Blount International Inc. (BLT, Financial) filed Quarterly Report for the period ended 2010-06-30.
Blount International Inc. has a market cap of $523.31 million; its shares were traded at around $10.94 with a P/E ratio of 14.99 and P/S ratio of 1.04. BLT is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jeff Auxier of Auxier Focus Fund, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Richard Pzena of Pzena Investment Management LLC, Chris Davis of Davis Selected Advisers, Jim Simons of Renaissance Technologies LLC.
Consolidated order backlog at June 30, 2010 was $124.5 million compared to $105.7 million at March 31, 2010. Backlog in the Outdoor Products segment increased $17.9 million, while the backlog for gear components increased by $0.9 million during the second quarter of 2010.
SG&A was $29.8 million in the second quarter of 2010, compared to $24.0 million in the second quarter of 2009, representing an increase of $5.7 million (23.9%). As a percentage of sales, SG&A decreased from 21.1% in the second quarter of 2009 to 20.0% in the second quarter of 2010, primarily due to the increase in sales revenue, which outpaced the increase in SG&A spending. Compensation and benefits expense for the quarter increased by $3.4 million on a year-over-year basis, reflecting annual merit increases, increased incentive compensation attributable to improved operating results, higher stock-based compensation expense, and increased employee benefit costs. Advertising expense increased by $0.6 million in the second quarter of 2010 compared to the second quarter of 2009, as we had reduced our advertising programs during the 2009 economic downturn. We incurred $1.1 million in consulting and other costs related to several strategic initiatives we began in the second quarter including projects to improve the efficiency of our manufacturing processes and supply chain. The closure of our warehouse and distribution center in France, and consolidation of these functions into our European distribution center in Belgium in the second quarter of 2010, resulted in costs of $0.4 million. Operating expenses increased $0.3 million from the prior year due to the weaker U.S. Dollar and its effect on the translation of foreign expenses.
Net income in the second quarter of 2010 was $10.4 million, or $0.22 per diluted share, compared to $4.2 million, or $0.09 per diluted share, in the second quarter of 2009.
Outdoor Products Segment. Sales for the Outdoor Products segment increased by $34.7 million (31.5%) in the second quarter of 2010 compared to the second quarter of 2009, primarily due to an increase in unit volume of $35.2 million, reflecting improved international market conditions and strong customer demand for our products. Segment sales were reduced by $1.1 million from the effect of lower average selling prices, driven by product mix and a higher relative proportion of sales to OEM customers as opposed to sales in the replacement market in the comparative quarterly periods. Sales of wood-cutting chainsaw components were up 35.9%, sales of concrete-cutting products were up 33.8%, and sales of outdoor care products were up 14.5%. Sales to OEM customers increased by 39.3%, while replacement market sales increased by 29.1%. International sales increased 40.6% for the three month comparable period, while domestic sales increased by 13.8%.
Segment contribution to operating income increased $14.1 million (100.7%) in the second quarter of 2010 compared to the second quarter of 2009. Increased sales unit volume ($11.6 million) and lower product cost and mix ($8.5 million) drove the improvement in contribution to operating income. These positive factors were partially offset by the effects of lower average selling prices and mix ($1.1 million), fluctuations in foreign currency translation rates ($1.8 million), and higher SG&A expenses ($3.0 million). Our product costs were positively affected in the second quarter of 2010 compared to the second quarter of 2009 by higher production volumes, including the elimination of idle manufacturing days. The higher production volumes drove improved absorption rates when compared to the second quarter of 2009. Capacity utilization in our Outdoor Products segment is estimated at 92% for the second quarter of 2010, compared to 60% for the second quarter of 2009. In addition, steel costs on a year-over-year comparative basis were lower by an estimated $1.8 million, although we expect steel costs to increase in the second half of 2010. SG&A expenses were higher primarily due to increased compensation costs ($1.4 million), advertising expenses ($0.6 million), and severance costs for the closure of our warehouse and distribution function in France ($0.4 million).
