UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 5, 2007
BLOUNT INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware | | 001-11549 | | 63 0780521 |
(State or other jurisdiction of | | (Commission File Number) | | (I.R.S. Employer |
incorporation) | | | | Identification No.) |
| | | | |
4909 SE International Way, Portland, Oregon | | 97222-4679 |
(Address of principal executive offices) | | (Zip Code) |
Registrant’s telephone number, including area code: (503) 653-8881
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-Commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Explanatory Note: This Form 8-K/A amends the Registrant’s Current Report on Form 8-K dated November 5, 2007, as originally filed with the Commission on November 13, 2007. This amendment reflects updated assumptions for pro forma adjustments that were originally prepared on a preliminary basis. This amendment solely provides an update of the pro forma information included under Item 9.01. Item 9.01 of the Registrant’s Current Report on Form 8-K dated November 5, 2007, as originally filed with the Commission on November 13, 2007, is herby replaced in its entirety by Item 9.01 contained herein. All other items of the original Form 8-K are unchanged.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS
The following unaudited pro forma condensed consolidated balance sheet and statements of operations are presented to illustrate the estimated effects of the sale of substantially all of the assets and operations of the Forestry Division and the repayment of debt. The unaudited pro forma condensed consolidated balance sheet is presented as if the Transaction that occurred on November 5, 2007 had occurred on September 30, 2007. The unaudited pro forma condensed consolidated statements of operations are presented as if the Transaction had occurred on January 1, 2006. The unaudited pro forma condensed consolidated financial information should be read in conjunction with our historical consolidated financial statements and notes thereto appearing in our annual report on Form 10-K for the year ended December 31, 2006, and our unaudited condensed consolidated financial statements and notes thereto appearing in our quarterly report on Form 10-Q for the nine months ended September 30, 2007.
The unaudited pro forma condensed consolidated financial information is presented for illustrative purposes only and does not purport to be indicative of the financial condition and results of operations that would have been achieved had the sale and repayment of debt for which we are giving pro forma effect actually occurred on the dates referred to above or indicative of the financial condition and results of operations that may be expected in the future. Such information has been prepared based upon currently available information and assumptions that our management believes are reasonable. Such currently available information and assumptions may prove to be inaccurate over time. Capitalized terms used herein but not otherwise defined herein have the meanings ascribed to such terms in the Registrant’s Current Report on Form 8-K dated November 5, 2007, as originally filed with the Commission on November 13, 2007.
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Blount International, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Balance Sheet
As of September 30, 2007
| | Pro Forma Adjustments | |
(Amounts in thousands) | | Historical | | Sale of Forestry Division (a) | | Debt Payment (d) | | Pro forma | |
Assets | | | | | | | | | |
Current assets | | | | | | | | | |
Cash and cash equivalents | | $ | 33,623 | | $ | 73,600 | | $ | (32,850 | ) | $ | 74,373 | |
Accounts receivable, net | | 93,887 | | (19,452 | ) | — | | 74,435 | |
Inventories, net | | 90,262 | | (23,194 | ) | — | | 67,068 | |
Deferred income taxes | | 14,925 | | (4,118 | )(b) | — | | 10,807 | |
Other current assets | | 11,938 | | 2,498 | | — | | 14,436 | |
Total current assets | | 244,635 | | 29,334 | | (32,850 | ) | 241,119 | |
