UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 26, 1999
---------------------
THE BLACK & DECKER CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 1-1553 52-0248090
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
Towson, Maryland 21286
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 410-716-3900
Not Applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
The Corporation adopted Statement of Financial Accounting Standards (SFAS) No.
131, Disclosures about Segments of an Enterprise and Related Information,
effective December 31, 1998. Selected unaudited supplemental information about
the Corporation's business segments for each of the quarters in the year ended
December 31, 1998, prepared in accordance with the provisions of SFAS No. 131,
has been included as Exhibit 99 to this Current Report on Form 8-K for
informational purposes.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99 Selected unaudited supplemental information about the Corporation's
business segments for each of the quarters in the year ended
December 31, 1998.
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THE BLACK & DECKER CORPORATION
S I G N A T U R E S
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
undersigned hereunto duly authorized.
THE BLACK & DECKER CORPORATION
By /s/STEPHEN F. REEVES
---------------------------
Stephen F. Reeves
Vice President and Controller
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (UNAUDITED)
(Millions of Dollars)
Reportable Business Segments
--------------------------------------------
Power Fastening
Tools &
& Building Assembly
Quarter Ended March 29, 1998 Accessories Products Systems Total
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 581.6 $ 189.6 $ 118.3 $ 889.5
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 31.9 24.8 19.2 75.9
Depreciation and amortization 22.8 6.1 3.2 32.1
Capital expenditures 17.5 9.3 2.0 28.8
Quarter Ended June 28, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 712.7 $ 214.7 $ 117.6 $1,045.0
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 66.5 31.8 20.9 119.2
Depreciation and amortization 21.7 6.5 3.6 31.8
Capital expenditures 13.0 4.3 4.1 21.4
Quarter Ended September 27, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 729.8 $ 216.2 $ 108.3 $1,054.3
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 73.6 32.0 17.7 123.3
Depreciation and amortization 20.8 7.1 3.4 31.3
Capital expenditures 15.5 9.6 4.7 29.8
Quarter Ended December 31, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 922.3 $ 230.6 $ 118.8 $1,271.7
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 121.4 36.6 18.8 176.8
Depreciation and amortization 22.9 7.4 3.2 33.5
Capital expenditures 33.1 13.3 5.4 51.8
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THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (UNAUDITED)
(Millions of Dollars)
Corporate,
Currency Adjustments,
All Translation & Consoli-
Quarter Ended March 29, 1998 Others Adjustments Eliminations dated
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 130.2 $ (11.4) $ -- $1,008.3
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 4.1 (1.8) (8.1) 70.1
Depreciation and amortization -- (.4) 7.1 38.8
Capital expenditures 3.5 (.3) .2 32.2
Quarter Ended June 28, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 135.8 $ (11.1) $ -- $1,169.7
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 8.1 (1.6) (13.4) 112.3
Depreciation and amortization -- (.3) 6.3 37.8
Capital expenditures 6.4 (.3) .1 27.6
Quarter Ended September 27, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ 67.6 $ (14.2) $ -- $1,107.7
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) 4.3 (1.1) 2.1 128.6
Depreciation and amortization -- (.4) 7.0 37.9
Capital expenditures 3.2 (.5) .1 32.6
Quarter Ended December 31, 1998
- ------------------------------------------------------------------------------
Sales to unaffiliated customers $ -- $ 2.5 $ -- $1,274.2
Segment profit (loss) (for
Consolidated, operating
income before restructuring
and exit costs, write-off of
goodwill, and gain on sale
of businesses) -- .1 (3.9) 173.0
Depreciation and amortization -- -- 7.2 40.7
Capital expenditures .2 -- 1.6 53.6
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The reconciliation of segment profit to the Corporation's earnings (loss)
before income taxes for each quarter, in millions of dollars, is as follows:
<TABLE>
<CAPTION>
Quarter Ended
- ------------------------------------------------------------------------------------------------------------------------
March 29, June 28, September 27, December 31,
1998 1998 1998 1998
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Segment profit for total reportable business segments $ 75.9 $ 119.2 $ 123.3 $ 176.8
Segment profit for all other businesses 4.1 8.1 4.3 --
Items excluded from segment profit:
Adjustment of budgeted foreign exchange rates to
actual rates (1.8) (1.6) (1.1) .1
Depreciation of Corporate property and amortization
of goodwill (7.1) (6.3) (7.0) (7.2)
Adjustment to businesses' postretirement benefit
expenses booked in consolidation 8.3 8.2 8.2 (.3)
Adjustment to eliminate net interest and non-operating
expenses from results of certain operations in Brazil,
Mexico, Venezuela, and Turkey 1.5 1.1 1.6 1.5
Other adjustments booked in consolidation directly
related to reportable business segments (1.4) (17.6) .3 (1.7)
Amounts allocated to businesses in arriving at segment
profit in excess of (less than) Corporate center operating
expenses, eliminations, and other amounts identified above (9.4) 1.2 (1.0) 3.8
- ------------------------------------------------------------------------------------------------------------------------
Operating income before restructuring and exit costs, write-
off of goodwill, and gain on sale of businesses 70.1 112.3 128.6 173.0
Restructuring and exit costs 140.0 -- 14.2 10.5
Write-off of goodwill 900.0 -- -- --
Gain on sale of businesses -- 36.5 26.9 51.1
- ------------------------------------------------------------------------------------------------------------------------
Operating income (loss) (969.9) 148.8 141.3 213.6
Interest expense, net of interest income 28.4 29.8 29.1 27.1
Other income (expense) .3 (2.7) (3.8) (1.5)
- ------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before taxes $ (998.0) $ 116.3 $ 108.4 $ 185.0
========================================================================================================================
</TABLE>
Basis of Presentation:
The Corporation operates in three reportable business segments: Power Tools
and Accessories, Building Products, and Fastening and Assembly Systems. The
Power Tools and Accessories segment has worldwide responsibility for the
manufacture and sale of consumer and professional power tools and accessories,
cleaning and lighting products, and electric lawn and garden tools as well as
for product service. In addition, the Power Tools and Accessories segment has
responsibility for the sale of plumbing products to customers outside North
America and for sales of the retained household products business. The Building
Products segment has worldwide responsibility for the manufacture and sale of
security hardware and for the manufacture of plumbing products as well as
responsibility for the sale of plumbing products to customers in North America.
