Contact: Calvin E. Jenness
Senior Vice President
Chief Financial Officer
And Treasurer
503-653-4573
Release: Immediately
BLOUNT REPORTS SECOND QUARTER EARNINGS
o Sales increase 6.4% in second quarter over 2002
o Outdoor Products segment sales, profit and backlog solidly ahead of last
year
o Lawnmower segment results weaker
o Refinancing of Senior Credit Facility completed
PORTLAND, OR, August 11, 2003- Blount International, Inc. [NYSE: BLT] ("Blount"
or the "Company") today reported results for the second quarter ended June 30,
2003. Sales for the quarter were $131.2 million, a 6.4% increase from sales in
last year's second quarter. Net loss for the quarter was $0.7 million ($.02 per
share) compared to a net income of $0.5 million ($.02 per share) in 2002. This
quarter's net loss includes $2.8 million in pre-tax charges related to the
extinguishment of debt in connection with the procurement of a new credit
facility in May. This charge was partially offset by a $0.1 million increase in
income from operations, a $0.4 million reduction in interest expense and reduced
income taxes of $0.7 million.
FIRST HALF RESULTS
The Company's sales through the first six months of 2003 were $254.1 million, an
increase of 10.5% from 2002. The sales growth was primarily a result of a 15.3%
increase in sales in our largest segment, the Outdoor Products segment. Net loss
for the first half was $0.2 million ($.01 per share) compared to a net loss of
$6.0 million ($.19 per share) for the comparable period last year. The
improvement in net loss is due to a $9.5 million improvement in income from
operations and lower interest expense of $1.0 million, partially offset by an
increase in charges related to the extinguishment of debt of $2.5 million and a
lower income tax benefit of $2.8 million. Last year's first six months operating
income was negatively impacted by $5.5 million in restructuring expense related
to the closure and relocation of the Company's corporate headquarters.
Commenting on the second quarter results, James S. Osterman, President and Chief
Executive Officer, stated, "Overall our sales trends were similar to what we
experienced in the first quarter. We continue to see the impact of greater
demand and favorable currency effects on the sales in our Outdoor Products
segment, a modest increase in sales within our Industrial and Power Equipment
segment and a general weakness in the Lawnmower segment. Profitability was flat
from last year, as the combination of higher selling and administrative costs,
related in part to higher employee benefit costs, and the reduced Lawnmower
sales offset the sales gains achieved in the Outdoor Products segment. As we
look forward to the second half of the year, we expect to see the Outdoor
Products segment sales and profit growth to moderate somewhat and the Industrial
and Power Equipment segment to improve seasonally as well as begin to show the
gains from our new marketing alliance with Caterpillar. With minimal improvement
in the Lawnmower segment anticipated, the Company's second half income from
operations is expected to be either in line or slightly better than last year.
In the second quarter we also successfully refinanced our Senior Credit
Facility."
-tables to follow-
SEGMENT RESULTS
The Outdoor Products segment reported second quarter sales of $87.9 million, a
14.2% increase from last year's sales of $77.0 million. Operating income for
this segment was $21.1 million, a 22.0% increase from last year's $17.3 million.
Sales continue to reflect strength in all major geographical markets, with
European market sales increasing the most significantly. The weaker US Dollar
this year in comparison to last year's second quarter continues to benefit this
segment's sales and profit results. Additionally, the increase in sales has
improved plant capacity leverage from a year ago. Backlog at the end of the
second quarter totaled $57.9 in comparison to $33.0 million last year. Segment
sales for the first six months were $173.1 million compared to $150.1 million
last year. Operating income through June of this year was $42.9 million compared
to $33.7 million last year.
The Lawnmower segment recorded second quarter sales of $10.2 million compared to
$13.5 million for the same period last year. Operating income in this segment
was $0.4 million, a decrease from last year's $1.6 million. This weaker
performance can be attributed to a reduction in unit shipments as both
competitive conditions and unfavorable weather patterns impacted spring sales.