Property, plant & equipment, net | | 99,835 | | (9,717 | ) | — | | 90,118 | |
Goodwill | | 71,892 | | (22,908 | ) | — | | 48,984 | |
Deferred financing costs | | 11,633 | | — | | 600 | | 12,233 | |
Deferred income taxes | | 18,688 | | 1,162 | (b) | — | | 19,850 | |
Assets held for sale | | 1,500 | | — | | — | | 1,500 | |
Other Assets | | 24,240 | | 6,110 | | — | | 30,350 | |
Total Assets | | $ | 472,423 | | $ | 3,981 | | $ | (32,250 | ) | $ | 444,154 | |
| | | | | | | | | |
Liabilities and Stockholders’ Deficit | | | | | | | | | |
Current liabilities: | | | | | | | | | |
Current maturities of long-term debt | | $ | 1,500 | | $ | — | | $ | — | | $ | 1,500 | |
Accounts payable | | 38,657 | | (12,451 | ) | — | | 26,206 | |
Accrued expenses | | 64,266 | | 10,222 | (c) | — | | 74,488 | |
Deferred income taxes | | 126 | | — | | — | | 126 | |
Total current liabilities | | 104,549 | | (2,229 | ) | — | | 102,320 | |
Long-term debt, excluding current maturities | | 353,500 | | — | | (32,250 | ) | 321,250 | |
Deferred income taxes | | 898 | | — | | — | | 898 | |
Employee benefit obligations | | 58,649 | | (2,800 | ) | — | | 55,849 | |
Other liabilities | | 32,915 | | — | | — | | 32,915 | |
Total liabilities | | 550,511 | | (5,029 | ) | (32,250 | ) | 513,232 | |
Commitments and contingent liabilities | | | | | | | | | |
Total stockholders’ deficit | | (78,088 | ) | 9,010 | | — | | (69,078 | ) |
Total Liabilities and Stockholders’ Deficit | | $ | 472,423 | | $ | 3,981 | | $ | (32,250 | ) | $ | 444,154 | |
(a) | To reflect the elimination of assets sold to, and liabilities assumed by Caterpillar Inc. in connection with the sale of the Company’s Forestry Division on November 5, 2007, as if the transaction occurred on September 30, 2007. Assumes pro forma cash proceeds of $77.9 million, including amounts set aside under escrow agreements, and accrual of income taxes and transaction costs. |
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(b) | To record effect on deferred taxes related to the sale of the Forestry Division. |
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(c) | To show unpaid transaction fees and taxes, less other accrued expenses assumed by Caterpillar. |
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(d) | To show usage of gross proceeds for the payment of debt and amendment of credit agreements. |
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Blount International, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Statements of Income
Nine Months Ended September 30, 2007
| | Pro Forma Adjustments | |
(Amounts in thousands, except per share data) | | Historical | | Forestry Division (a) | | Other | | Pro forma | |
Sales | | $ | 481,349 | | $ | 99,761 | | $ | 2,161 | (b) | $ | 383,749 | |
Cost of sales | | 331,603 | | 80,298 | | 2,187 | (b) | 253,492 | |
Gross profit | | 149,746 | | 19,463 | | (26 | ) | 130,257 | |
Selling, general and administrative expenses | | 86,929 | | 15,625 | | (504 | )(c) | 70,800 | |
Operating income (loss) | | 62,817 | | 3,838 | | 478 | | 59,457 | |
Interest income | | 872 | | 53 | | — | | 819 | |
Interest expense | | (25,260 | ) | (1 | ) | — | | (25,259 | ) |
Other income (expense), net | | 715 | | — | | — | | 715 | |
Income from continuing operations before income taxes | | 39,144 | | 3,890 | | 478 | | 35,732 | |
Provision for income taxes | | 13,800 | | 1,494 | | 184 | (d) | 12,490 | |
Income from continuing operations | | $ | 25,344 | | $ | 2,396 | | $ | 294 | | $ | 23,242 | |
| | | | | | | | | |
Basic income per share: | | $ | 0.53 | | | | | | $ | 0.49 | |
| | | | | | | | | |
Diluted income per share: | | $ | 0.53 | | | | | | $ | 0.48 | |
| | | | | | | | | |
Weigted average shares used in per share calculations: | | | | | | | | | |
Basic | | 47,276 | | | | | | 47,276 | |
Diluted | | 48,068 | | | | | | 48,068 | |
| | | | | | | | | | | | | | | |
