Blount International, Inc. (BLT), a maker of equipments for forestry, yard care, and general contractor industries, reported Tuesday a decline in fourth-quarter net income, reflecting higher effective income tax rate. The company also provided sales outlook for fiscal 2009, below analysts' expectations.
Net income for fourth quarter dropped $6.92 million, or $0.14 a share, from $17.57 million, or $0.37 a share, in the previous year.
Income from continuing operations fell to $6.76 million, or $0.14 per share, from $8.90 million, or $0.19 per share in the year-ago quarter.
The comanpy said its results included an increase in provision for income taxes to $6.57 million from $3.54 million in the year-ago period. Blount incurred higher international taxes due to increased taxable income at its foreign subsidiaries combined with a sharply stronger U.S. dollar, which caused a significant reduction in the tax benefit from the foreign operations.
Sales in the quarter rose 1.5% to $133.8 million from $131.8 million in the 2007 period.
On an average, three analysts polled by Thomson Reuters expected the company to report earnings of $0.18 per share, on revenue of $152.45 million, for the fourth quarter. Analysts' estimate typically excludes special items.
Operating income was $19.2 million, compared to $21.2 million in the fourth quarter of 2007. Lower sales volumes and higher steel costs were partially offset by improved pricing and the benefits of favorable foreign exchange rates, the company said.
For the full year, net income dipped to $38.60 million, or $0.80 a share, from $42.86 million, or $0.89 a share, in 2007. Income from continuing operations, however, increased to $38.84 million, or $0.81 a share, from $32.14 million, or $0.67 a share.
Sales in 2008 surged 15.8% to $597.0 million from $515.5 million in 2007, half of the growth attributed to the acquisition of Carlton business.
James Osterman, Chairman and Chief Executive of Blount, said "In the fourth quarter, we experienced a slowdown in sales from our international customer base for the first time in nearly three years. Domestic sales growth in the quarter, aided by storm activity, helped to dampen the effect of the international slowdown. However, international and OEM customers continue to be impacted by the strong U.S. dollar and the economy and have remained cautious about inventory levels as they entered 2009."
Expecting the comparable unit volumes to decline in the first half of 2009, the company has implemented cost control actions, including the initiation for the permanent closure of a manufacturing facility, worldwide retrenchment by about 8% and freezing certain salaries.
Sales order backlog for the company's Outdoor product segment was $98.9 million at December 31, 2008 compared to $63.3 million at the end of last year.
Looking forward, Blount expects 2009 operating income to range between $65 million and $75 million. Included in the forecast was $6 million to $7 million of expenses related to the closure of the Milan, Tennessee production facility and severance for positions eliminated at the Company's other locations.
The company expects sales to range from $510 million to $560 million. Analysts foresee revenues of $646.99 million in 2009.
BLT closed Monday at $7.20 on the NYSE.
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