Backlog is seasonally low at $0.1 million, equal to last year. The market
conditions in this segment remain difficult with significant competition and
general economic concerns. Through the first six months of 2003 the Lawnmower
segment's sales have totaled $18.1 million in comparison to $21.3 million last
year. Operating loss in 2003 was $0.3 million compared to operating income of
$1.3 million last year. Most of the lawnmower products have been remodeled for
the new model year. Early comments from our customers are positive.
The Industrial and Power Equipment segment's second quarter sales increased
slightly to $33.2 million from $32.8 million last year. The sales increase was
limited by a decline in the sales of gear components for the same period last
year. Operating income totaled $0.9 million in the second quarter of this year
compared to $1.4 million last year. Competitive discounting and weak gear
component sales were the major reasons of this profit decline. Backlog for this
segment as of the end of June was $28.5 million, up from $15.3 million in 2002.
Year to date segment sales were $63.1 million, a 6.4% increase from last year.
Segment operating profit for the first six months was $0.9 million compared to
$1.7 million last year.
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 (UNAUDITED) Three mos. ended Jun. 30 Six mos. ended Jun. 30
In millions, except share data 2003 2002 2003 2002
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Sales $ 131.2 $ 123.3 $ 254.1 $ 229.9
Cost of sales 86.5 81.2 166.6 150.9
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Gross profit 44.7 42.1 87.5 79.0
Selling, general and administrative expenses 25.4 23.0 49.7 45.4
Restructuring expenses 0.0 (0.1) 0.2 5.5
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Income from operations 19.3 19.2 37.6 28.1
Interest expense (17.7) (18.1) (35.3) (36.3)
Interest income 0.2 0.2 0.5 0.5
Other income (expense), net (3.0) (0.5) (3.1) (1.2)
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Income (loss) before income taxes (1.2) 0.8 (0.3) (8.9)
Provision (benefit) for income taxes (0.5) 0.3 (0.1) (2.9)
- ---------------------------------------------------------------------------------------------------------------------------
Net income (loss) $ (0.7) $ 0.5 $ (0.2) $ (6.0)
- ---------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share:
Basic $ (0.02) $ 0.02 $ (0.01) $ (0.19)
Diluted (0.02) 0.02 (0.01) (0.19)
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Shares used for per share computations:
Basic 30,808,010 30,795,882 30,801,946 30,795,882
Diluted 30,808,010 31,845,753 30,801,946 30,795,882
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) Jun. 30, Dec. 31,
In millions 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------
Assets
Cash and cash equivalents $ 24.7 $ 26.4
Accounts receivable 58.7 58.5
Inventory 64.3 64.8
Other current assets 42.1 41.5
Property, plant and equipment, net 90.9 90.7
Other assets 126.4 146.1
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Total assets $ 407.1 $ 428.0
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Liabilities
Notes payable and current maturities of long-term debt $ 5.0 $ 3.4
Other current liabilities 88.1 96.8
Long-term debt 606.2 624.1
Other liabilities 75.7 72.6
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Total liabilities 775.0 796.9
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Stockholders' equity (deficit) (367.9) (368.9)
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Total liabilities and stockholders' equity (deficit) $ 407.1 $ 428.0
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SEGMENT INFORMATION Three mos. ended Jun. 30 Six mos. ended Jun. 30
In millions 2003 2002 2003 2002
- ---------------------------------------------------------------------------------------------------------------------------
Sales
Outdoor products $ 87.9 $ 77.0 $ 173.1 $ 150.1
Lawnmower 10.2 13.5 18.1 21.3
Industrial and power equipment 33.2 32.8 63.1 59.3
Elimination (0.1) 0.0 (0.2) (0.8)
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$ 131.2 $ 123.3 $ 254.1 $ 229.9
- ---------------------------------------------------------------------------------------------------------------------------
Operating income (loss)
Outdoor products $ 21.1 $ 17.3 $ 42.9 $ 33.7
Lawnmower 0.4 1.6 (0.3) 1.3
Industrial and power equipment 0.9 1.4 0.9 1.7
Corporate office expenses/Elimination (3.1) (1.2) (5.7) (3.1)
Restructuring expenses 0.0 0.1 (0.2) (5.5)
- ---------------------------------------------------------------------------------------------------------------------------
Income from operations $ 19.3 $ 19.2 $ 37.6 $ 28.1
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