Blount International, Inc. Q2 2010 Earnings Call Transcript
Now, I would like to turn the call over to Josh Collins, our Chairman and CEO.
Thanks, Cal; and thank you all for joining us on today's call. First, I will take a few moments to discuss the highlights of the second quarter. After that, Cal will cover some financial details. I will then conclude our prepared remarks by outlining our revised forecast for 2010, discussing some of the significant recent events related to Blount.
We are pleased with the results of our performance over the second quarter. There continue to be a number of positive signs within our business as we progress through the year. Order intake continues to increase, indicating a solid demand for the last half of 2010, and we continue to achieve solid operating margins as a result of the volume leverage on our manufacturing plants. The second quarter of 2010 marked the third consecutive quarter of sequential sales growth for our company, and the highest revenue and operating income levels since the record third quarter of 2008. Sales were up over 30% in the second quarter of 2010 compared to last year's second quarter. Second quarter operating margins continued to show strength at over 50% of sales as we achieved good cost performance, plant efficiencies, and lower steel costs year over year. Additionally, we generated over $20 million of free cash flow.Customer orders continued to show strength, with orders on hand increasing over 50% from both June 2009 and December 2009 levels. Back orders now only $6.9 million below the record level at the end of June 2008. As a result, we are optimistic about sales growth over the remainder of 2010. Overall, our solid operating performance and cash generation has led to net debt leverage of 1.9 times. This morning, we successfully completed the amendment of our senior credit facility. This was a significant achievement, as it provides us with our desired operating flexibility, and reduces our overall cost of borrowing.
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