BLOUNT INTERNATIONAL INC - FORM 10-Q/A

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Non-accelerated filer

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file	filename
EX-32.1 - CERTIFICATION - BLOUNT INTERNATIONAL INC	a2013q1form10-qaex321.htm
EX-32.2 - CERTIFICATION - BLOUNT INTERNATIONAL INC	a2013q1form10-qaex322.htm
EX-31.2 - CERTIFICATION - BLOUNT INTERNATIONAL INC	a2013q1form10-qaex312.htm
EX-31.1 - CERTIFICATION - BLOUNT INTERNATIONAL INC	a2013q1form10-qaex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q/A

Amendment No. 1 to Form 10-Q



ý	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2013.



¨	Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number 001-11549

BLOUNT INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)




Delaware		63 0780521
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4909 SE International Way, Portland, Oregon		97222-4679
(Address of principal executive offices)		(Zip Code)

(503) 653-8881

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

As of May 1, 2013 there were 49,219,560 shares outstanding of $0.01 par value common stock.

BLOUNT INTERNATIONAL, INC. AND SUBSIDIARIES

Table of Contents



		Page

Explanatory Note		2

Part I Financial Information		3

Item 4. Controls and Procedures		3

Part II Other Information		5

Item 6. Exhibits		5

Signatures		6

Exhibit Index		6

Explanatory Note

We are filing this Amendment No. 1 on Form 10-Q/A (the "Amended Filing" or "Form 10-Q/A") to our previously issued Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 (the "Original Filing") to amend and restate our Item 4. Controls and Procedures disclosures related to effectiveness of our disclosure controls and procedures ("DCP") and internal control over financial reporting ("IFCR"). The Original Filing was filed with the Securities and Exchange Commission ("SEC") on May 7, 2013. Additionally, we have included disclosure related to our planned amended Annual Report on Form 10-K/A filing for the year ended December 31, 2012 in Part I, Item 4.

Restatement of Internal Control and Disclosures

Subsequent to the Original Filing, we conducted a re-evaluation of the adequacy of our ICFR related to accounting for goodwill, accounting for intangible assets other than goodwill, information technology general controls at our Woods/TISCO subsidiary, and controls over restricted access and segregation of duties within the SAP system. This re-evaluation identified the following material weaknesses in our ICFR as of December 31, 2012, that continued to exist as of March 31, 2013, the end of the period covered by this Form 10-Q/A.

This evaluation identified material weaknesses in ICFR as the Company 1) did not design and maintain effective internal controls over the accounting for goodwill, 2) did not design and maintain effective internal controls over the accounting for intangible assets other than goodwill, 3) did not design and maintain effective information technology general controls at our Woods/TISCO subsidiary, and 4) did not design and maintain effective controls over restricted access and segregation of duties within the SAP system as certain personnel have administrator access to execute certain conflicting transactions. These material weaknesses are described in more detail in Part I, Item 4 of this Amended Filing.

Notwithstanding the determination that material weaknesses existed as described above, management has concluded that our unaudited condensed consolidated financial statements included in the Original Filing are fairly presented in all material respects in accordance with generally accepted accounting principles in the United States of America and they may still be relied upon.

We will also be amending our Annual Report on Form 10-K for the year ended December 31, 2012 to reflect the conclusions by our management that ICFR and DCP were not effective as of December 31, 2012.

PART I FINANCIAL INFORMATION


ITEM 4.	CONTROLS AND PROCEDURES

The Company maintains DCP that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended ("the Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the DCP, management recognizes that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives. Management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's DCP as of the end of the period covered by this report. At the time that our Annual Report on Form 10-K for the year ended December 31, 2012 was filed on March 8, 2013, the Company's Chief Executive Officer and Chief Financial Officer concluded that our DCP were effective at a reasonable assurance level as of December 31, 2012. On May 7, 2013, when the Original Filing was filed, the Company's Chief Executive Officer and Chief Financial Officer concluded that our DCP were also effective at a reasonable assurance level as of March 31, 2013. Subsequent to these evaluations, the Company's management, including the Chief Executive Officer and the Chief Financial Officer, re-evaluated its previous conclusions on ICFR as of December 31, 2012 and determined that the material weaknesses described below existed as of that date and continued to exist as of March 31, 2013. Therefore, the Company's management, including the Chief Executive Officer and the Chief Financial Officer concluded that DCP were not effective as of December 31, 2012 or March 31, 2013, because of material weaknesses, as described below, in our ICFR.

