Blount Announces Preliminary Second Quarter 2015 Results
PORTLAND, Ore., Aug. 05, 2015 (GLOBE NEWSWIRE) — Blount International, Inc. (NYSE:BLT) (“Blount” or “Company”) today announced preliminary results for the second quarter ended June 30, 2015. Full Release
Preliminary Results for the Quarter Ended June 30, 2015
Sales in the second quarter were $212.7 million, a decrease of $22.7 million or 9.6 percent compared to the second quarter of 2014. Operating loss for the second quarter of 2015 was $47.3 million, including a $62 million non-cash impairment charge, compared to operating income of $22.4 million in the same quarter last year. Consolidated Adjusted EBITDA for the second quarter of 2015 was $26.9 millioncompared to $34.8 million in the second quarter of 2014. Preliminary second quarter net loss was $49.5 million, or $1.02 per diluted share, compared to net income of $12.3 million, or $0.25 per diluted share, in the same quarter last year. The net loss reflects a preliminary non-cash impairment charge for certain intangible assets and related estimated income tax impact.
“We continued to experience significant currency-related headwinds in the second quarter driven by the strength of the U.S. Dollar,” stated Josh Collins, Blount’s Chairman and CEO. “Our sales were impacted by the translation of non-U.S. Dollar transactions, and our sales volumes were affected by lower demand from non-U.S. customers that pay in U.S. Dollars. We are also experiencing a sharp cyclical downturn in the North American agriculture market, which has negatively impacted sales in most parts of our FRAG business. In response to the lower demand, we have reduced production rates, primarily at ourPortland, Oregon forestry plant, and we are actively managing our spending and staffing while maintaining our strategic investments.”
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.”
Farm, Ranch, and Agriculture
The FRAG segment reported second quarter 2015 sales of
Forestry, Lawn, and Garden
The FLAG segment had second quarter 2015 sales of $146.4 million, which was $13.7 million lower than the second quarter of 2014. Second quarter 2015 sales were down in nearly all geographies, primarily as the result of foreign currency translation impacts. Sales volumes were down slightly due to the pressure of a stronger U.S. Dollar and soft sales to OEMs, primarily in North America. Sales decreased by approximately 10 percent in Europe, five percent in North America, six percent in Asia, and five percent in all other geographies combined. Aside from currency translation impacts and reduced sales volumes, the FLAG segment also experienced reduced average selling prices in certain markets. The reductions are mostly due to lowering selling prices to ease the impact of a stronger U.S. Dollar on those customers located outside of the U.S. that pay in U.S. Dollars.
2015 Financial Outlook
The continued strength of the U.S. Dollar has overridden historic patterns of sales volume growth, particularly in the FLAG segment. The Company has significant foreign sales denominated in U.S. Dollars. As a result, many of the Company's products are effectively priced higher for customers. Additionally, the global agriculture machinery market continues to be soft. As a result of the continued currency headwind and soft market conditions, the Company has revised its estimate for fiscal year 2015 sales and Adjusted EBITDA. The Company expects sales to range between $840 million and $880 million, operating income to range between $55 million to $70 million, excluding asset impairments, and Adjusted EBITDA to range between $105 million and $120 million. The Company's outlook for sales assumes FLAG segment sales decline eight percent to 12 percent and FRAG segment sales decline between five percent and 10 percent, both compared to 2014 levels. In the 2015 guidance, steel material costs are expected to decrease by $1 million to $2 million compared to 2014. At recent U.S. Dollar currency trading levels, the impact of translating foreign operation to U.S. Dollars is expected to be approximately neutral to operating income and Adjusted EBITDA. Free cash flow in 2015 is expected to range between $30 million and $40 million, after approximately $30 million to $40 million of capital expenditures. Interest expense is expected to be approximately $15 million to $16 million in 2015.