Blount International Inc. announced that Jerry Johnson has been promoted to President of its Farm, Ranch, and Agriculture division. Paul Valas, who has been President of the FRAG division since 2011, will transition to a new position as Senior Advisor, providing Blount with insight and assistance on strategic planning, customer relationships, and international expansion. Since joining the company in 2010 when Blount acquired SpeeCo, Valas has led the development and integration of the FRAG businesses, including SpeeCo, Woods Equipment, and TISCO. Prior to the acquisition of SpeeCo, Mr. Valas was CEO of SpeeCo and, as part of the acquisition, agreed to a two-year transition role at Blount. Prior to his new position, Johnson was President of Woods Equipment Company, which was acquired by Blount in 2011 and is a business unit of FRAG.

Blount International Inc. reported unaudited consolidated earnings results for the first quarter ended March 31, 2013. For the quarter, the company reported sales of $232.615 million compared to $226.309 million a year ago. Operating income was $19.143 million compared to $3.702 million a year ago. Income from continuing operations before income taxes was $15.652 million compared to $9.166 million a year ago. Net income was $9.340 million or $0.19 per basic and diluted share compared to $5.881 million or $0.12 per basic and diluted share a year ago. Free cash flow was $12.213 million compared to $11.550 million a year ago. Net cash provided by operating activities was $5.481 million compared to $1.432 million a year ago. Net purchases of property, plant, and equipment were $6.732 million compared to $10.118 million a year ago. Adjusted EBITDA was $32.073 million compared to $30.943 million a year ago. Net debt was $480 million at the end of the first quarter, which is an increase of $13.5 million from December 31, 2012. Net debt increased in the first quarter as it had net use of free cash at $12.2 million and currency rates reduce cash another $1 million. This compares to a free cash use of $1.6 million the first quarter 2012. Net capital spending declined $3.4 million and partially offset the increase in working capital. The reduction in capital spending was a result of lower spending on the Fuzhou, China plant expansion, reduced capital spending and reduced in response to recent soft marketing conditions and result in reduced cash from operations. The company's fiscal year 2013 outlook remains unchanged. Sales are expected to range between $930 million and $980 million, and operating income to range between $88 million and $98 million. In 2013, operating income is expected to experience headwind from foreign currency exchange rates of between $2 million and $3 million, and steel costs are expected to have up to an overall $1 million favorable impact for the year compared to 2012. The 2013 operating income outlook includes non-cash charges of approximately $15 million related to acquisition accounting. Free cash flow in 2013 is expected to range between $40 million and $50 million, after approximately $40 million to $50 million of capital expenditures. Net interest expense is expected to be between $18 million and $19 million in 2013, and the effective income tax rate for continuing operations is expected to be between 35% and 38% in 2013. Net debt is expected at $421.5 million. Overall adjusted EBITDA should fall within the $140 million to $150 million range. Even at the low end of sales growth guidance, The company expects improved profitability due to the cost related to last year’s integration of SpeeCo into new Kansas City distribution and assembly center, as well as the write-off of the discontinued log splitter line both of which will not recur in 2013.

Blount International Inc., Q1 2013 Earnings Call, May 07, 2013