FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
_______________________
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended November 30, 1993
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number 1-7002
BLOUNT, INC.
(Exact name of registrant as specified in its charter)
Delaware 63-0593908
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4520 Executive Park Drive 36116-1602
Montgomery, Alabama (Zip Code)
(Address of principal executive offices)
(205) 244-4000
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding at
Class of Common Stock November 30, 1993
- --------------------- -----------------
Class A Common Stock $1.00 Par Value 8,066,628 shares
Class B Common Stock $1.00 Par Value 4,288,897 shares
BLOUNT, INC. AND SUBSIDIARIES
INDEX
Part I. Financial Information
Consolidated Balance Sheets -
November 30, 1993 and February 28, 1993
Consolidated Statements of Income -
three months and nine months ended
November 30, 1993 and 1992
Consolidated Statements of Cash Flows -
nine months ended November 30, 1993
and 1992
Notes to Consolidated Financial Statements
Management's Discussion and Analysis
Exhibit 11 - Computation of Net Income
Per Common Share
BLOUNT, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
November 30, February 28,
1993 1993
------------ ------------
(Unaudited)
ASSETS
------
Current assets:
Cash and cash equivalents, including short-term
investments of $61,060 and $15,223 $ 66,229 $ 17,723
Accounts receivable, net of allowances for
doubtful accounts of $2,157 and $2,563 127,627 117,956
Inventories 53,878 55,900
Costs and recognized profits in excess of
billings on uncompleted contracts 5,326 2,230
Deferred income taxes 4,485 2,178
Other current assets 9,940 22,160
--------- ---------
Total current assets 267,485 218,147
Property, plant and equipment, net of accumulated
depreciation of $133,091 and $121,251 137,479 149,061
Cost in excess of net assets of acquired businesses, net 60,644 62,065
Other assets 17,367 17,878
--------- ---------
Total Assets $ 482,975 $ 447,151
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Notes payable and current maturities of long-term debt $ 1,503 $ 6,097
Accounts payable 71,400 66,292
Accrued expenses 77,720 70,741
Billings in excess of costs and recognized
profits on uncompleted contracts 12,850 16,677
--------- ---------
Total current liabilities 163,473 159,807
Long-term debt, exclusive of current maturities 107,767 82,046
Deferred income taxes, exclusive of current portion 12,595 12,966
Other liabilities 36,080 37,261
--------- ---------
Total liabilities 319,915 292,080
--------- ---------
Commitments and Contingent Liabilities
Shareholders' equity:
Common Stock: par value $1.00 per share
Class A: 8,066,628 and 7,883,630 shares issued 8,067 7,884
Class B: 4,288,897 and 4,345,537 shares issued 4,289 4,346
Capital in excess of par value of stock 8,297 6,773
Retained earnings 135,263 128,833
Accumulated translation adjustment 7,144 7,235
--------- ---------
Total shareholders' equity 163,060 155,071
--------- ---------
Total Liabilities and Shareholders' Equity $ 482,975 $ 447,151
========= =========
<FN>
The accompanying notes are an integral part of these statements.
BLOUNT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
Three months ended Nine months ended
November 30, November 30,
------------------- -------------------
1993 1992 1993 1992
---- ---- ---- ----
(Unaudited) (Unaudited)
Revenues $ 54,337 $ 74,673 $172,962 $214,182
Sales 127,563 119,468 363,317 318,234
-------- -------- -------- --------
Total sales and revenues 181,900 194,141 536,279 532,416
-------- -------- -------- --------
Cost of revenues 55,139 74,018 180,804 206,838
Cost of sales 82,143 79,833 240,299 219,511
Selling, general and
administrative expenses 31,553 29,675 89,971 86,061
-------- -------- -------- --------
Total costs and operating
expenses 168,835 183,526 511,074 512,410
-------- -------- -------- --------
Income from operations 13,065 10,615 25,205 20,006
Interest expense, net (2,433) (2,409) (7,372) (8,013)
Other expense, net (588) (1,002) (1,708) (1,615)
-------- -------- -------- --------
Income before income taxes 10,044 7,204 16,125 10,378
Provision for income taxes 3,373 2,859 5,805 4,255
-------- -------- -------- --------
Income before extraordinary gain (loss) 6,671 4,345 10,320 6,123
Extraordinary gain (loss) on repurchase
of debt, net (119) 92 (119)
-------- -------- -------- --------
Net income $ 6,671 $ 4,226 $ 10,412 $ 6,004
======== ======== ======== ========
Income (loss) per share of common stock:
Income before extraordinary gain (loss) $ .52 $ .35 $ .81 $ .50
Extraordinary gain (loss) (.01) .01 (.01)
-------- -------- -------- --------
Net income $ .52 $ .34 $ .82 $ .49
======== ======== ======== ========
Weighted average number of
common shares outstanding 12,757,610 12,255,466 12,681,567 12,156,920
========== ========== ========== ==========
Cash dividends paid per share:
Class A Common Stock $ .1125 $ .1125 $ .3375 $ .3375
======== ======== ======== ========
Class B Common Stock $ .10 $ .10 $ .30 $ .30
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these statements.
