Blount International Inc. (BLT, Financial) filed Quarterly Report for the period ended 2009-03-31.
Blount International Inc. is an international manufacturing company with operations in three business segments: Outdoor Products Industrial and Power Equipment and Sporting Equipment. Headquartered in Montgomery Alabamatheir focus is on manufacturing products which offer superior competitive advantage and hold leading market share positions industry-leading distribution and exceptional customer service. Blount International Inc. has a market cap of $347.3 million; its shares were traded at around $7.29 with a P/E ratio of 9.5 and P/S ratio of 0.6.
Sales in the three months ended March 31, 2009 decreased by $16.7 million (12.5%) from the same period in 2008. This sales decrease was primarily due to decreased unit volume of $21.7 million, notwithstanding the inclusion of $10.4 million in sales from Carlton in the first quarter of 2009 compared to no Carlton sales in the first quarter of 2008 which was prior to the acquisition. Partially offsetting this volume-related decrease in sales was $7.9 million of selling price and mix improvements. The translation of foreign currency-denominated sales transactions, given the stronger U.S. Dollar in comparison to the first quarter of 2008, reduced sales by $2.9 million in the comparative period. The Outdoor Products segment, including Carlton in the first quarter of 2009, experienced a $14.8 million (11.7%) decrease in sales during the first quarter of 2009 compared to 2008, while sales of gear components decreased $1.9 million (26.9%) during the same period. International sales decreased by $14.1 million (16.0%) and domestic sales decreased by $2.6 million (5.8%). The decrease in international sales reflected worldwide weakness in demand and poor market conditions, as well as the $2.9 million unfavorable impact to reported sales compared to 2008. The stronger U.S. Dollar has also contributed to a slowdown in orders from our international customers. The decrease in U.S. sales is attributed to poor economic conditions and weakness in demand for our products. We believe that most of our customers have reduced or delayed orders for our products, and reduced their existing inventories of our products, over their concerns about the state of the economy and lower order rates from their customers.
Consolidated order backlog at March 31, 2009 was $84.1 million compared to $103.5 million at December 31, 2008. Backlog in the Outdoor Products segment decreased $17.5 million, while the backlog for gear components decreased by $1.9 million during the first quarter of 2009.
SG&A was $25.2 million in the first quarter of 2009, compared to $24.9 million in the first quarter of 2008, representing an increase of $0.3 million (1%). As a percentage of sales, SG&A increased from 18.7% in 2008 to 21.6% in 2009, largely due to the sharp decrease in sales revenue. Professional services expense increased by $1.6 million due primarily to higher legal costs. Employee benefit expenses increased by $1.0 million, primarily due to higher costs for our U.S. and Canadian defined benefit pension plans. Expense for these plans is higher in 2009 than it was in 2008 due to increased amortization of actuarial losses and reduced return on plan assets following the significant market-related decrease in the value of the related pension assets. We expect 2009 pension expense to be from $6.5 million to $7.5 million higher in 2009 than it was in 2008. Compensation expense decreased by $1.8 million year-over-year, reflecting reductions in staffing levels implemented in the first quarter of 2009 and a $1.4 million decrease in stock compensation expense because no awards were granted in the first quarter of 2009. Additionally, annual merit increases traditionally implemented in the first quarter of the fiscal year were deferred for most of our salaried employees. International operating expenses decreased $1.2 million from the prior year due to the stronger U.S. Dollar and its effect on the translation of foreign expenses.
In January 2009, we announced our intent to close our manufacturing facility in Milan, Tennessee, during the second quarter of 2009. Products previously manufactured in that facility will be produced in our other manufacturing facilities after the closure. During the first quarter of 2009, we recognized a total of $3.3 million in charges related to this plant closure, consisting of $2.0 million in asset impairment charges, $1.1 million in employee severance and benefit costs and $0.2 million in other expenses. Of these charges, $0.2 million are recognized in cost of goods sold on the Consolidated Statements of Income. The land and building are currently being marketed for sale, and are included in assets held for sale on the Consolidated Balance Sheets. The plant closure is expected to be consummated early in the second quarter of 2009, and we anticipate incurring additional charges of $0.5 million to $1.0 million related to the closure of our Milan facility.
Income from continuing operations in the first quarter of 2008 was $1.0 million, or $0.02 per diluted share, compared to $6.9 million, or $0.14 per diluted share, in the first quarter of 2008.
Read the The complete ReportBLT is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Richard Pzena of Pzena Investment Management LLC, Chris Davis of Davis Selected Advisers, Robert Olstein of Olstein Financial Alert Fund.
Blount International Inc. is an international manufacturing company with operations in three business segments: Outdoor Products Industrial and Power Equipment and Sporting Equipment. Headquartered in Montgomery Alabamatheir focus is on manufacturing products which offer superior competitive advantage and hold leading market share positions industry-leading distribution and exceptional customer service. Blount International Inc. has a market cap of $347.3 million; its shares were traded at around $7.29 with a P/E ratio of 9.5 and P/S ratio of 0.6.
