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) April 20, 2000
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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)
701 East Joppa Road, Towson, Maryland 21286
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(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
On April 20, 2000, the Corporation reported its earnings for the three months
ended April 2, 2000. Attached to this Current Report on Form 8-K as Exhibit 99
is a copy of the Corporation's related press release dated April 20, 2000.
FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K includes statements that constitute
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934
and that are intended to come within the safe harbor protection provided by
those sections. By their nature, all forward-looking statements involve risks
and uncertainties. Actual results may differ materially from those
contemplated by the forward-looking statements for a number of reasons,
including but not limited to: market acceptance of the new products introduced
in 1999 and 2000 and scheduled for introduction in the balance of 2000; the
level of sales generated from these new products relative to expectations,
based on the existing investments in productive capacity and commitments of
the Corporation to fund advertising and product promotions in connection with
the introduction of these new products; the ability of the Corporation and its
suppliers to meet scheduled timetables of new product introductions;
unforeseen competitive pressure or other difficulty in maintaining mutually
beneficial relationships with key distributors or penetrating new channels of
distribution; adverse changes in currency exchange rates or raw material
commodity prices, both in absolute terms and relative to competitors' risk
profiles; delays in or unanticipated inefficiencies resulting from
manufacturing and administrative reorganization actions in progress or
contemplated by the strategic repositioning described in the Corporation's
Annual Report on Form 10-K for the year ended December 31, 1999; the degree of
working capital investment required to meet customer service levels; gradual
improvement in the economic environment in Asia and Latin America; and
economic growth in North America which more than offsets economic softness in
Europe.
In addition to the foregoing, the Corporation's ability to realize
the anticipated benefits of the restructuring actions undertaken in 1998 and
1999 is dependent upon current market conditions, as well as the timing and
effectiveness of the relocation or consolidation of production and
administrative processes. The ability to realize the benefits inherent in the
balance of the restructuring actions is dependent on the selection and
implementation of economically viable projects in addition to the
restructuring actions taken to date.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 99 Press Release of the Corporation dated April 20, 2000.
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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 - Finance
Contact: Barbara B. Lucas
Senior Vice President - Public Affairs
410/716-2980
Mark M. Rothleitner
Vice President - Investor Relations
and Treasurer
410/716-3979
FOR IMMEDIATE RELEASE: Thursday, April 20, 2000
SUBJECT: Black & Decker Reports First-Quarter 2000 Sales Up 6%; Earnings Per
Share Up 23% Excluding Non-Recurring Gain
TOWSON, MD - The Black & Decker Corporation (NYSE:BDK) today announced that
net earnings for the first quarter of 2000 were $60.2 million, or $.69 per
diluted share, compared to net earnings of $39.2 million, or $.44 per diluted
share, for the first quarter last year. The results included a pre-tax gain of
$20.1 million ($13.1 million net of tax, or $.15 per diluted share) related to
the 1998 recapitalization of True Temper Sports. Excluding this non-recurring
gain, net earnings for the first quarter of 2000 were $47.1 million, and
earnings per diluted share were $.54, up 23% versus the first quarter of 1999.
Sales for the first quarter of 2000 rose to $1.04 billion, 6% higher
than the $978.5 million reported for the same period last year. Excluding the
effects of foreign currency translation, sales increased 9% over the same
period last year.
A decline in the Corporation's effective tax rate, prior to the
impact of the non-recurring gain related to True Temper, from 32% in 1999 to
30% in 2000 increased earnings per diluted share approximately $.02 for the
first quarter of 2000. The Corporation also reported that it repurchased
approximately 2.4 million shares of its common stock during the quarter. The
repurchase had no material effect on per-share earnings.
(more)
<PAGE>
Page Two
Commenting on the results, Nolan D. Archibald, Chairman and Chief
Executive Officer, said, "Black & Decker is off to an excellent start in 2000.
Sales for the first quarter were well ahead of last year's level. New product
introductions, especially in the lawn and garden category, and benefits from
products launched last year contributed to sales growth.
"Power Tools and Accessories reported another impressive quarter,
with worldwide sales up 13% and operating profit up dramatically. The sales
growth was broad-based, extending beyond North America, where we have had
consistently strong performance, to Europe and other international regions.
The professional business continued to benefit from solid demand for DEWALT(R)
cordless tools, including the newly introduced 24-volt high-performance line.
Blower/vacuums and the Edge Hog(TM) lawn edger in the United States and the
4x4(TM) lawn mower in Europe contributed to sales gains in the consumer
business. While North American Power Tools achieved the most substantial
increase in operating profit, our Latin American and Asian units also reported
improved results.
"Sales in the Hardware and Home Improvement segment were down 2% for
the quarter, as a decline in revenues at Kwikset outweighed a healthy increase
at Price Pfister. Similarly, lower margins at Kwikset offset substantial
improvement in Price Pfister's operating results. To improve efficiencies, we
continued to execute our plan to rationalize manufacturing capacity and
consolidate support functions, combine distribution with that of power tools
and accessories, and transition our pack-to-order capability to our
distribution center at Fort Mill, South Carolina.
