Blount Discloses Material Weakness in Accounting

August 7 -- Blount International Inc., which reported weak second-quarter earnings and layoffs Wednesday, has also reported a "material weakness" in its accounting practices.

In a press release accompanying its earnings statement, the company said it will amend its 2012 annual report and its first-quarter earnings report.

The Portland-based company also expects it will not file a formal report for its second quarter on time.

It expects to complete a review of its accounting procedures by the end of 2013.

The accounting problems relate to how Blount valued acquisitions in 2010 and 2011. The company said restated earnings may result in a charge against income reported in the fourth quarter of 2012. It's unclear whether earnings reported in other quarters will be restated.

The accounting problems are not expected to result in changes to previously reported sales.

Matthew Kish       www.bizjournals.com/Portland

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