BLOUNT, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
Nine months ended November 30,
------------------------------
1993 1992
---- ----
(Unaudited)
Cash Flows From Operating Activities:
Net Income $10,412 $ 6,004
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary (gain) loss (92) 119
Depreciation, amortization and other noncash charges 17,675 17,872
Provision (benefit) for deferred income taxes (2,678) (5,254)
Loss on sales of property, plant and equipment 1,227 424
Changes in operating assets and liabilities:
Increase (decrease) in aggregate balance of accounts
receivable sold (17,637) 9,925
Decrease in accounts receivable 7,966 2,906
Decrease in inventories 2,022 10,705
Increase in costs and recognized profits
in excess of billings on uncompleted contracts (3,096) (385)
(Increase) decrease in other assets 13,908 (3,123)
Increase in accounts payable 5,108 13,951
Increase in accrued expenses 7,220 5,645
Increase (decrease) in other liabilities (5,092) 8,113
-------- --------
Net cash provided by operating activities 36,943 66,902
-------- --------
Cash Flows From Investing Activities:
Proceeds from sales of facilities and
property, plant and equipment 494 10,154
Purchases of property, plant and equipment (5,017) (9,549)
-------- --------
Net cash provided by (used in) investing activities (4,523) 605
-------- --------
Cash Flows From Financing Activities:
Net reduction in short-term borrowings (2,767) (14,897)
Issuance of long-term debt 97,388
Reductions of long-term debt (75,168) (26,982)
Dividends paid (3,982) (3,906)
Issuance of stock under stock option and
dividend reinvestment plans 615 91
-------- --------
Net cash provided by (used in) financing activities 16,086 (45,694)
-------- --------
Net increase in cash and cash equivalents 48,506 21,813
Cash and cash equivalents at beginning of period 17,723 6,632
-------- --------
Cash and cash equivalents at end of period $ 66,229 $ 28,445
======== ========
<FN>
The accompanying notes are an integral part of these statements.
BLOUNT, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly the financial position at
November 30, 1993 and the results of operations and cash flows for the periods
ended November 30, 1993 and 1992. These financial statements should be read
in conjunction with the notes to the financial statements included in Blount,
Inc.'s Annual Report to Shareholders for the year ended February 28, 1993.
The results of operations for the periods ended November 30, 1993 and 1992 are
not necessarily indicative of the results to be expected for the full fiscal
year, due to the seasonal nature of certain of the Company's operations and
the timing of the recognition of income from claims and profits and losses on
construction projects under the percentage of completion method of accounting.
