolidated Balance Sheets

 

 

 

Jun. 30,

 

Dec. 31,

 

(In thousands)

 

2005

 

2004

 

Assets:

 

 

 

 

 

Cash and cash equivalents

 

$

54,322

 

$

48,570

 

Accounts receivable

 

82,073

 

74,975

 

Inventory

 

89,069

 

81,098

 

Other current assets

 

4,228

 

4,693

 

Property, plant and equipment, net

 

100,474

 

97,929

 

Other assets

 

115,446

 

117,477

 

Total assets

 

$

445,612

 

$

424,742

 

Liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

3,100

 

$

3,199

 

Other current liabilities

 

100,535

 

108,151

 

Long-term debt, net of current maturities

 

479,123

 

491,012

 

Other liabilities

 

83,287

 

78,534

 

Total liabilities

 

666,045

 

680,896

 

Stockholders’ deficit

 

(220,433

)

(256,154

)

Total liabilities and stockholders’ deficit

 

$

445,612

 

$

424,742

 

 

Segment Information

 

 

 

Three mos. ended Jun. 30

 

Six mos. ended Jun. 30

 

(In thousands)

 

2005

 

2004

 

2005

 

2004

 

Sales:

 

 

 

 

 

 

 

 

 

Outdoor products

 

$

114,092

 

$

102,178

 

$

230,893

 

$

204,279

 

Industrial and power equipment

 

63,687

 

53,093

 

119,703

 

107,117

 

Lawnmower

 

16,136

 

14,198

 

28,878

 

23,817

 

Elimination

 

(162

)

(205

)

(467

)

(376

)

Total sales

 

$

193,753

 

$

169,264

 

$

379,007

 

$

334,837

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

Outdoor products

 

$

26,797

 

$

26,099

 

$

55,283

 

$

52,420

 

Industrial and power equipment

 

6,439

 

4,885

 

11,186

 

9,626

 

Lawnmower

 

1,445

 

1,489

 

1,686

 

1,262

 

Elimination

 

9

 

4

 

(30

)

7

 

Corporate office expense

 

(4,203

)

(3,925

)

(8,065

)

(7,595

)

Operating income

 

$

30,487

 

$

28,552

 

$

60,060

 

$

55,720

 

 

###