Contact: Calvin E. Jenness
Senior Vice President
Chief Financial Officer
And Treasurer
503-653-4573
Release: Immediately
BLOUNT ANNOUNCES SECOND QUARTER EARNINGS
o Sales increased 29.0% from last year's second quarter
o Operating income increased by 47.7% from the comparable period in
2003
o Order Backlog increased 4.8% during the quarter to $130.3
million
PORTLAND, OR, July 19, 2004- Blount International, Inc. [NYSE: BLT] ("Blount"
or the "Company") today announced results for the second quarter ended June
30, 2004. Sales for the quarter were $169.2 million, a 29.0% increase from
sales in last year's second quarter of $131.2 million. Second quarter
operating income increased by 47.7%, to $28.5 million, from $19.3 million in
the comparable period of 2003. Depreciation and amortization for the second
quarter were $3.8 million, as compared to $3.2 million in the comparable
period of 2003. Net income for the second quarter was $8.0 million ($.24 per
diluted share) compared to a net loss of $0.7 million ($.02 per share) in the
comparable period of 2003. The year-over-year improvement in sales and
profitability was primarily due to double-digit percentage increases in unit
volumes for all three of the Company's business segments.
FIRST HALF RESULTS
The Company's sales through the first six months of 2004 were $334.8 million,
an increase of 31.8% from the same period last year. The sales growth included
year-over-year business segment increases of 69.7% for the Industrial and
Power Equipment segment, 31.5% for the Lawnmower segment and 18.0% for the
Outdoor Products segment. Operating income in the first half of 2004 increased
by 48.1%, to $55.7 million, from $37.6 million in the first half of last year.
Depreciation and amortization in the first half of 2004 were $7.6 million, as
compared to $6.5 million in the first half of 2003. Net income for the first
half of 2004 was $14.9 million ($.45 per diluted share) compared to a net loss
of $0.2 million ($.01 per share) for the comparable period last year. The
improvement in net income was due to an $18.1 million improvement in operating
income, partially offset by a higher income tax expense of $6.5 million. Net
income for the first half of last year was negatively impacted by $2.8 million
in charges related to the extinguishment of debt.
Commenting on the second quarter results, James S. Osterman, President and
Chief Executive Officer, stated, "We are extremely pleased with our
performance in the second quarter. We have seen substantial volume increases
in all three of our businesses as we have been able to leverage our strong
market share positions in the improving business climate. Our largest segment,
Outdoor Products, recorded its second consecutive quarter of sales in excess
of $100 million, as worldwide demand for all product lines remained robust.
The Industrial and Power Equipment segment's sales grew by nearly 60% from
last year's second quarter due to incremental distribution, both domestically
and internationally. Most encouraging is the 4.8% increase in order backlog
generated during the quarter, representing the sixth consecutive quarter that
we have seen an increase. "
-tables to follow-
<page>
SEGMENT RESULTS
The Outdoor Products segment's second quarter sales were $102.2 million, a
16.3% increase from last year's second quarter sales of $87.9 million. Segment
contribution to operating income for this segment was $26.1 million, a 23.7%
increase from last year's $21.1 million. The second quarter sales represented
an all time high for the segment, slightly surpassing the record level set in
this year's first quarter. The improvement in sales was across all major
geographic markets, product lines and channels. The demand for chain saw
products is strong and the Company has benefited from the relative weakness of
the United States dollar. Backlog at the end of the second quarter of 2004
totaled $77.3 million in comparison to $57.9 million at the end of last year's
second quarter and $73.0 million at the end of this year's first quarter.
Segment sales for the first six months were $204.3 million, compared to $173.1
million for the first six months of last year. Segment contribution to
operating income for the first six months of this year was $52.4 million,
compared to $42.9 million for the comparable period last year.
The Industrial and Power Equipment segment recorded second quarter sales of
$53.1 million, an increase of 59.9% from sales in last year's second quarter
of $33.2 million. Segment contribution to operating income increased to $4.8
million in this year's second quarter from $0.9 million in last year's second
quarter. Sales were bolstered by incremental sales of the Timberking line
through the Company's alliance with Caterpillar Inc. Additionally, sales of
the Company's branded products improved with the strengthening of the domestic
forestry market. Order backlog at the end of the second quarter was $52.8
million, compared to $28.5 million as of June 2003, and $49.5 million at the
end of the first quarter of 2004. Through the first six months of 2004, the
Industrial and Power Equipment segment's sales totaled $107.1 million in
comparison to $63.1 million last year. Segment contribution to operating
income for the first six months of 2004 was $9.6 million, compared to $0.9
million for the same period last year.
The Lawnmower segment's second quarter sales increased by 39.2%, to $14.2
million, from $10.2 million in last year's second quarter. Segment
contribution to operating income in the second quarter of 2004 was $1.5
million, compared to $0.4 million last year. The sales and profitability
increases reflected a solid spring selling season due in part to the
introduction of a new product line. Backlog for the segment at the end of June
was seasonally low at $0.2 million, compared to $0.1 million in June of 2003.