Note 2 Inventories consist of the following (in thousands):
November 30, February 28,
1993 1993
------------ ------------
Finished goods $ 23,784 $ 25,826
Work in process 12,166 12,495
Raw materials and supplies 17,928 17,579
-------- --------
$ 53,878 $ 55,900
======== ========
Note 3 The summarized combined financial position and results of operations
of joint ventures in which the Company holds a less than majority interest are
as follows (in thousands):
November 30, February 28,
Financial Position 1993 1993
------------ ------------
ASSETS
Cash and short-term investments $ 11,581 $ 13,395
Contract and other receivables 7 44,019
Other assets 170
-------- --------
$ 11,588 $ 57,584
======== ========
LIABILITIES AND PARTNERS' EQUITY
Accounts payable and accrued liabilities $ 4,357 $ 19,842
Payable to related parties 1,586 1,532
Partners' equity 5,645 36,210
-------- --------
$ 11,588 $ 57,584
======== ========
Results of Operations
Three Months Nine Months
Ended November 30, Ended November 30,
------------------ ------------------
1993 1992 1993 1992
---- ---- ---- ----
Sales and revenues (including
interest of $285, $107, $747
and $369) $ 285 $ 107 $ 1,733 $ 369
Costs and expenses (14,700)
------- ------- ------- -------
Income before income taxes 285 107 16,433 369
Provision for income taxes 128 48 7,395 166
------- ------- ------- -------
Net income $ 157 $ 59 $ 9,038 $ 203
======= ======= ======= =======
As a result of the resolution of certain contract contingencies, the most
significant joint venture reduced estimated contract costs by approximately
$14.7 million during the nine months ended November 30, 1993.
Distributions to the Company from these joint ventures were $21.2 million
during the three months and nine months ended November 30, 1993 and minimal
during the prior fiscal year. The Company's equity in income before income
taxes of these joint ventures was minimal and $7.3 million during the three
months and nine months ended November 30, 1993, respectively, and minimal
during the three months and nine months ended November 30, 1992. At November
30, 1993 and February 28, 1993, the Company's equity in undistributed earnings
of these joint ventures, which is included in other current assets in the
Company's balance sheets, was $3.2 million and $17.1 million, respectively.
Note 4 In July 1993, the Company issued 9% senior subordinated notes ("the 9%
notes") in the principal amount of $100,000,000 maturing on June 15, 2003.
The 9% notes are redeemable at the election of the Company, in whole or in
part, at any time on or after June 15, 1998, initially at 103 3/8% of the
principal amount and thereafter at prices declining to par on June 15, 2001.
The 9% notes were issued under an indenture ("the indenture") between the
Company and a major bank as trustee. The indenture restricts the Company's
ability to incur additional debt, pay dividends, make certain investments,
dispose of assets, create liens on assets and merge or consolidate with
another entity. The majority of the net proceeds from the 9% notes were used
to retire the Company's 12% subordinated notes in the principal amount of
$73.6 million. In conjunction with the retirement of the 12% subordinated
notes, an interest rate swap, accounted for as a hedge of part of the retired
debt, was effectively terminated. The extraordinary gain on retirement of the
12% subordinated notes and termination of the interest rate swap was $92
thousand, net of taxes of $49 thousand.
Note 5 The Company announced in January 1989, that a pocket of a cleaning
solvent, trichloroethylene ("TCE"), had been detected under the concrete floor
of the Company's cutting systems division plant in Milwaukie, Oregon. TCE was
detected in the City of Milwaukie drinking water wells. The Company's deep
wells, which are surrounded by the City of Milwaukie wells, draw from the same
aquifer and show TCE amounts less than those of the City's wells. On December
6, 1989, the Company entered into a Stipulation and Consent Agreement for
facility investigation with the Department of Environmental Quality ("DEQ") of
the State of Oregon and agreed to investigate the TCE contamination beneath
the plant and take appropriate measures to remediate potential adverse effects
from such contamination. In November 1992, the Company submitted a Facility
Investigation Final Report ("Report") to the DEQ for the Milwaukie, Oregon
plant. The Report states that the contamination has affected a limited
portion of the saturated engineered fill under the building. Since monitoring
began in 1988, the contaminant plume in the engineered fill has not migrated.
The concentration of the contaminants in the plume has been reduced by greater
than 50% since 1989. The TCE plume has not migrated off Company property.
The Company believes it poses no risk to Company employees or the community
because the groundwater within the shallow alluvium is not used and the
contaminants are not migrating towards the drinking water supply aquifer.
There is no evidence that the Company's operations have affected the drinking
water supply aquifer. The Company does not expect the situation to have a
material adverse effect.
