- Full year 2013 sales were $901 million and Adjusted EBITDA was $123 million
- Full year 2013 free cash flow of $67.6 million
- Non-cash intangible asset impairment charges of $24.9 million recorded in fourth quarter 2013
- Company reiterates 2014 guidance of $925 million to $950 million of sales and $130 million to $135 million of Adjusted EBITDA
PORTLAND, Ore., April 23, 2014 (GLOBE NEWSWIRE) -- Blount International, Inc. (NYSE:BLT) ("Blount" or "Company") today filed the Company's Annual Report on Form 10-K for the year ended December 31, 2013. The Company had previously disclosed that filing would be delayed beyond the required filing date of March 17, 2013.
For the full year 2013, Blount sales were $900.6 million, consistent with the Company's estimate provided in its news release on February 10, 2014. Adjusted EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) was $123.5 million, which was $1.5 million below the Company's previous estimate primarily due to higher than anticipated audit fees. Operating income was $37.5 million, which was below the estimate of $64 million primarily due to non-cash impairment charges related to goodwill and acquired intangible assets and the higher audit fees.
External audit fees were approximately $6 million representing an increase of approximately $1.5 million to the amount estimated in the Company's February 10, 2014 announcement of estimated 2013 results. Blount announced on April 15, 2014 that it had appointed KPMG as its new auditor. The Company expects 2014 audit fees to be less than $2.0 million, similar to levels experienced prior to 2013.
Results for the Quarter Ended December 31, 2013
Sales in the fourth quarter were $216.9 million, consistent with earlier estimated results, and represented a six percent decrease from the fourth quarter of 2012. Operating loss for the fourth quarter of 2013 was $16.5 million compared to operating income of $19.4 million in the fourth quarter of 2012. The operating loss in the fourth quarter of 2013 was driven by $24.9 million in non-cash asset impairment charges related to goodwill and other indefinite-life intangible assets, $4.0 million of incremental audit fees, and the result of lower sales in the fourth quarter of 2013 compared to the fourth quarter of 2012. In the fourth quarter 2013, the Company's net loss was $21.5 million, or ($0.43) per diluted share, compared to net income of $9.0 million, or $0.18 per diluted share, in the fourth quarter of 2012.
Full year 2013 sales were $900.6 million, a three percent decrease versus the full year 2012 results of $927.7 million. Operating income for full year 2013 was $37.5 million compared to $79.3 million in 2012. Lower operating income was driven by the non-cash impairment charges mentioned earlier and the result of lower sales and related, unfavorable fixed manufacturing overhead absorption. Net income for the full year 2013 was $4.8 million, or $0.10 per diluted share, compared to net income of $39.6 million, or $0.79 per diluted share, in 2012. Actual Sales and Adjusted EBITDA results for the Company's FLAG and FRAG segments were consistent with the estimates in the Company's 2013 guidance updates provided on February 10, 2014.
Reconciliation to Updated 2013 Guidance Provided February 10, 2014
Blount operates primarily in two business segments – the Forestry, Lawn, and Garden ("FLAG") segment and the Farm, Ranch, and Agriculture ("FRAG") segment. The Company reports separate results for the FLAG and FRAG segments. Blount's Concrete Cutting and Finishing ("CCF") business is included in "Corporate and Other."
The Company has posted a presentation on its website, www.blount.com, which provides detail of actual 2013 results as well as detailed 2013 segment results compared to 2012.
| Actual 2013 versus Estimated 2013 Results | |||
| (in millions; amounts may not sum due to rounding) | |||
| Full Year 2013 | |||
| Actual | Estimated | Difference | |
| Sales | $901 | $901 | -- |
| Operating Income | $38 | $64 | ($27) |
| Adjusted EBITDA | $123 | $125 | ($2) |
Actual Operating Income differs from estimated full year 2013 results by $26.5 million due to $24.9 million of non-cash impairment charges and approximately $1.5 in additional external audit fees. Actual Adjusted EBITDA differs by approximately $2.0 million primarily as a result of the $1.5 million of additional external audit fees.
2014 Guidance
The Company reiterated the 2014 guidance announced on February 10, 2014. Adjusted EBITDA for 2014 is expected to be $130 million to $135 million on sales of $925 million to $950 million. Blount expects to file its first quarter 2014 Form 10-Q by the normal deadline of May 12, 2014 and will hold a conference call to discuss the financial results for the first quarter of 2014 and updated 2014 outlook at that time.