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Blount International Inc. has a market cap of $523.31 million; its shares were traded at around $10.94 with a P/E ratio of 14.99 and P/S ratio of 1.04. BLT is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jeff Auxier of Auxier Focus Fund, John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Richard Pzena of Pzena Investment Management LLC, Chris Davis of Davis Selected Advisers, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Sales in the three months ended June 30, 2010 increased by $35.0 million (30.7%) from the same period in 2009, primarily due to increased unit volume of $35.6 million. Changes in average selling price and mix lowered sales revenue by $1.3 million on a quarter-over-quarter comparative basis. Lower average selling prices were attributable to a higher proportion of OEM sales versus replacement market sales in the comparable prior year quarter. International sales increased by $29.3 million (40.2%), while domestic sales increased by $5.6 million (13.7%). The increase in international sales reflected improved world-wide market conditions and increased demand for our products following the severe global recession experienced in 2009. During the second quarter of 2009, we were cautious about extending credit to certain higher risk geographical areas during the global recession, which we believe contributed to a slowdown in sales and orders last year from portions of our international customer base. As international market conditions and credit concerns have improved, our international sales have increased.Consolidated order backlog at June 30, 2010 was $124.5 million compared to $105.7 million at March 31, 2010. Backlog in the Outdoor Products segment increased $17.9 million, while the backlog for gear components increased by $0.9 million during the second quarter of 2010.
SG&A was $29.8 million in the second quarter of 2010, compared to $24.0 million in the second quarter of 2009, representing an increase of $5.7 million (23.9%). As a percentage of sales, SG&A decreased from 21.1% in the second quarter of 2009 to 20.0% in the second quarter of 2010, primarily due to the increase in sales revenue, which outpaced the increase in SG&A spending. Compensation and benefits expense for the quarter increased by $3.4 million on a year-over-year basis, reflecting annual merit increases, increased incentive compensation attributable to improved operating results, higher stock-based compensation expense, and increased employee benefit costs. Advertising expense increased by $0.6 million in the second quarter of 2010 compared to the second quarter of 2009, as we had reduced our advertising programs during the 2009 economic downturn. We incurred $1.1 million in consulting and other costs related to several strategic initiatives we began in the second quarter including projects to improve the efficiency of our manufacturing processes and supply chain. The closure of our warehouse and distribution center in France, and consolidation of these functions into our European distribution center in Belgium in the second quarter of 2010, resulted in costs of $0.4 million. Operating expenses increased $0.3 million from the prior year due to the weaker U.S. Dollar and its effect on the translation of foreign expenses.
Net income in the second quarter of 2010 was $10.4 million, or $0.22 per diluted share, compared to $4.2 million, or $0.09 per diluted share, in the second quarter of 2009.
Outdoor Products Segment. Sales for the Outdoor Products segment increased by $34.7 million (31.5%) in the second quarter of 2010 compared to the second quarter of 2009, primarily due to an increase in unit volume of $35.2 million, reflecting improved international market conditions and strong customer demand for our products. Segment sales were reduced by $1.1 million from the effect of lower average selling prices, driven by product mix and a higher relative proportion of sales to OEM customers as opposed to sales in the replacement market in the comparative quarterly periods. Sales of wood-cutting chainsaw components were up 35.9%, sales of concrete-cutting products were up 33.8%, and sales of outdoor care products were up 14.5%. Sales to OEM customers increased by 39.3%, while replacement market sales increased by 29.1%. International sales increased 40.6% for the three month comparable period, while domestic sales increased by 13.8%.
Segment contribution to operating income increased $14.1 million (100.7%) in the second quarter of 2010 compared to the second quarter of 2009. Increased sales unit volume ($11.6 million) and lower product cost and mix ($8.5 million) drove the improvement in contribution to operating income. These positive factors were partially offset by the effects of lower average selling prices and mix ($1.1 million), fluctuations in foreign currency translation rates ($1.8 million), and higher SG&A expenses ($3.0 million). Our product costs were positively affected in the second quarter of 2010 compared to the second quarter of 2009 by higher production volumes, including the elimination of idle manufacturing days. The higher production volumes drove improved absorption rates when compared to the second quarter of 2009. Capacity utilization in our Outdoor Products segment is estimated at 92% for the second quarter of 2010, compared to 60% for the second quarter of 2009. In addition, steel costs on a year-over-year comparative basis were lower by an estimated $1.8 million, although we expect steel costs to increase in the second half of 2010. SG&A expenses were higher primarily due to increased compensation costs ($1.4 million), advertising expenses ($0.6 million), and severance costs for the closure of our warehouse and distribution function in France ($0.4 million).
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