The United States Environmental Protection Agency ("EPA") has designated a
predecessor of the Company as a potentially responsible party ("PRP") with
respect to the Onalaska Municipal Landfill in Onalaska, Wisconsin. The waste
complained of was placed in the landfill prior to 1981 by a corporation, some
of whose assets were purchased in 1981 by the predecessor of the Company. It
is the view of the Company that because its predecessor corporation purchased
assets rather than stock, the Company does not have successor liability and is
not properly a PRP. However, the EPA has indicated it does not accept this
position. The Company believes the EPA is wrong on the successor liability
issue. However, with other PRP's, the Company made a good faith offer to the
EPA to pay a portion of the clean-up costs. The offer was rejected and the
EPA is proceeding with the clean-up. The estimated clean-up costs are
approximately $5 million with maintenance costs of approximately $150 thousand
per year for 30 years. The Company does not expect the situation to have a
material adverse effect.
On December 20, 1989, the Company sold to Asea Brown Boveri Ltd. ("ABB") all
the stock of W+E Umwelttechnik AG, then an engineering subsidiary of the
Company in the waste-to-energy business located in Zurich, Switzerland. On
July 26, 1993, ABB filed a Request for Arbitration with the Zurich Chamber of
Commerce. The request contains statements that ABB has or anticipates having
losses on two projects which were underway at the time of sale. While it is
not clear, ABB appears to be claiming approximately 100 Million Swiss francs
and rescission of the purchase agreement based on alleged wilful failure to
disclose material facts. Executives of the two companies have discussed the
matter and were not able to resolve it. The matter will proceed to mediation
and then, if necessary, the arbitration may proceed. The Company believes it
has valid defenses based on the terms of the purchase agreement, the facts and
the law. The Company does not expect the situation to have a material adverse
effect on its financial condition.
The Company is a defendant in a number of product liability lawsuits involving
serious injuries for which it is self-insured, some of which seek significant
or unspecified damages. In addition, the Company is a party to a number of
other suits arising out of the conduct of the Company's business. While there
can be no assurance as to their ultimate outcome, the Company does not believe
these lawsuits will have a material adverse effect on its financial condition.
The Company's contingencies include normal liabilities for performance and
completion of construction contracts. At November 30, 1993, the Company had
outstanding bank letters of credit in the approximate amount of $23.3 million
issued principally in connection with various construction contracts for which
the Company is contingently liable to the issuing banks in the event payment
is demanded by the holder.
The Company is contingently liable for approximately $750 thousand for
receivables sold under receivable sale or floor plan arrangements.
The Company is contingently liable for the remaining rental payments, net of
the value of the leased equipment, under certain leases transferred to the
buyer of a former subsidiary. The leases have rental payments remaining of
approximately $11.1 million which expire in 1999. The Company has received
indemnification against liabilities arising from the leases from the purchaser
of the former subsidiary.
See Notes 3 and 9 to the Consolidated Financial Statements included in Blount,
Inc.'s Annual Report to Shareholders for the year ended February 28, 1993 for
other commitments and contingencies of the Company which have not changed
significantly since year-end.
Note 6 Segment information is as follows (in thousands):
Three Months Nine Months
Ended November 30, Ended November 30,
------------------ ------------------
1993 1992 1993 1992
---- ---- ---- ----
Sales and revenues:
Manufacturing
Outdoor products $ 63,442 $ 63,606 $181,267 $161,904
Industrial and power equipment 41,612 35,207 119,736 97,222
Sporting equipment 22,509 20,655 62,314 59,108
-------- -------- -------- --------
Total manufacturing 127,563 119,468 363,317 318,234
Construction 54,337 74,673 172,962 214,182
-------- -------- -------- --------
$181,900 $194,141 $536,279 $532,416
======== ======== ======== ========
Operating income (loss):
Manufacturing
Outdoor products $ 11,972 $ 9,411 $ 26,131 $ 14,989
Industrial and power equipment 6,635 3,924 17,878 9,754
Sporting equipment 4,007 2,745 10,114 6,585
-------- -------- -------- --------
Total manufacturing 22,614 16,080 54,123 31,328
Construction (2,480) (2,187) (14,626) (1,253)
-------- -------- -------- --------
Operating income from segments 20,134 13,893 39,497 30,075
Corporate office expenses (7,069) (3,278) (14,292) (10,069)
-------- -------- -------- --------
Income from operations 13,065 10,615 25,205 20,006
Interest expense, net (2,433) (2,409) (7,372) (8,013)
Other expense, net (588) (1,002) (1,708) (1,615)
-------- -------- -------- --------
Income before income taxes $ 10,044 $ 7,204 $ 16,125 $ 10,378
======== ======== ======== ========
Note 7 Income taxes paid during the nine months ended November 30, 1993 and
1992 were $11.0 million and $4.8 million. Interest paid during the nine
months ended November 30, 1993 and 1992 was $7.8 million and $6.7 million.