Blount is a global manufacturer and marketer of replacement parts, equipment, and accessories for consumers and professionals operating primarily in two market segments: Forestry, Lawn, and Garden ("FLAG"); and Farm, Ranch, and Agriculture ("FRAG"). Blount also sells products in the construction markets and is the market leader in manufacturing saw chain and guide bars for chain saws. Blount has a global manufacturing and distribution footprint and sells its products in more than 115 countries around the world. Blount markets its products primarily under the OREGON®, Carlton®, Woods®, TISCO, SpeeCo®, and ICS® brands. For more information about Blount, please visit our website at http://www.blount.com.
"Forward looking statements" in this release, including without limitation Blount's "outlook," "expectations," "beliefs," "plans," "indications," "estimates," "anticipations," "guidance" and their variants, as defined by the Private Securities Litigation Reform Act of 1995, are based upon available information and upon assumptions that Blount believes are reasonable; however, these forward looking statements involve certain risks and should not be considered indicative of actual results that Blount may achieve in the future. In particular, among other things, guidance given in this release is expressly based upon certain assumptions concerning market conditions, foreign currency exchange rates, and raw material costs, especially with respect to the price of steel, the presumed relationship between backlog and future sales trends and certain income tax matters, as well as being subject to the uncertainty of the current global economic situation. To the extent that these assumptions are not realized going forward, or other unforeseen factors arise, actual results for the periods subsequent to the date of this announcement may differ materially.
| Blount International, Inc. Financial Data (Unaudited) | ||||
| Condensed Consolidated Statements of Income | ||||
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||
| (Amounts in thousands, except per share data) | 2012 | 2013 | 2012 | 2013 |
| Sales | $ 229,562 | $ 216,946 | $ 927,666 | $ 900,595 |
| Cost of sales | 167,018 | 161,258 | 671,451 | 658,633 |
| Gross profit | 62,544 | 55,688 | 256,215 | 241,962 |
| Selling, general, and administrative expenses | 43,131 | 45,836 | 170,535 | 173,516 |
| Facility closure & restructuring charges | — | 1,477 | 6,400 | 6,046 |
| Impairment of acquisition intangible assets | — | 24,879 | — | 24,879 |
| Operating income | 19,413 | (16,504) | 79,280 | 37,521 |
| Interest expense, net of interest income | (4,269) | (4,029) | (17,206) | (17,837) |
| Other income (expense), net | (494) | (799) | (284) | (2,120) |
| Income from continuing operations before income taxes | 14,650 | (21,332) | 61,790 | 17,564 |
| Provision for income taxes | 5,666 | 194 | 22,202 | 12,724 |
| Net income (Loss) | $ 8,984 | $ (21,526) | $ 39,588 | $ 4,840 |
| Basic income per share: | $ 0.18 | $ (0.43) | $ 0.81 | $ 0.10 |
| Diluted income per share: | $ 0.18 | $ (0.43) | $ 0.79 | $ 0.10 |
| Shares used for per share computations: | ||||
| Basic | 49,303 | 49,587 | 49,170 | 49,478 |
| Diluted | 50,033 | 50,217 | 49,899 | 50,122 |
| Free Cash Flow | Three Months Ended December 31, | Twelve Months Ended December 31, | ||
| (Amounts in thousands) | 2012 | 2013 | 2012 | 2013 |
| Net cash provided by operating activities | $ 13,529 | $ 14,701 | $ 52,436 | $ 97,055 |
| Net purchases of property, plant, and equipment | (14,239) | (6,857) | (52,892) | (29,411) |
| Free cash flow (Loss) | $ (710) | $ 7,844 | $ (456) | $ 67,644 |
| Segment Information | Three Months Ended December 31, | Twelve Months Ended December 31, | ||
| (Amounts in thousands) | 2012 | 2013 | 2012 | 2013 |
| Sales: | ||||
| FLAG | $ 165,854 | $ 147,731 | $ 650,480 | $ 613,105 |
| FRAG | 57,211 | 63,051 | 250,845 | 260,297 |
| Corporate and Other | 6,497 | 6,164 | 26,341 | 27,193 |
| Total sales | $ 229,562 | $ 216,946 | $ 927,666 | $ 900,595 |
| Operating income: | ||||
| FLAG | $ 26,218 | $ 16,343 | $ 108,255 | $ 83,215 |
