Blount International Inc. (BLT, Financial) filed Quarterly Report for the period ended 2010-03-31.
Blount International Inc. has a market cap of $530.1 million; its shares were traded at around $11.1 with a P/E ratio of 17.6 and P/S ratio of 1.1. BLT is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, 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 March 31, 2010 was $105.7 million compared to $79.7 million at December 31, 2009. Backlog in the Outdoor Products segment increased $25.2 million, while the backlog for gear components increased by $0.8 million during the first quarter of 2010.
SG&A was $28.3 million in the first quarter of 2010, compared to $25.2 million in the first quarter of 2009, representing an increase of $3.1 million (12.3%). As a percentage of sales, SG&A decreased from 21.6% in the first quarter of 2009 to 20.7% in the first 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 $1.9 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 $0.4 million in the first quarter of 2010 compared to the first quarter of 2009. International operating expenses increased $0.8 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 first quarter of 2010 was $8.8 million, or $0.18 per diluted share, compared to $1.0 million, or $0.02 per diluted share, in the first quarter of 2009.
Outdoor Products Segment. Sales for the Outdoor Products segment increased by $21.7 million (19.5%) in the first quarter of 2010 compared to the first quarter of 2009, primarily due to an increase in unit volume of $24.8 million, reflecting improved international market conditions and strong customer demand for our products. Fluctuations in foreign currency exchange rates further increased reported segment sales revenue by $1.6 million compared to the first quarter of 2009. Segment sales were reduced by $4.7 million from the effect of lower average selling prices driven by product mix and a higher relative proportion of sales to OEM and large volume customers. Sales of wood-cutting chainsaw components were up 23.7%, sales of concrete-cutting products were up 13.5%, and sales of outdoor care products were essentially flat year-over-year. Sales of our outdoor care products were positively affected in the first quarter of 2009 by weather conditions in the Midwest and East Coast areas of the U.S., which stimulated demand for such products, and by the positive market reception of promotional activities that we implemented at that time. Sales to OEM customers increased by 21.1%, while replacement market sales increased by 19.0%. International sales increased 33.4% for the three month comparable period, while domestic sales declined by 8.0%.
Segment contribution to operating income increased $11.3 million (68.5%) in the first quarter of 2010 compared to the first quarter of 2009. The favorable effects of increased sales unit volume ($11.9 million) and lower product cost and mix ($6.1 million) were partially offset by the effects of lower average selling prices and mix ($4.7 million), fluctuations in foreign currency translation rates ($1.6 million), and slightly higher SG&A expenses ($0.5 million). Our product costs were positively affected during the first quarter of 2010 compared to the first 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 first quarter of 2009. In addition, steel costs on a year-over-year comparative basis were lower by an estimated $4.2 million.
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Blount International Inc. has a market cap of $530.1 million; its shares were traded at around $11.1 with a P/E ratio of 17.6 and P/S ratio of 1.1. BLT is in the portfolios of Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, 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 March 31, 2010 increased by $20.2 million (17.3%) from the same period in 2009, primarily due to increased unit volume of $23.5 million. Changes in average selling price and mix lowered sales revenue by $4.9 million on a quarter to quarter comparative basis. Lower average selling prices were attributable to increased sales to large volume customers, as well as a higher proportion of OEM sales versus the comparable prior year quarter. The translation of foreign currency-denominated sales transactions, given the weaker U.S. Dollar in comparison to the first quarter of 2009, increased consolidated sales by $1.6 million in the current quarter. International sales increased by $24.6 million (33.1%), while domestic sales decreased by $4.4 million (10.4%). The increase in international sales reflected improving world-wide market conditions and demand for our products following the severe global recession experienced in 2009, as well as favorable effects from movement in foreign currency exchange rates compared to 2009. During the first quarter of 2009, we were cautious about extending credit to certain higher risk geographical areas during the then current global recession, which we believeConsolidated order backlog at March 31, 2010 was $105.7 million compared to $79.7 million at December 31, 2009. Backlog in the Outdoor Products segment increased $25.2 million, while the backlog for gear components increased by $0.8 million during the first quarter of 2010.
SG&A was $28.3 million in the first quarter of 2010, compared to $25.2 million in the first quarter of 2009, representing an increase of $3.1 million (12.3%). As a percentage of sales, SG&A decreased from 21.6% in the first quarter of 2009 to 20.7% in the first 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 $1.9 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 $0.4 million in the first quarter of 2010 compared to the first quarter of 2009. International operating expenses increased $0.8 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 first quarter of 2010 was $8.8 million, or $0.18 per diluted share, compared to $1.0 million, or $0.02 per diluted share, in the first quarter of 2009.
Outdoor Products Segment. Sales for the Outdoor Products segment increased by $21.7 million (19.5%) in the first quarter of 2010 compared to the first quarter of 2009, primarily due to an increase in unit volume of $24.8 million, reflecting improved international market conditions and strong customer demand for our products. Fluctuations in foreign currency exchange rates further increased reported segment sales revenue by $1.6 million compared to the first quarter of 2009. Segment sales were reduced by $4.7 million from the effect of lower average selling prices driven by product mix and a higher relative proportion of sales to OEM and large volume customers. Sales of wood-cutting chainsaw components were up 23.7%, sales of concrete-cutting products were up 13.5%, and sales of outdoor care products were essentially flat year-over-year. Sales of our outdoor care products were positively affected in the first quarter of 2009 by weather conditions in the Midwest and East Coast areas of the U.S., which stimulated demand for such products, and by the positive market reception of promotional activities that we implemented at that time. Sales to OEM customers increased by 21.1%, while replacement market sales increased by 19.0%. International sales increased 33.4% for the three month comparable period, while domestic sales declined by 8.0%.
Segment contribution to operating income increased $11.3 million (68.5%) in the first quarter of 2010 compared to the first quarter of 2009. The favorable effects of increased sales unit volume ($11.9 million) and lower product cost and mix ($6.1 million) were partially offset by the effects of lower average selling prices and mix ($4.7 million), fluctuations in foreign currency translation rates ($1.6 million), and slightly higher SG&A expenses ($0.5 million). Our product costs were positively affected during the first quarter of 2010 compared to the first 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 first quarter of 2009. In addition, steel costs on a year-over-year comparative basis were lower by an estimated $4.2 million.
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