Blount 2013 Sales Down, Guides 2014; Announces Blade Plant Consolidation

(RTTNews) - Blount International Inc. (BLT) announced updated guidance for the full year ended December 31, 2013 along with preliminary expectations for 2014 and the long-term financial targets of its updated strategic plan.

Estimated 2013 sales were $901 million, a three percent decrease versus 2012. Estimated 2013 Earnings Before Interest, Taxes, Depreciation, Amortization and certain charges or Adjusted EBITDA for 2013 was $125 million compared to $136 million in the prior year. Results excluded any impact of potential non-cash impairment charges related to goodwill and other indefinite lived intangible assets.

"Although our Farm, Ranch, and Agriculture ("FRAG") business outperformed the prior year, the results for our Forestry, Lawn, and Garden ("FLAG") business continued to reflect the soft market demand we experienced throughout 2013. Overall, we expect our results to be below our latest guidance for 2013, particularly in Europe and Asia. Despite the slow market for FLAG products, however, we were able to generate significant free cash flow during 2013, and we paid off debt to retain a strong balance sheet," said Josh Collins, Blount's Chairman and CEO.

The company said it believes demand will be moderately better in 2014, and it believes both revenue and profitability will improve versus 2013.

The company noted that it completed a strategic plan review in 2013. As an outcome of its strategic planning, the company targets 2018 sales of more than $1.1 billion and Adjusted EBITDA of approximately $175 million.

In 2014, the company will consolidate its North American lawn and garden blade manufacturing into its Kansas City, Missouri plant.

Lawn and garden blades have historically been manufactured in Queretaro, Mexico, and Kansas City, Missouri. The Queretaro facility was acquired with PBL in 2011 and brought important blade manufacturing technology to the Company. Once complete, cost reductions of approximately $2 million are expected from the consolidation on a full year basis, including the elimination of approximately 35 manufacturing positions.

The company expects to incur expenses of between $1 million and $2 million in 2014 to consolidate the manufacturing operations, of which approximately half are cash transition costs for severance, dismantling, moving expenses, cleanup, and exit activities, with non-cash charges for accelerated depreciation and equipment impairment charges representing the other half.

The Queretaro facility ceased operation on January 23, 2014 and is currently leased through September 2014.

The Company's 2014 financial targets are for sales to range from $925 million to $950 million and Adjusted EBITDA to range from $130 million to $135 million.