| FRAG | (3,875) | (23,957) | (7,495) | (18,641) |
| Corporate and Other | (2,930) | (8,890) | (21,480) | (27,053) |
| Operating income | $ 19,413 | $ (16,504) | $ 79,280 | $ 37,521 |
| Condensed Consolidated Balance Sheets | December 31, | December 31, |
| (Amounts in thousands) | 2012 | 2013 |
| Assets: | ||
| Cash and cash equivalents | $ 50,267 | $ 42,797 |
| Accounts receivable | 128,444 | 110,807 |
| Inventories | 174,816 | 156,955 |
| Assets held for sale | — | 7,680 |
| Other current assets | 39,795 | 38,114 |
| Property, plant, and equipment, net | 177,702 | 164,194 |
| Other non-current assets | 334,267 | 295,804 |
| Total Assets | $ 905,291 | $ 816,351 |
| Liabilities: | ||
| Current maturities of long-term debt | $15,072 | $15,016 |
| Other current liabilities | 122,912 | 113,485 |
| Long-term debt, net of current maturities | 501,685 | 422,972 |
| Other long-term liabilities | 154,140 | 110,478 |
| Total liabilities | 793,809 | 661,951 |
| Stockholders' equity | 111,482 | 154,400 |
| Total Liabilities and Stockholders' Equity | $ 905,291 | $ 816,351 |
| Net debt (Current maturities plus Long-term debt less Cash and cash equivalents) | $ 466,490 | $ 395,191 |
| Sales and Adjusted EBITDA | ||||||||
| (Amounts may not sum due to rounding) | ||||||||
| Three Months Ended December 31, |
Forestry, Lawn and Garden |
Farm, Ranch, and Agriculture |
Corporate and Other |
Total Company |
||||
| 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | |
| (Amounts in thousands) | Actual | Actual | Actual | Actual | Actual | Actual | Actual | Actual |
| Total sales | $ 165,854 | $ 147,731 | $ 57,211 | $ 63,051 | $ 6,497 | $ 6,164 | $ 229,562 | $ 216,946 |
| Operating income | 26,218 | 16,343 | (3,875) | (23,957) | (2,930) | (8,890) | $ 19,413 | $ (16,504) |
| Depreciation | 5,933 | 6,254 | 1,143 | 1,447 | 104 | 1,821 | 7,180 | 9,522 |
| Non-cash acquisition accounting charges | 762 | 524 | 2,891 | 3,185 | — | — | 3,653 | 3,709 |
| Impairment charges | — | 3,292 | — | 21,587 | — | — | — | 24,879 |
| Stock compensation | — | — | — | — | 1,367 | 1,435 | 1,367 | 1,435 |
| Facility closure and restructuring charges | — | — | — | — | — | 1,477 | — | 1,477 |
| Other | — | — | — | — | — | — | — | — |
| Adjusted EBITDA | $ 32,913 | $ 26,413 | $ 159 | $ 2,262 | $ (1,459) | $ (4,157) | $ 31,613 | $ 24,518 |
| Twelve Months Ended December 31, |
Forestry, Lawn and Garden |
Farm, Ranch, and Agriculture |
Corporate and Other |
Total Company |
||||
| 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | 2012 | 2013 | |
| (Amounts in thousands) | Actual | Actual | Actual | Actual | Actual | Actual | Actual | Actual |
| Total sales | $ 650,480 | $ 613,105 | $ 250,845 | $ 260,297 | $ 26,341 | $ 27,193 | $ 927,666 | $ 900,595 |
| Operating income | 108,255 | 83,215 | (7,495) | (18,641) | (21,480) | $ (27,053) | $ 79,280 | $ 37,521 |
| Depreciation | 23,140 | 25,322 | 4,580 | 5,281 | 866 | 2,876 | 28,586 | 33,479 |
| Non-cash acquisition accounting charges | 3,539 | 2,055 | 12,458 | 12,698 | — | — | 15,997 | 14,753 |
| Impairment charges | — | 3,292 | — | 21,587 | — | 24,879 | ||
| Stock compensation | — | — | — | — | 5,592 | 5,607 | 5,592 | 5,607 |
| Facility closure and restructuring charges | — | — | — | — | 6,989 | 6,046 | 6,989 | 6,046 |
| Other | — | — | — | — | — | 1,196 | — | 1,196 |
| Adjusted EBITDA | $ 134,934 | $ 113,884 | $ 9,543 | $ 20,925 | $ (8,033) | $ (11,328) | $ 136,444 | $ 123,481 |
| Total Company | |||
| 2013 | 2014 | ||
| Twelve Months Ended December 31, | Actual | Outlook | |
| Total sales | $ 900,595 | $ 937,500 | |
| Operating income | $ 37,521 | $ 78,500 | |
| Depreciation | 33,479 | 34,000 | |
| Non-cash acquisition accounting charges | 14,753 | 12,000 | |
| Impairment charges | 24,879 | — | |
| Stock compensation | 5,607 | 6,000 | |
| Facility closure and restructuring charges(1) | 6,046 | 2,000 | |
| Other | 1,196 | — | |
| Adjusted EBITDA | $ 123,481 | $ 132,500 | |
| (1) The 2014 outlook includes approximately $1 million of cash transition costs and approximately $0.5 million of non-cash charges. | |||