(a) | Represents exclusion of the results of operations of the Forestry Division. A nonrecurring pro forma gain has not been included in the pro forma income statement. The actual gain, when determined, will be reported within discontinued operations in the historical income statement in the Company’s annual report on Form 10-K for the year ending December 31, 2007. |
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(b) | To recognize intercompany sale of product between other business units and the Forestry Division. |
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(c) | To reflect stock compensation expense applicable to employees of discontinued operations. |
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(d) | To record the impact of the pre-tax pro forma adjustments at the statutory tax rate. |
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Blount International, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Statements of Income
Year Ended December 31, 2006
| | Pro Forma Adjustments | |
(Amounts in thousands, except per share data) | | Historical | | Forestry
Division (a) | | Other | | Pro forma | |
Sales | | $ | 651,064 | | $ | 167,316 | | $ | 3,746 | (b) | $ | 487,494 | |
Cost of sales | | 446,636 | | 136,546 | | 3,725 | (b) | 313,815 | |
Gross profit | | 204,428 | | 30,770 | | 21 | | 173,679 | |
Selling, general and administrative expenses | | 111,197 | | 21,033 | | (692 | )(c) | 89,472 | |
Retirement plan redesign | | 3,747 | | — | | — | | 3,747 | |
Plant closure costs | | 1,216 | | 1,216 | | — | | — | |
Operating income | | 88,268 | | 8,521 | | 713 | | 80,460 | |
Interest income | | 381 | | 3 | | — | | 378 | |
Interest expense | | (35,782 | ) | — | | — | | (35,782 | ) |
Other income (expense), net | | 1,549 | | 214 | | — | | 1,335 | |
Income from continuing operations before income taxes | | 54,416 | | 8,738 | | 713 | | 46,391 | |
Provision for income taxes | | 16,349 | | 2,834 | | 231 | (d) | 13,746 | |
Income from continuing operations | | $ | 38,067 | | $ | 5,904 | | $ | 482 | | $ | 32,645 | |
| | | | | | | | | |
Basic income per share: | | $ | 0.81 | | | | | | $ | 0.69 | |
| | | | | | | | | |
Diluted income per share: | | $ | 0.80 | | | | | | $ | 0.68 | |
| | | | | | | | | |
Weigted average shares used in per share calculations: | | | | | | | | | |
Basic | | 47,145 | | | | | | 47,145 | |
Diluted | | 47,868 | | | | | | 47,868 | |
| | | | | | | | | | | | | | |
(a) | Represents exclusion of the results of operations of the Forestry Division. A nonrecurring pro forma gain has not been included in the pro forma income statement. The actual gain, when determined, will be reported within discontinued operations in the historical income statement in the Company’s annual report on Form 10-K for the year ending December 31, 2007. |
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(b) | To recognize intercompany sale of product between other business units and the Forestry Division. |
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(c) | To reflect stock compensation expense applicable to employees of discontinued operations. |
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(d) | To record the impact of the pre-tax pro forma adjustments at the statutory tax rate. |
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Blount International, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Statements of Income
Year Ended December 31, 2005
| | Pro Forma Adjustments | |
(Amounts in thousands, except per share data) | | Historical | | Forestry
Division (a) | | Other | | Pro forma | |
Sales | | $ | 702,256 | | $ | 227,490 | | $ | 4,063 | (b) | $ | 478,829 | |
Cost of sales | | 474,171 | | 180,462 | | 4,038 | (b) | 297,747 | |
Gross profit | | 228,085 | | 47,028 | | 25 | | 181,082 | |
Selling, general and administrative expenses | | 110,294 | | 20,840 | | — | | 89,454 | |
Operating income | | 117,791 | | 26,188 | | 25 | | 91,628 | |
Interest income | | 622 | | — | | — | | 622 | |
Interest expense | | (37,329 | ) | — | | — | | (37,329 | ) |
Other income (expense), net | | (905 | ) | 58 | | — | | (963 | ) |
Income from continuing operations before income taxes | | 80,179 | | 26,246 | | 25 | | 53,958 | |
