November 7, 2007
Statements in this presentation that are not reported financial results or other historical information are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. They include, for example, statements about our business outlook, assessment of market conditions, projected strategies, future plans, future sales, expectations about price levels for our major products and our major suppliers, predictions concerning inventory levels, capital spending and tax rates. These forward-looking statements are not guarantees of future performance. They are based on management’s expectations and assumptions that we believe are reasonable at the current time but involve a number of business risks and uncertainties, any of which could cause actual results to differ materially from those expressed in or implied by the forward-looking statements.
2
– Sr. Vice President & Chief Financial Officer
–
President, Oregon Cutting Systems Group
–
President, ICS & Sr. VP, Business Development
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Blount International
LTM Sales (mm): $639
LTM EBITDA (mm) $109
Margin 17. 1%
Outdoor Products Group
(“OPG”)
LTM Sales (mm): $476
LTM EBITDA (mm): $114
Margin 23.9%
• Oregon Cutting Systems – Saw chain, bar & accessories, outdoor equipment parts
• ICS – Concrete cutting saws & diamond chain for construction
Industrial Power & Equipment
Group (“IPEG”)
LTM Sales (mm): $ 164
LTM EBITDA (mm): $9.6
Margin 5.8%
• Forestry & Industrial Equipment –
Timber harvesting equipment
• Gear Products – Rotational bearings, gear components
LTM Revenues LTM EBITDA
___________________________
Note: Data reflects LTM period ended 9/30/07
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• Leading Market Positions
– Global leader in chainsaw chain & guide bars (est. market shares >50%)
– First mover and sole position in Diamond Chain Technology™
• Attractive “Razor-Blade” Business Model of OPG Segment
– High margin recurring revenue stream
• Strong Growth Potential
– Earnings leverage with improved capital structure
– International expansion opportunities
– New Product & Business Development Group
– Low-cost producer positioned for further margin improvements (e.g. China)
• Channel Breadth, International Strength and Customer Relationships
– Strong long-term relationships with both OEM’s and distributor/dealer channels
• Experienced Management Team
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• Consistent core OPG segment growth excluding Forestry
$600
$500
$475
$484
$441
$400 $372
$323
$300
$104 $106 $104
$200 $83
$72
$100
$0
2002 2003 2004 2005 2006
$504
$102
LTM
$200
$150
$100
$50
$0
___________________________
Note: Pro forma revenue excluding Forestry Division
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Total Debt and Leverage
425
350
275
200
$ in MM
650
575
7.9x
500
$628
12/31/02
$611
6.2x
12/31/03
Total Debt
$494
3.8x
12/31/04
$408
3.0x
12/31/05
3.0x
$351
3.3x
$355
9.0x
8.0x
7.0x
6.0x
5.0x
4.0x
3.0x
2.0x
1.0x
0.0x
12/31/06 09/30/07
Leverage
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• Market leader in cutting attachments for chainsaws, mechanical harvesters, lawnmowers and related products.
• Wide array of customers ranging from professional loggers, timber harvesters, arborists and maintenance crews, to landscapers and homeowners around the world.
• Specialized in global, precision manufacturing of high volumes of small metal parts.
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Business Drivers
• Residential & industrial construction
• Repair & remodeling
• Demand for pulp & paper
• Natural disasters
• Energy prices
• Disposable income
Competitive Strengths
• World-class distribution
• Long-term customer relationships
• Oregon® brand
• Market share
• Global manufacturing
• Total Quality focus
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• Growing global market with near 14 million chainsaws sold annually
Units in MM
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
CAGR
11%
2001 2002
Gas
2003 2004
Electric
2005
___________________________
Note: Company Estimates
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2006
• Market leading position & brand
Oregon
Stihl
Chinese
Carlton
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___________________________
Note: Company Estimates 2006
• Diversified revenue sources offer cyclical protection
OEMs
28%
Mass
Retailers
9%
Europe
40%
Dealers
8% by CHANNEL
Distribtrs
55%
Other
3%
Latin
America
9%
South
Asia
11% by GEOGRAPHY
North
America
37%
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___________________________
Note: 2006 Oregon Cutting Systems Sales Revenue
• Six world-wide production facilities, including China
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• Strategic growth business, now an anchor Brand for Blount in construction space
• Concrete saws & proprietary diamond-segment concrete cutting chain
• Very high margin business; both razor & razor-blade model
• Strong sales revenue growth w/ 5-yr CAGR of 19%
• EBITDA > 30% of sales
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• Product Advantages
–
–
–
–
Square Corner Cuts
Deep Cuts to 24”
Portability
Labor Savings
• Key Markets
–
–
–
–
–
General Construction
Fire & Rescue/Homeland Security
Landscape/Hardscape
Pipe/Excavation
Masonry
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• 10+ years of pioneering creates a strong future replacement consumables market (ea. saw consumes avg. of 4-5 chains/yr)
10,000
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Annual Saw Units Sold (ICS Brand)
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
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• Current 4% Share of Global
Diamond Tool Market Space
• Strong Intellectual Property
– Multiple patents, including new technology launched 2008
• New Products & Markets
– New Saw Platforms 2008
– Marketing Awareness & Applications
• New Business Development
Group; Bolt-On Acquisition Efforts
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