Highlight of Business Operations:
On May 2, 2008, we acquired all of the outstanding stock of Carlton, a manufacturer of cutting chain for chainsaws located near Portland, Oregon. We paid a total of $66.2 million in cash for Carlton, including related acquisition costs of $1.5 million, and also assumed liabilities totaling $21.3 million. Carlton had $1.8 million in cash on the date of acquisition, resulting in a net cash outflow of $64.4 million for the acquisition. The acquisition was financed with a combination of cash on hand and $58.5 million borrowed under the Company s revolving credit facility. The operating results of Carlton are included in the Company s consolidated financial statements from May 2, 2008 forward. The Company accounted for the acquisition in accordance with FAS No. 141. Accordingly, Carlton s assets and liabilities were recorded at their estimated fair values on the date of acquisition.Sales in the three months ended March 31, 2009 decreased by $16.7 million (12.5%) from the same period in 2008. This sales decrease was primarily due to decreased unit volume of $21.7 million, notwithstanding the inclusion of $10.4 million in sales from Carlton in the first quarter of 2009 compared to no Carlton sales in the first quarter of 2008 which was prior to the acquisition. Partially offsetting this volume-related decrease in sales was $7.9 million of selling price and mix improvements. The translation of foreign currency-denominated sales transactions, given the stronger U.S. Dollar in comparison to the first quarter of 2008, reduced sales by $2.9 million in the comparative period. The Outdoor Products segment, including Carlton in the first quarter of 2009, experienced a $14.8 million (11.7%) decrease in sales during the first quarter of 2009 compared to 2008, while sales of gear components decreased $1.9 million (26.9%) during the same period. International sales decreased by $14.1 million (16.0%) and domestic sales decreased by $2.6 million (5.8%). The decrease in international sales reflected worldwide weakness in demand and poor market conditions, as well as the $2.9 million unfavorable impact to reported sales compared to 2008. The stronger U.S. Dollar has also contributed to a slowdown in orders from our international customers. The decrease in U.S. sales is attributed to poor economic conditions and weakness in demand for our products. We believe that most of our customers have reduced or delayed orders for our products, and reduced their existing inventories of our products, over their concerns about the state of the economy and lower order rates from their customers.
Consolidated order backlog at March 31, 2009 was $84.1 million compared to $103.5 million at December 31, 2008. Backlog in the Outdoor Products segment decreased $17.5 million, while the backlog for gear components decreased by $1.9 million during the first quarter of 2009.
SG&A was $25.2 million in the first quarter of 2009, compared to $24.9 million in the first quarter of 2008, representing an increase of $0.3 million (1%). As a percentage of sales, SG&A increased from 18.7% in 2008 to 21.6% in 2009, largely due to the sharp decrease in sales revenue. Professional services expense increased by $1.6 million due primarily to higher legal costs. Employee benefit expenses increased by $1.0 million, primarily due to higher costs for our U.S. and Canadian defined benefit pension plans. Expense for these plans is higher in 2009 than it was in 2008 due to increased amortization of actuarial losses and reduced return on plan assets following the significant market-related decrease in the value of the related pension assets. We expect 2009 pension expense to be from $6.5 million to $7.5 million higher in 2009 than it was in 2008. Compensation expense decreased by $1.8 million year-over-year, reflecting reductions in staffing levels implemented in the first quarter of 2009 and a $1.4 million decrease in stock compensation expense because no awards were granted in the first quarter of 2009. Additionally, annual merit increases traditionally implemented in the first quarter of the fiscal year were deferred for most of our salaried employees. International operating expenses decreased $1.2 million from the prior year due to the stronger U.S. Dollar and its effect on the translation of foreign expenses.
In January 2009, we announced our intent to close our manufacturing facility in Milan, Tennessee, during the second quarter of 2009. Products previously manufactured in that facility will be produced in our other manufacturing facilities after the closure. During the first quarter of 2009, we recognized a total of $3.3 million in charges related to this plant closure, consisting of $2.0 million in asset impairment charges, $1.1 million in employee severance and benefit costs and $0.2 million in other expenses. Of these charges, $0.2 million are recognized in cost of goods sold on the Consolidated Statements of Income. The land and building are currently being marketed for sale, and are included in assets held for sale on the Consolidated Balance Sheets. The plant closure is expected to be consummated early in the second quarter of 2009, and we anticipate incurring additional charges of $0.5 million to $1.0 million related to the closure of our Milan facility.
Income from continuing operations in the first quarter of 2008 was $1.0 million, or $0.02 per diluted share, compared to $6.9 million, or $0.14 per diluted share, in the first quarter of 2008.
Read the The complete ReportBLT is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Richard Pzena of Pzena Investment Management LLC, Chris Davis of Davis Selected Advisers, Robert Olstein of Olstein Financial Alert Fund.
