Blount Announces 2006 Fourth Quarter and Full Year Results

Full Year Results

Sales in 2006 were $651.1 million compared to $702.3 million in 2005, a 7.3% decline. Sales in the Company’s largest segment, Outdoor Products, increased by approximately 1% in 2006 to exceed 2005’s record level. This increase was more than offset by an industry related sales decline of 21.5% for the Company’s Industrial and Power Equipment segment.

Operating income from continuing operations in 2006 was $88.3 million compared to $117.8 million in 2005. Operating income in 2006 included $5.0 million of non-recurring charges related to the redesign of the Company’s domestic retirement plans and the write-down and closure of a manufacturing facility. Other major variances related to the year-over-year operating income decline include $4.8 million from adverse foreign currency trends, $3.2 million for stock compensation expense and $13.4 million due to a unit reduction in timber-harvesting equipment sold within the Industrial and Power Equipment segment. Income from continuing operations was $38.1 million ($0.80 per diluted share). Income from continuing operations in 2005 was $104.7 million ($2.20 per diluted share) and included a significant income tax adjustment that was made to reverse most of the Company’s deferred income tax valuation allowance. The estimated impact of key variances in results of continuing operations for 2006 compared to 2005 in terms of sales, operating income and diluted earnings per share is illustrated in PDF file

Segment Results

The Outdoor Products segment’s fourth quarter sales were $114.6 million, a 1.8% increase from the fourth quarter 2005 sales of $112.6 million. Segment contribution to operating income was $26.4 million (23.0% of sales) in 2006 compared to $25.0 million (22.2% of sales) in the fourth quarter of 2005. The fourth quarter increase in year-over-year sales and contribution is the result of increased volume and favorable foreign currency effects, offset partially by the cost of increased marketing programs. The effects of foreign currency increased sales revenue by $1.6 million and segment contribution by $0.9 million in the fourth quarter of 2006 from 2005. Backlog at the end of 2006 was $54.8 million, down from $64.8 million at the end of the third quarter of 2006. Segment sales for the full year were a record $455.0 million, compared to $452.3 million in 2005. Segment contribution to operating income for 2006 was $97.8 million, compared to $105.5 million in 2005. Approximately 60% of the year-over-year contribution decline is related to the effects of stronger international currencies relative to the United States dollar during 2006.

The Industrial and Power Equipment segment sales were $43.7 million in the fourth quarter of 2006, a decline of 32.4% from $64.6 million in 2005. Segment contribution to operating income in the fourth quarter was $1.4 million compared to $8.7 million in the fourth quarter of 2005. Sales for the full year were $196.9 million compared to the record level of $251.0 million in 2005. Segment contribution to operating income for 2006 was $13.3 million compared to $28.0 million in 2005. Throughout 2006, the Industrial and Power Equipment segment was adversely impacted by a severe cyclical downturn in the North American timber industry that resulted in a significant decline in demand for the Company’s timber-harvesting equipment products. Order backlog at the end of 2006 was $18.5 million compared to $28.7 million at the end of the third quarter of 2006.


March 2007
  • Author: admin | Category: blount |

Post A Comment