Material weaknesses in internal control over financial reporting

A material weakness is a deficiency, or combination of deficiencies, in ICFR, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following control deficiencies that constituted material weaknesses in our ICFR as of March 31, 2013. Management also determined that these material weaknesses existed as of December 31, 2012:

The Company did not design and maintain effective internal controls over the accounting for goodwill. Specifically, the Company did not design and maintain effective controls related to the identification of reporting units, the review of assumptions, data and calculations used in the annual impairment test, and the identification of changes in events and circumstances that indicate it is more likely than not that a goodwill impairment has occurred between annual impairment tests.

The Company did not design and maintain effective internal controls over the accounting for intangible assets other than goodwill. Specifically, the Company did not design and maintain effective controls to test indefinite-lived intangible assets, separate from goodwill, for impairment at least annually, to evaluate the remaining useful life of definite-lived intangible assets each reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization, and to identify changes in events and circumstances that would indicate intangible assets may be impaired.

The Company did not design and maintain effective information technology general controls at our Woods/TISCO subsidiary. Specifically, the Company did not design and maintain effective controls with respect to segregation of duties, restricted access to programs and data, and change management activities. Consequently, controls that were dependent on the effective operation of information technology were not effectively designed to include adequate review of system generated data used in the operation of the controls and were determined not to be operating effectively. Accordingly, the Company did not maintain effective internal controls over the journal entries, inventory, revenue and receivables, purchasing and payables, payroll, and fixed asset processes at our Woods/TISCO subsidiary.

The Company did not design and maintain effective controls over restricted access and segregation of duties within the SAP system as certain personnel have administrator access to execute certain conflicting transactions. Further, certain personnel have the ability to prepare and post journal entries without an independent review required by someone other than the preparer. Specifically, our internal controls were not designed or operating effectively to

provide reasonable assurance that transactions were appropriately recorded or were properly reviewed for validity, accuracy, and completeness.

These control deficiencies did not result in a material misstatement to the Company’s consolidated financial statements for the year ended December 31, 2012 nor to the unaudited interim condensed consolidated financial statements for the quarter ended March 31, 2013. However, these control deficiencies could result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected. Accordingly, our management has determined that these control deficiencies constitute material weaknesses.

The Company will be amending its Annual Report on Form 10-K for 2012 to reflect the conclusion by the Company's management that ICFR and DCP were not effective as of December 31, 2012.

The Company is in the process of remediating the identified deficiencies in ICFR but is unable at this time to estimate when the remediation effort will be completed.

Changes in internal control over financial reporting

There have been no changes in the Company’s ICFR during the Company’s fiscal quarter ended March 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s ICFR.


PART II	OTHER INFORMATION


ITEM 6.	EXHIBITS

(a) Exhibits:

**31.1 Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 by Joshua L. Collins, Chairman and Chief Executive Officer.

**31.2 Certification pursuant to section 302 of the Sarbanes-Oxley Act of 2002 by Calvin E. Jenness, Senior Vice President and Chief Financial Officer.

**32.1 Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 by Joshua L. Collins, Chairman and Chief Executive Officer. (1)

**32.2 Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002 by Calvin E. Jenness, Senior Vice President and Chief Financial Officer. (1)

*101.INS XBRL Instance Document

*101.SCH XBRL Taxonomy Extension Schema Document

*101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

*101.DEF XBRL Taxonomy Extension Definition Linkbase Document

*101.LAB XBRL Taxonomy Extension Label Linkbase Document

*101.PRE XBRL Taxonomy Extension Presentation Linkbase Document



*	Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.



**	Filed electronically herewith. Copies of such exhibits may be obtained upon written request to:



Blount International, Inc.
P.O. Box 22127
Portland, Oregon 97269-2127

(1) Furnished, not filed.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the duly authorized undersigned.




BLOUNT INTERNATIONAL, INC.
Registrant
/s/ Calvin E. Jenness		/s/ Mark V. Allred
Calvin E. Jenness		Mark V. Allred
Senior Vice President and		Vice President and
Chief Financial Officer		Corporate Controller
(Principal Financial Officer)		(Principal Accounting Officer)

Dated: November 22, 2013

EXHIBIT INDEX