Blount Announces 1Q Results
Blount International, Inc. announced results for the first quarter ended March 31, 2012, and updated its outlook for 2012. Sales in the first quarter were $226.3 million, a 25% increase from the first quarter of 2011. Excluding the impact of businesses acquired since January 1, 2011, sales declined 4%.
Operating income for the first quarter of 2012 was $13.6 million compared to $27.8 million in the prior year. Businesses acquired since January 1, 2011 increased sales by $52.2 million and increased operating income by $0.6 million in the first quarter of 2012 compared to the prior year. First quarter net income was $5.9 million, compared to $15.6 million, in the first quarter of 2011. First quarter 2012 operating income includes non-cash charges of $4.4 million related to accounting for acquisitions, an increase of $2.2 million from the first quarter of 2011. Additionally, consolidation of existing operations into Blount’s new Kansas City, MO distribution and assembly facility resulted in charges of $4.9 million.
“While overall demand and backlog remain strong, we experienced a challenging first quarter with reduced profit due to lower than expected sales in certain markets and the ongoing consolidation of our Forestry, Lawn, and Garden (FLAG) product distribution center and SpeeCo assembly and distribution operations into our new Kansas City facility. While the time and financial investment to consolidate these operations has been significant, we believe it is warranted given the long-term benefit to our customers and our business,” said Josh Collins, Blount’s Chairman and Chief Executive Officer. “In addition, we incurred other costs to work through supply issues related to our SpeeCo operations. We expect the impact of those items are largely behind us; however, higher costs to expedite products and complete the Kansas City facility transition will be felt in the second quarter and possibly in the third quarter as we work to meet the forecasted demand through those periods.”
The consolidation of the SpeeCo distribution and assembly operations and FLAG distribution center into Blount’s new Kansas City distribution and assembly facility began in late 2011 and is expected to be completed by mid-way through the third quarter of 2012. The consolidation will provide synergies and scalability in the FLAG and FRAG businesses and result in approximately $1.0 million of run-rate cost savings on an annual basis by the end of 2012. The new, 350,000-square-foot facility will replace Blount’s existing distribution center in Kansas City and will provide the capacity to meet Blount’s projected needs for the next decade.