Year-to-date segment sales were $23.8 million, a 31.5% increase from last
year. Segment contribution to operating income for the first six months was
$1.3 million, compared to a $0.3 million loss for the same period last year.
BALANCE OF 2004 AND 2005 OUTLOOK
The Company's outlook for the remainder of 2004 remains positive. With a
strong on-order position, favorable currency outlook and continued strong
demand for timber harvesting equipment, sales are anticipated to increase by
approximately 10% in the second half of 2004 over the second half of 2003. For
the full year 2004, sales are anticipated to be approximately $665 to $675
million and operating income is anticipated to be approximately $103 to $107
million. Given current market and economic conditions, the Company anticipates
that in 2005 sales will increase by between 6% to 8% from 2004, with operating
income increasing by between 10% to 13%.
Blount International, Inc. is a diversified international company operating in
three principal business segments: Outdoor Products, Industrial and Power
Equipment and Lawnmower. 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, include without limitation the
Company's "outlook," "expectations," "beliefs," "plans," "indications,"
"estimates," "anticipations," and their variants, as defined by the Private
Securities Litigation Reform Act of 1995. The forward looking statements in
this release are based upon available information and upon assumptions that
the Company believes are reasonable , however, these forward looking
statements involve certain risks and should not be considered indicative of
actual results that the Company may achieve in the future. Actual results for
the periods subsequent to the date of this release may differ materially.
-tables to follow-
<page>
Exhibit 99.1
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 2004 2003 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
Sales $ 169.2 $ 131.2 $ 334.8 $ 254.1
- ---------------------------------------------------------------------------------------------------------------------------
Cost of sales 110.9 86.5 219.5 166.6
- ---------------------------------------------------------------------------------------------------------------------------
Gross profit 58.3 44.7 115.3 87.5
Selling, general and administrative expenses 29.8 25.4 59.6 49.7
Restructuring expenses 0.0 0.0 0.0 0.2
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Operating Income 28.5 19.3 55.7 37.6
Interest expense (17.2) (17.7) (34.6) (35.3)
Interest income 0.2 0.2 0.2 0.5
Other income (expense), net (0.1) (3.0) 0.0 (3.1)
- ---------------------------------------------------------------------------------------------------------------------------
Income before income taxes 11.4 (1.2) 21.3 (0.3)
Provision for income taxes 3.4 (0.5) 6.4 (0.1)
- ---------------------------------------------------------------------------------------------------------------------------
Net income $ 8.0 $ (0.7) $ 14.9 $ (0.2)
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Basic earnings per share: $ 0.26 $ (0.02) $ 0.48 $ (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Diluted earnings per share: $ 0.24 $ (0.02) $ 0.45 $ (0.01)
- ---------------------------------------------------------------------------------------------------------------------------
Shares used for per share computations:
Basic 30,936,116 30,808,010 30,897,971 30,801,946
Diluted 32,973,463 30,808,010 32,888,139 30,801,946
- ---------------------------------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) Jun. 30, Dec. 31,
In millions 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
Assets:
Cash and cash equivalents $ 37.4 $ 35.2
Accounts receivable 73.9 64.4
Inventory 78.3 67.7
Other current assets 25.3 26.1
Property, plant and equipment, net 92.2 92.0
Other assets 113.3 115.0
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 420.4 $ 400.4
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities:
Notes payable and current maturities of long-term debt $ 158.0 $ 6.6
Other current liabilities 111.5 103.4
Long-term debt 449.6 603.9
Other liabilities 83.7 83.8
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Total liabilities 802.8 797.7
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Stockholders' equity (deficit) (382.4) (397.3)
- ---------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity (deficit) $ 420.4 $ 400.4
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SEGMENT INFORMATION (UNAUDITED) Three mos. ended Jun. 30 Six mos. ended Jun. 30
In millions 2004 2003 2004 2003
- ---------------------------------------------------------------------------------------------------------------------------
Sales
Outdoor products $ 102.2 $ 87.9 $ 204.3 $ 173.1
Industrial and power equipment 53.1 33.2 107.1 63.1
Lawnmower 14.2 10.2 23.8 18.1
Elimination (0.3) (0.1) (0.4) (0.2)
- ---------------------------------------------------------------------------------------------------------------------------
Total Sales $ 169.2 $ 131.2 $ 334.8 $ 254.1
- ---------------------------------------------------------------------------------------------------------------------------
Operating income (loss)
Outdoor products $ 26.1 $ 21.1 $ 52.4 $ 42.9
Industrial and power equipment 4.8 0.9 9.6 0.9
Lawnmower 1.5 0.4 1.3 0.3)
Corporate office expenses/Elimination (3.9) (3.1) (7.6) (5.7)
Restructuring expenses 0.0 0.0 0.0 (0.2)
- ---------------------------------------------------------------------------------------------------------------------------
Operating income $ 28.5 $ 19.3 $ 55.7 $ 37.6
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