Blount International Inc. (BLT, Financial) filed Quarterly Report for the period ended 2009-06-30.
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 $465.5 million; its shares were traded at around $9.76 with a P/E ratio of 12.7 and P/S ratio of 0.8.
Sales in the three months ended June 30, 2009 decreased by $41.1 million (26.5%) from the same period in 2008. This sales decrease was primarily due to decreased unit volume of $44.3 million. $6.6 million of selling price and mix improvements partially offset this volume-related decrease in sales. The translation of foreign currency-denominated sales transactions, given the stronger U.S. Dollar in comparison to the second quarter of 2008, reduced consolidated sales by $3.4 million in the comparative period. International sales decreased by $32.6 million (30.9%) and domestic sales decreased by $8.4 million (17.0%). The decrease in international sales reflected worldwide weakness in demand and poor market conditions related to the global recession, as well as the unfavorable effects from movement in foreign currency exchange rates compared to 2008. We have continued to be cautious about extending credit to certain higher risk geographical areas during the current global recession, which we believe has contributed to a slowdown in sales and orders from our international customer base. 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 June 30, 2009 was $80.5 million compared to $84.1 million at March 31, 2009. Backlog in the Outdoor Products segment decreased $2.8 million, while the backlog for gear components decreased by $0.8 million during the second quarter of 2009.
Gross profit decreased $14.7 million (29.8%) from the second quarter of 2008 to the second quarter of 2009. Much lower sales volume and increases in product costs were partially offset by improved pricing and mix and the net favorable effects of movement in foreign currency exchange rates. The higher product costs included higher year-over-year steel costs, estimated at $1.2 million, which represent a moderated pace compared to our first quarter 2009 experience. Our manufacturing costs were also adversely affected during the second quarter of 2009 by lower production volumes, including a higher number of idle manufacturing days, which caused lower absorption rates and higher period expenses for fixed and semi-variable manufacturing costs. Gross margin in the second quarter of 2009 was 30.4% of sales compared to 31.8% in 2008. Gross margin was favorably affected by improved pricing and mix, as well as the net favorable foreign exchange effects, offset by the negative gross margin impact of lower production levels.
SG&A was $24.0 million in the second quarter of 2009, compared to $27.6 million in the second quarter of 2008, representing a decrease of $3.6 million (13.0%). As a percentage of sales, SG&A increased from 17.8% in the second quarter of 2008 to 21.1% in the second quarter of 2009. This increase as a percent of sales was due to the sharp decrease in sales revenue. Compensation expense decreased by $2.2 million year-over-year, reflecting reductions in staffing levels implemented in the first half of 2009 and a $0.3 million decrease in stock compensation expense because no awards have been granted to date in 2009. Additionally, annual merit increases traditionally implemented in the first quarter of the fiscal year were deferred for many of our employees. Employee benefit expenses increased by $1.1 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 experienced during 2008. Our provision for bad debts increased by $0.8 million in the comparable quarterly periods, as the global recession has adversely affected our expectations for the collectability of some of our receivables. Depreciation expense was $0.9 million lower in 2009 than in the comparable quarter, primarily because
Income from continuing operations in the second quarter of 2009 was $4.2 million, or $0.09 per diluted share, compared to $10.2 million, or $0.21 per diluted share, in the second 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, Robert Olstein of Olstein Financial Alert Fund, Chris Davis of Davis Selected Advisers.
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 $465.5 million; its shares were traded at around $9.76 with a P/E ratio of 12.7 and P/S ratio of 0.8.
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 Companys revolving credit facility. The operating results of Carlton are included in the Companys consolidated financial statements from May 2, 2008 forward. The Company accounted for the acquisition in accordance with FAS No. 141. Accordingly, Carltons assets and liabilities were recorded at their estimated fair values on the date of acquisition.Sales in the three months ended June 30, 2009 decreased by $41.1 million (26.5%) from the same period in 2008. This sales decrease was primarily due to decreased unit volume of $44.3 million. $6.6 million of selling price and mix improvements partially offset this volume-related decrease in sales. The translation of foreign currency-denominated sales transactions, given the stronger U.S. Dollar in comparison to the second quarter of 2008, reduced consolidated sales by $3.4 million in the comparative period. International sales decreased by $32.6 million (30.9%) and domestic sales decreased by $8.4 million (17.0%). The decrease in international sales reflected worldwide weakness in demand and poor market conditions related to the global recession, as well as the unfavorable effects from movement in foreign currency exchange rates compared to 2008. We have continued to be cautious about extending credit to certain higher risk geographical areas during the current global recession, which we believe has contributed to a slowdown in sales and orders from our international customer base. 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 June 30, 2009 was $80.5 million compared to $84.1 million at March 31, 2009. Backlog in the Outdoor Products segment decreased $2.8 million, while the backlog for gear components decreased by $0.8 million during the second quarter of 2009.
Gross profit decreased $14.7 million (29.8%) from the second quarter of 2008 to the second quarter of 2009. Much lower sales volume and increases in product costs were partially offset by improved pricing and mix and the net favorable effects of movement in foreign currency exchange rates. The higher product costs included higher year-over-year steel costs, estimated at $1.2 million, which represent a moderated pace compared to our first quarter 2009 experience. Our manufacturing costs were also adversely affected during the second quarter of 2009 by lower production volumes, including a higher number of idle manufacturing days, which caused lower absorption rates and higher period expenses for fixed and semi-variable manufacturing costs. Gross margin in the second quarter of 2009 was 30.4% of sales compared to 31.8% in 2008. Gross margin was favorably affected by improved pricing and mix, as well as the net favorable foreign exchange effects, offset by the negative gross margin impact of lower production levels.
SG&A was $24.0 million in the second quarter of 2009, compared to $27.6 million in the second quarter of 2008, representing a decrease of $3.6 million (13.0%). As a percentage of sales, SG&A increased from 17.8% in the second quarter of 2008 to 21.1% in the second quarter of 2009. This increase as a percent of sales was due to the sharp decrease in sales revenue. Compensation expense decreased by $2.2 million year-over-year, reflecting reductions in staffing levels implemented in the first half of 2009 and a $0.3 million decrease in stock compensation expense because no awards have been granted to date in 2009. Additionally, annual merit increases traditionally implemented in the first quarter of the fiscal year were deferred for many of our employees. Employee benefit expenses increased by $1.1 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 experienced during 2008. Our provision for bad debts increased by $0.8 million in the comparable quarterly periods, as the global recession has adversely affected our expectations for the collectability of some of our receivables. Depreciation expense was $0.9 million lower in 2009 than in the comparable quarter, primarily because
Income from continuing operations in the second quarter of 2009 was $4.2 million, or $0.09 per diluted share, compared to $10.2 million, or $0.21 per diluted share, in the second 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, Robert Olstein of Olstein Financial Alert Fund, Chris Davis of Davis Selected Advisers.