The Fastening and Assembly Systems segment has worldwide responsibility for the
manufacture and sale of fastening and assembly systems.
The Corporation also operated several businesses that do not constitute
reportable business segments. These businesses included the manufacture and sale
of glass container-forming and inspection equipment, as well as recreational and
household products. During 1998, the Corporation completed the sale or
recapitalization of its glass container-forming and inspection equipment
business, Emhart Glass; its recreational products business, True Temper Sports;
and its household products business (excluding certain assets associated with
the Corporation's cleaning and lighting products) in North America, Latin
America (excluding Brazil), and Australia. Because True Temper Sports, Emhart
Glass, and the household products business in North America, Latin America, and
Australia are not treated as discontinued operations under generally accepted
accounting principles, they remain a part of the Corporation's reported results
from continuing operations, and the results of operations and financial
positions of these businesses have been included in the consolidated financial
statements through the dates of consummation of the respective transactions.
Amounts relating to these businesses are included in the segment table above
under the caption "All Others". The results of the household products business
included under the caption "All Others" are based upon certain assumptions and
allocations. The household products businesses sold during 1998 were jointly
operated with the cleaning and lighting products businesses retained by the
Corporation. Further, the Corporation's divested household products businesses
in Australia and Latin America (excluding Brazil) were operated jointly with the
Corporation's power tools and accessories businesses. Accordingly, the results
of the household products businesses included in the segment table under the
caption "All Others" were determined using certain assumptions and allocations
that the Corporation believes are reasonable under the circumstances.
The Corporation assesses the performance of its reportable business
segments based upon a number of factors, including segment profit. In general,
segments follow the same accounting policies as those described in Note 1 of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 1997,
as updated through the Corporation's Quarterly Reports on Form 10-Q during the
year ended December 31, 1998, except with respect to foreign currency
translation and except as further indicated below. The financial statements of a
segment's operating units located outside the United States, except those units
operating in highly inflationary economies, are measured using the local
currency as the functional currency. For these units located outside the United
States, segment assets and elements of segment profit are translated using
budgeted rates of exchange. Budgeted rates of exchange are established annually,
and once established all prior period segment data is restated to reflect the
newly established budgeted rates of exchange. The amounts included in the
segment table above under the captions "Reportable Business Segments", "All
Other", and "Corporate, Adjustments, & Eliminations" are reflected at the
Corporation's current budgeted exchange rates. The amounts included in the
segment table above under the caption "Currency Translation Adjustments"
represent the difference between consolidated amounts determined using budgeted
rates of exchange and those determined based upon the rates of exchange
applicable under accounting principles generally accepted in the United States.
Segment profit excludes interest income and expense, non-operating income
and expense, goodwill amortization, adjustments to eliminate intercompany profit
in inventory, and income tax expense. In addition, segment profit excludes
restructuring and exit costs and, for 1998, the write-off of goodwill and gain
on sale of businesses. For certain operations located in Brazil, Mexico,
Venezuela, and Turkey, segment profit is reduced by net interest expense and
non-operating expenses. In determining segment profit, expenses relating to
pension and other postretirement benefits are based solely upon estimated
service costs. Corporate expenses are allocated to each segment based upon
budgeted amounts. No corporate expenses have been allocated to divested
businesses. While sales and transfers between segments are accounted for at cost
plus a reasonable profit, the effects of intersegment sales are excluded from
the computation of segment profit. Intercompany profit in inventory is excluded
from segment assets and is recognized as a reduction of cost of sales by the
selling segment when the related inventory is sold to an unaffiliated customer.
Because the Corporation compensates the management of its various businesses on,
among other factors, segment profit, the Corporation may elect to record certain
segment-related income or expense items of an unusual or nonrecurring nature in
consolidation rather than reflect such items in segment profit. In addition,
certain segment-related items of income or expense may be recorded in
consolidation in one period and transferred to the Corporation's various
segments in a later period.