Note 8 Net income per common share is based on the weighted average number of
common and common equivalent shares (stock options and performance shares)
outstanding in each period.
MANAGEMENT'S DISCUSSION AND ANALYSIS
Operating Results
Sales and revenues for the third quarter and first nine months of fiscal 1994
were $181.9 million and $536.3 million compared to $194.1 million and $532.4
million for the third quarter and first nine months of fiscal 1993. Net
income for the third quarter and first nine months of fiscal 1994 amounted to
$6.7 million ($.52 per share) and $10.4 million ($.82 per share) compared to
net income of $4.2 million ($.34 per share) and $6.0 million ($.49 per share)
for the comparable periods of fiscal 1993. Net income for the nine months
ended November 30, 1993 includes an extraordinary gain on repurchase of debt
of $92 thousand ($.01 per share). Net income for the third quarter of the
prior fiscal year included an extraordinary loss on repurchase of debt of $119
thousand ($.01 per share). The improved operating results reflect continued
strong performance by the Company's manufacturing units partially offset by
losses from construction. The principal reasons for these results and the
status of the Company's financial condition are set forth below and should be
read in conjunction with the Company's 1993 Form 10-K and 1993 Annual Report
to Shareholders.
Sales for the Outdoor Products segment in the third quarter and first nine
months of fiscal 1994 were $63.4 million and $181.3 million compared to $63.6
million and $161.9 million during the third quarter and first nine months of
fiscal 1993. Operating income increased to $12.0 million and $26.1 million
during the third quarter and first nine months of fiscal 1994 from $9.4
million and $15.0 million in the comparable periods of the prior fiscal year.
The third quarter increase in operating income was achieved on level sales
reflecting improved margins from cost reductions and lower selling, general
and administrative expenses. The year-to-date income increase was principally
attributable to a higher volume of saw chain sold by the Company's Oregon
Cutting Systems Division, improved margins and improved demand for the
Company's riding lawn mowers and related accessories.
Sales for the Industrial and Power Equipment segment were $41.6 million and
$119.7 million during the third quarter and first nine months of fiscal 1994
compared to $35.2 million and $97.2 million during the same periods of fiscal
1993. Operating income increased to $6.6 million and $17.9 million during the
third quarter and first nine months of fiscal 1994 from $3.9 million and $9.8
million during the comparable periods of fiscal 1993. Demand for this
segment's products remained high as the aggregate volume of timber harvesting
and industrial tractor and loader units sold during fiscal 1994 increased over
the comparable periods of the prior year. The improvement in operating income
was principally due to this increase in volume.
Sales for the Sporting Equipment segment increased by $1.9 million and $3.2
million in the third quarter and first nine months of fiscal 1994 over the
comparable periods of fiscal 1993. Operating income during the third quarter
and first nine months of fiscal 1994 increased by $1.3 million and $3.5
million over the comparable periods of fiscal 1993. The increases in
operating income were principally due to increased volume in the third quarter
and income recognized in the first quarter of fiscal 1994 upon finalizing a
license and technical assistance agreement with a foreign company. The
agreement is expected to lead to future product sales as well as royalties.
