Blount Will Cut 200 Jobs, Close Portland-Area Factory After 2nd Quarter Sales Slide

August 7 -- Saw-chain maker Blount International Inc. will lay off 200 and shutter a Portland-area factory after the company's second-quarter profits fell by nearly one-third.

The Milwaukie manufacturer announced plans to consolidate two local factories into one on Wednesday, as part of its quarterly financial results. The company also disclosed an systems control problem that will force it to amend past financial statements.

The news hit hard on Wall Street, where shares of the company's stock fell 8.8 percent to $11.66 before the market closed.

Blount reported net income of $9.3 million during the three months ending June 30, down 29 percent from the same time last year. Sales declined 8 percent during that period, to $220.4 million

Second-quarter earnings per share were 19 cents, compared to 26 cents a year ago.

In its earnings release, the company said the late-arriving spring hurt domestic sales, and economic uncertainty dampened eurozone sales. Demand also fell in Asia. Chairman and chief executive Josh Collins said in the statement that all of the company's major markets were weaker this year than last. "In the second quarter, we continued to be challenged by difficult economic conditions," he said.

Blount makes equipment geared for the gardening, forestry and agricultural industries under several brands, including Oregon, SpeeCo and Carlton. It employs 4,500 worldwide.

Blount acquired the Carlton Co. in 2008, and continued to operate out of Carlton's Milwaukie plant. But it will consolidate those operations later this year into a larger nearby factory. The plans had been in the works for years, company spokesman David Dugan said.

The company expects the move to save between $6 million and $8 million annually.

Blount also plans to amend its 2012 annual report and first quarter 2013 report after a routine review uncovered a "material weakness" tied to computer systems controls. The company also found a possible accounting issue that could result in a non-cash charge to its fourth-quarter 2012 operating income.

Blount said it won't file its second-quarter report with the U.S. Securities and Exchange Commission until the review is finished, meaning it could potentially miss its Friday filing deadline.

Molly Young         www.oregonlive.com 

Blount International Acquires Woods Equipment Company

August 17 -- The acquisition of an Illinois tractor and tool company by Portland's Blount International Inc. is the latest in a string of deals the company has made in an effort to expand its reach from forests to farms.

Blount International, a holding company, markets its products under several different brands.

• Oregon, Carlton and Windsor: The three brands manufacture replacement parts for chainsaws, particularly chains and guide bars. The largest, Oregon, also makes outdoor power equipment replacement parts.
• SpeeCo: The 2010 acquisition of the log splitter and tractor part company was Blount's first foray into farm, ranch and agriculture.
• ICS: Manufactures concrete cutting hydraulic and gas chainsaws for the construction business, as well as replacement parts.
• Woods: The newly-acquired company markets its agriculture, groundskeeping and construction equipment and parts under the brands Woods, Alitec, Central Fabricators, Gannon, Wain-Roy, WoodsCare and TISCO.

Blount, the makers of the Oregon brand saw chains and yard care products, announced Wednesday it would buy Illinois-based Woods Equipment Co. for $185 million.

The cash acquisition, Blount said, will increase its reach in the agriculture business. The company will acquire the Woods and TISCO tractor parts brands, as well as three manufacturing facilities and five distribution centers.

The deal is Blount's fourth acquisition in 18 months. After a changeup in Blount's senior leadership in 2009, the company launched a new growth plan to acquire companies in related markets, with a particular emphasis on agriculture.

"Woods was high on our list," said David Willmott, Blount's president and chief operating officer. "We identified it well over a year ago."

Just last week, Blount closed a deal to buy PBL SAS, a French lawnmower-blade manufacturer. It paid $14 million in cash and took on $14 million in debt. In March, Blount paid $20.6 million in cash and stock to buy KOX, a German direct-to-customer forestry-parts company.

Last year, the company bought SpeeCo, a Golden, Colo., maker of log splitters and farm and ranch accessories. It paid $90 million in cash.

Willmott said Blount is looking to make more acquisitions in the ranch and farm market. In particular, he said, the company is looking to expand its presence in Brazil, where it already manufactures forestry and yard products.

"I wouldn't expect something to happen in the very near future, but we're spending a lot of time researching the market in Brazil on the agriculture side," Willmott said.

Willmott said SpeeCo and other recent acquisitions have already performed well for the company. In the quarter ending March 31, Blount reported SpeeCo and KOX had contributed $22.3 million in sales, by itself a 16.7 percent boost over the first quarter of 2010.

Woods registered about $160 million in sales last year, Blount said. It also hopes to leverage Woods' network of 11,000 dealers.

"Just about any place where ag parts and accessories are sold, you either are or should be selling saw chain," Willmott said.

Blount will form a subsidiary to merge with the company. The deal is expected to close by the end of 2011's third quarter, pending regulatory approval.

Blount will finance the deal through cash on hand and its revolving credit facility. The company had $80.5 million on hand at the end of June, according to a financial report filed last week.