Blount International, Inc. Q3 2008 Earnings Call Transcript

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2008-11-18 07:40:25.0

Tags: J.P. Morgan Chase & Co., Call Transcript, Latin America, Earnings, Basis, Blount International Inc., Sales Strategy, Sales Force Management, Sales, Seeking Alpha, J.P. Morgan Chase & Co., Call Transcript, Latin America, Earnings, Basis, Blount International Inc., Sales Strategy, Sales Force Management, Sales, Seeking Alpha

Question-and-Answer Session

Operator

(Operator instructions) The first question is from Mark Rupe of Longbow Research. Please go ahead.

Mark Rupe – Longbow Research

Jim, Cal, congratulations on the quarter.

James Osterman

Thanks Mark.

Mark Rupe – Longbow Research

As it relates to performance internationally, I know international was up, I believe, 20%. Can you add any anecdotes on some of Europe versus Latin America versus Asia Pacific, and how may be they trended through the quarter?

James Osterman

Go ahead.

Calvin Jenness

Well, all of the – we had just excellent results in all of the areas. We had very, very strong sales in Russia. South Asia Pacific was up substantially, and Latin America was also up. So, very strong performance really on a global basis.

Mark Rupe – Longbow Research

Okay. And then you cited in the release and spoke briefly about the caution or cautiousness of some of your customers. Is that on a broad basis, or is there a geographic component or product component to that?

James Osterman

No, it’s really on a geographic basis. I mean, there is quite a shock to all of them with the current strengthening of the dollar so rapidly. Areas that were particularly hit hard are down in South Asia, Australia is an example, and other countries, Latin America as well.

Mark Rupe – Longbow Research

Okay. And then just lastly, when you back out the Carlton sales or look at Carlton just by itself, did it slow during the quarter, the growth rate there?

Calvin Jenness

It’s still pretty strong. It’s – no, it hasn’t slowed, Mark.

Mark Rupe – Longbow Research

Okay, perfect. Thank you, guys.

Operator

The next question comes from Curt Woodworth of JP Morgan. Please go ahead.

Curt Woodworth – JP Morgan

Hi, good afternoon.

James Osterman

Hi, Curt.

Calvin Jenness

Hi, Curt.

Curt Woodworth – JP Morgan

Cal, if you look at kind of the embedded guidance for the fourth quarter equates to operating income at the mid-point around $90 million, and today it was roughly, call it, 150. So, that comes out to about 12.6% margin, which is down about 350 basis points year-on-year. Can you help me understand what the moving pieces are and why you would see that type of slowdown when you’ve been seeing the opposite of that thus far this year?

Calvin Jenness

The biggest new news, Curt, is the steel cost. I alluded to that before. I think year-to-date we’re negative on the P&L $2.2 million in the Outdoor Products segment. It’s a little bit higher when you put in gear. But that equivalent number probably goes to $3.5 million to $4.5 million in the fourth quarter as a negative drain year-over-year.

 

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