Provision (benefit) for income taxes | | (24,528 | ) | 9,737 | | 9 | (c) | (34,256 | ) |
Income from continuing operations | | $ | 104,707 | | $ | 16,509 | | $ | 16 | | $ | 88,214 | |
| | | | | | | | | |
Basic income per share: | | $ | 2.27 | | | | | | $ | 1.91 | |
| | | | | | | | | |
Diluted income per share: | | $ | 2.20 | | | | | | $ | 1.86 | |
| | | | | | | | | |
Weigted average shares used in per share calculations: | | | | | | | | | |
Basic | | 46,094 | | | | | | 46,094 | |
Diluted | | 47,535 | | | | | | 47,535 | |
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(a) | | Represents exclusion of the results of operations of the Forestry Division. A nonrecurring pro forma gain has not been included in the pro forma income statement. The actual gain, when determined, will be reported within discontinued operations in the historical income statement in the Company’s annual report on Form 10-K for the year ending December 31, 2007. |
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(b) | | To recognize intercompany sale of product between other business units and the Forestry Division. |
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(c) | | To record the impact of the pre-tax pro forma adjustments at the statutory tax rate. |
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Blount International, Inc. and Subsidiaries
Pro Forma Unaudited Consolidated Statements of Income
Year Ended December 31, 2004
| | Pro Forma Adjustments | |
(Amounts in thousands, except per share data) | | Historical | | Forestry
Division (a) | | Other | | Pro forma | |
Sales | | $ | 642,975 | | $ | 201,974 | | $ | 4,339 | (b) | $ | 445,340 | |
Cost of sales | | 422,068 | | 158,590 | | 4,298 | (b) | 267,776 | |
Gross profit | | 220,907 | | 43,384 | | 41 | | 177,564 | |
Selling, general and administrative expenses | | 109,590 | | 21,291 | | — | | 88,299 | |
Operating income | | 111,317 | | 22,093 | | 41 | | 89,265 | |
Interest income | | 2,272 | | — | | — | | 2,272 | |
Interest expense | | (61,280 | ) | 11 | | — | | (61,291 | ) |
Other income (expense), net | | (39,703 | ) | 3,942 | | — | | (43,645 | ) |
Income from continuing operations before income taxes | | 12,606 | | 26,046 | | 41 | | (13,399 | ) |
Provision (benefit) for income taxes | | 8,058 | | 9,940 | | 16 | (c) | (1,866 | ) |
Income from continuing operations | | $ | 4,548 | | $ | 16,106 | | $ | 25 | | $ | (11,533 | ) |
| | | | | | | | | |
Basic income (loss) per share: | | $ | 0.12 | | | | | | $ | (0.32 | ) |
| | | | | | | | | |
Diluted income (loss) per share: | | $ | 0.12 | | | | | | $ | (0.32 | ) |
| | | | | | | | | |
Weigted average shares used in per share calculations: | | | | | | | | | |
Basic | | 36,413 | | | | | | 36,413 | |
Diluted | | 38,474 | | | | | | 36,413 | |
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(a) | Represents exclusion of the results of operations of the Forestry Division. A nonrecurring pro forma gain has not been included in the pro forma income statement. The actual gain, when determined, will be reported within discontinued operations in the historical income statement in the Company’s annual report on Form 10-K for the year ending December 31, 2007. |
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(b) | To recognize intercompany sale of product between other business units and the Forestry Division. |
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(c) | To record the impact of the pre-tax pro forma adjustments at the statutory tax rate. |
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SIGNATURE
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, thereunto duly authorized.
BLOUNT INTERNATIONAL, INC. | |
Registrant | |
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/s/ Calvin E. Jenness | | |
Calvin E. Jenness | |
Senior Vice President and | |
Chief Financial Officer | |
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Dated: February 8, 2008 | |
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