Contact: Calvin E. Jenness
Senior Vice President
Chief Financial Officer
And Treasurer
503-653-4573
Release: Immediately
BLOUNT REPORTS FIRST QUARTER EARNINGS
o Sales increase of 15% over 2002
o Outdoor Products segment operating income increase of $5.4 million
o Lawnmower segment and Industrial and Power Equipment segment
profitability decline
PORTLAND, OR, May 13, 2003- Blount International, Inc. [NYSE: BLT] ("Blount"
or the "Company") today reported results for the first quarter ended March 31,
2003. Sales for the quarter were $122.9 million, a 15.3% increase from sales
in last year's first quarter. Net income in the quarter was $0.5 million ($.02
per share) compared to a net loss of $6.5 million ($.21 per share) in 2002.
Last year's net loss included $5.6 million in restructuring expense related to
the relocation of the Company's headquarters during 2002. The improvement in
net income from 2002 is primarily due to an increase in segment operating
income of $4.6 million and lower restructuring expense of $5.4 million,
partially offset by higher income taxes of $3.5 million.
Commenting on the first quarter results, James S. Osterman, President and
Chief Executive Officer, stated, "Overall our results were in line with our
expectations. The robust demand for our chain products more than offset the
market softness in our Lawnmower and Industrial and Power Equipment segments.
A weaker U.S dollar provided for some of the sales momentum in the chain
business. Although our shipments of forestry equipment increased from last
year, discount levels remained high, leading to a reduced segment operating
income. Our Lawnmower segment experienced a slight increase in sales but a
decline in profit as we saw a shift in product mix to units with lower prices
and margins."
SEGMENT RESULTS
Beginning with the first quarter of 2003, the Company will report operational
results in three segments: Outdoor Products, Lawnmower, and Industrial and
Power Equipment. This change reflects the establishment of the Company's Dixon
operations as the Lawnmower segment. Historically, the Dixon results were
included in the Outdoor Products segment. All historical amounts have been
realigned to reflect this change.
The Outdoor Products segment reported first quarter sales of $85.2 million, a
16.6% increase from last year's sales of $73.1 million. Operating income for
this segment was $21.8 million, an increase from last year's $16.4 million.
Sales were up in all major geographical markets including both the replacement
and OEM channels. This year over year improvement is a change from last year's
first quarter when the segment experienced a sales decline of 12.0% from the
prior year comparable quarter. The two- year sales growth for the Outdoor
Products segment in the first quarter was 2.6%. Backlog increased to $51.2
million from $30.1 million in last year's first quarter.
The Lawnmower segment recorded first quarter sales of $7.9 million compared to
$7.8 million last year. Net operating loss in this segment was $0.7 million,
an increase from last year's loss of $0.3 million.
-tables to follow-
Segment sales increased due to higher unit shipments from a year ago, as a
result of a new entry level model that was introduced in mid-2002. The
increase in net loss reflects a shift towards the lower priced units as well
as higher employee benefit expenses. Backlog remains low at $0.5 million
compared to $0.2 million last year. The market conditions in this segment
remain difficult with significant competition and general economic concerns.
The Industrial and Power Equipment segment posted a first quarter sales
increase of 12.8 % to $29.9 million from $26.5 million last year. Sales
increased with an increase in units sold; however, higher discounting led to a
reduction in margins. For the quarter, the segment broke even in profitability
compared to operating income of $0.3 million in 2002. The gear components
business contributed the majority of the profit decline as the construction
and utility markets for that product line remain weak. Backlog for this
segment as of March 31 was $9.4 million, down from $15.1 million in 2002.
Blount International, Inc. is a diversified international company operating in
three principal business segments: Outdoor Products, Lawnmower and Industrial
and Power Equipment. 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 in this release, including without limitation the
Company's "expectations", "beliefs", "plans", "indications","estimates",
"anticipations", and their variants, as defined by the Private Securities
Litigation reform act of 1995, involve certain risks and actual results
subsequent to the date of this announcement may differ materially.
-tables to follow-
BLOUNT INTERNATIONAL, INC. FINANCIAL DATA
CONSOLIDATED STATEMENTS OF INCOME Three mos. ended Mar. 31
In millions, except share data 2003 2002
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Sales $ 122.9 $ 106.6
Cost of sales 80.1 69.7
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Gross profit 42.8 36.9
Selling, general and administrative expenses 24.3 22.4
Restructuring expenses 0.2 5.6
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Income from operations 18.3 8.9
Interest expense (17.6) (18.2)
Interest income 0.3 0.3
Other income (expense), net (0.1) (0.6)
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Income (loss) before income taxes 0.9 (9.6)
Provision (benefit) for income taxes 0.4 (3.1)
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Net income (loss) $ 0.5 $ (6.5)
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Basic earnings (loss) per share:
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Net income (loss) $ 0.02 $ (0.21)
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Diluted earnings (loss) per share:
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Net income (loss) $ 0.01 $ (0.21)
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Shares used for per share computations:
Basic 30,795,882 30,795,882
Diluted 32,016,114 30,795,882
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CONDENSED CONSOLIDATED BALANCE SHEETS Mar. 31, Dec. 31,
In millions 2003 2002
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Assets
Cash and cash equivalents $ 11.9 $ 26.4
Accounts receivable 65.5 58.5
Inventory 64.2 64.8
Other current assets 61.2 41.5
Property, plant and equipment, net 91.4 90.7
Other assets 120.5 146.1
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Total assets $ 414.7 $ 428.0
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Liabilities
Notes payable and current maturities of long-term debt $ 3.5 $ 3.4
Other current liabilities 80.9 96.8
Long-term debt 624.2 624.1
Other liabilities 74.4 72.6
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Total liabilities 783.0 796.9
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Stockholders' equity (deficit) (368.3) (368.9)
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Total liabilities and stockholders' equity (deficit) $ 414.7 $ 428.0
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SEGMENT INFORMATION Three mos. ended Mar. 31
In millions 2003 2002
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Sales
Outdoor products $ 85.2 $ 73.1
Lawnmower 7.9 7.8
Industrial and power equipment 29.9 26.5
Elimination (0.1) (0.8)
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$ 122.9 $ 106.6
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Operating income (loss)
Outdoor products $ 21.8 $ 16.4
Lawnmower (0.7) (0.3)
Industrial and power equipment 0.0 0.3
Corporate office expenses/Elimination (2.6) (1.9)
Restructuring expenses (0.2) (5.6)
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Income from operations $ 18.3 $ 8.9
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