Construction revenues declined by $20.3 million and $41.2 million in the third
quarter and first nine months of fiscal 1994 compared to the same periods in
fiscal 1993. The reduced revenues reflect both lower domestic and foreign
revenues in the current year. Construction revenues from foreign operations
were $1.2 million and $7.2 million in the third quarter and first nine months
of fiscal 1994. The construction segment incurred operating losses of $2.5
million and $14.6 million in the third quarter and first nine months of fiscal
1994. These results include a small foreign loss in the third quarter
resulting from reduced revenues and income from foreign operations of $5.9
million in the first nine months of fiscal 1994, derived principally from the
recognition of $7.2 million operating income from previously completed foreign
construction projects. The current year's construction losses reflect the
declining revenues, project cost overruns, and unabsorbed overhead expenses.
The restoration of consistent profitability to this segment depends on the
ability to significantly increase the backlog of profitable new projects.
Many of the factors which negatively impacted recent domestic construction
results, including the general state of the domestic construction market, are
not expected to improve in the near term. Construction backlog was $121.6
million at November 30, 1993 as compared to $204.7 million at February 28,
1993.
Corporate office expenses increased by approximately $3.8 million in the third
quarter of fiscal 1994 over the comparable period of the prior year,
reflecting the accrual of expected legal costs and increased accruals for
management incentive plans resulting from the Company's improved earnings and
increased stock price.
The Company's total backlog at November 30, 1993 was $264.2 million compared
to $272.0 million at February 28, 1993.
Financial Condition, Liquidity and Capital Resources
At November 30, 1993, the Company had no amounts outstanding under its
uncommitted short-term lines of credit. The Company's total capitalization at
November 30, 1993 consists of $107.8 million long-term debt and equity of
$163.1 million for a long-term debt to equity ratio of .7 to 1 as compared to
a ratio of .5 to 1 at February 28, 1993. In July 1993, the Company issued 9%
senior subordinated notes ("the 9% notes") due 2003 in the principal amount of
$100 million (see Note 4 of Notes to the attached Consolidated Financial
Statements). In August 1993, the majority of the proceeds from the 9% notes
was used to retire $73.6 million 12% subordinated notes due 1996. In June
1993, the Company increased the amount that can be borrowed under its
revolving credit agreement from $50 million to $60 million. At November 30,
1993, no amounts were outstanding under the revolving credit agreement. Since
issuing the 9% notes, the Company has temporarily discontinued the sale of
receivables under a receivable sale agreement with a major bank under which
the Company can sell up to $25 million of eligible receivables. See Note 3 of
Notes to the Consolidated Financial Statements included in Blount, Inc.'s 1993
Annual Report to Shareholders for the terms and conditions of the revolving
credit agreement and the receivable sale agreement.
Working capital was $104.0 million at November 30, 1993 compared to $58.3
million at February 28, 1993. The principal reasons for this increase were
the Company's earnings and operating cash flows for the first nine months of
the current fiscal year and the excess proceeds from the 9% notes over the
amount utilized to retire the 12% subordinated notes. The Company's operating
cash flows for the first nine months of fiscal 1994 were $36.9 million
compared to $66.9 million in the first nine months of the prior fiscal year.
This reduction in operating cash flows is primarily due to the reduced sales
of receivables under the Company's receivable sale agreement. Cash and cash
equivalent balances increased to $66.2 million from $17.7 million at February
28, 1993, reflecting the Company's operating cash flows, excess proceeds from
the 9% notes and distributions from a foreign joint venture.
Restrictions on the Company's ability to pay cash dividends are contained in
the indenture related to the 9% notes and in certain financial covenants of
the revolving credit agreement. Under the most restrictive requirement,
retained earnings of approximately $11.8 million were available for the
payment of dividends at November 30, 1993.
In November 1992, the Financial Accounting Standards Board issued Statement
No. 112, "Employers Accounting for Postemployment Benefits", which requires
the accrual of the cost of benefits to former or inactive employees after
employment but before retirement. The Company's required adoption date is
March 1, 1994. The impact of adoption on the Company's operating results and
financial position is not expected to be material.
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, INC.
- ----------------------
Registrant
Date: January 10, 1994 /s/ Harold E. Layman
---------------------------------
Harold E. Layman
Senior Vice President &
Chief Financial Officer