"Fastening and Assembly Systems sales were up a solid 8%, reflecting
continued strength in the North American market and strong sales growth in
Asia. Operating profit was 12% higher than in the first quarter last year.
This is the 21st consecutive quarter in which this business has reported
year-over-year improvement in operating profit.
(more)
<PAGE>
Page Three
"The gain associated with the recapitalization of True Temper Sports
relates to a $25 million note, which we received in 1998, and a small equity
interest, valued at approximately $4 million, that we retained in the
business. Due to True Temper's highly leveraged position and the lack of an
active market for its note, we established a full reserve for the note. In the
first quarter of this year, we sold the note along with our interest in True
Temper for $25 million in cash, generating a pre-tax gain of $20.1 million.
"This very strong first quarter establishes a solid base for
achieving our sales and earnings objectives for 2000. We are encouraged by the
continued success of our Power Tools and Accessories and our Fastening and
Assembly Systems businesses, and by the progress being made at Price Pfister.
Exciting new products are slated for introduction by each of our businesses
this year, our Six Sigma and Supply Chain initiatives are very much on track,
and we are confident that actions underway in the Hardware and Home
Improvement group will have a positive impact on our results for the year."
This release includes forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. By their nature, all forward-looking statements involve
risks and uncertainties. For a more detailed discussion of the risks and
uncertainties that may affect Black & Decker's operating and financial results
and its ability to achieve the financial objectives discussed in this press
release, interested parties should review Black & Decker's reports filed with
the Securities and Exchange Commission, including the Current Report on Form
8-K, filed April 20, 2000.
Black & Decker is a leading global manufacturer and marketer of power
tools, hardware, and home improvement products used in and around the home and
for commercial applications.
* * *
<PAGE>
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
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April 2, 2000 April 4, 1999
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SALES $ 1,037.6 $ 978.5
Cost of goods sold 674.6 628.2
Selling, general, and
administrative expenses 271.5 271.9
Gain on sale of business 20.1 -
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OPERATING INCOME 111.6 78.4
Interest expense
(net of interest income) 23.8 22.2
Other (income) expense .4 (1.5)
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EARNINGS BEFORE INCOME TAXES 87.4 57.7
Income taxes 27.2 18.5
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NET EARNINGS $ 60.2 $ 39.2
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NET EARNINGS PER COMMON SHARE
- BASIC $ .70 $ .45
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Shares Used in Computing Basic
Earnings Per Share (in Millions) 86.0 87.3
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NET EARNINGS PER COMMON SHARE
- ASSUMING DILUTION $ .69 $ .44
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Shares Used in Computing Diluted
Earnings Per Share (in Millions) 86.9 88.6
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<PAGE>
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
April 2, 2000
(Unaudited) December 31, 1999
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ASSETS
Cash and cash equivalents $ 131.0 $ 147.3
Trade receivables 788.7 823.2
Inventories 813.0 751.0
Other current assets 193.2 189.9
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TOTAL CURRENT ASSETS 1,925.9 1,911.4
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PROPERTY, PLANT, AND EQUIPMENT 752.3 739.6
GOODWILL 726.3 743.4
OTHER ASSETS 611.8 618.3
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$ 4,016.3 $ 4,012.7
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LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $ 324.3 $ 183.2
Current maturities of long-term debt 249.2 213.2
Trade accounts payable 404.5 367.3
Other accrued liabilities 679.4 809.0
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TOTAL CURRENT LIABILITIES 1,657.4 1,572.7
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LONG-TERM DEBT 806.8 847.1
DEFERRED INCOME TAXES 243.5 243.8
POSTRETIREMENT BENEFITS 245.4 246.3
OTHER LONG-TERM LIABILITIES 300.4 301.7
STOCKHOLDERS' EQUITY 762.8 801.1
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$ 4,016.3 $ 4,012.7
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<PAGE>
<TABLE>
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS (Unaudited)
(Millions of Dollars)
<CAPTION>
Reportable Business Segments
----------------------------------------------
Power Hardware Fastening Currency Corporate,
Three Months Ended Tools & & Home & Assembly Translation Adjustments,
April 2, 2000 Accessories Improvement Systems Total Adjustment & Eliminations Consolidated
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Sales to unaffiliated
customers $706.0 $ 204.8 $ 136.3 $1,047.1 $ (9.5) $ - $1,037.6
Segment profit (loss)
(for Consolidated,
operating income before
gain on sale of business) 55.4 19.6 23.4 98.4 (1.2) (5.7) 91.5
Depreciation and amortization 21.7 10.0 4.0 35.7 (.1) 6.7 42.3
Capital expenditures 52.2 7.3 7.0 66.5 (.1) .2 66.6
Three Months Ended
April 4, 1999
- ----------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated
customers $625.6 $ 208.8 $ 126.0 $ 960.4 $ 18.1 $ - $ 978.5
Segment profit (loss) (for
Consolidated,
operating income) 38.4 25.0 20.9 84.3 1.6 (7.5) 78.4
Depreciation and amortization 20.7 8.7 3.9 33.3 .4 7.2 40.9
Capital expenditures 19.3 7.0 3.1 29.4 .5 .1 30.0
</TABLE>
The reconciliation of segment profit to the Corporation's earnings before
income taxes, in millions of dollars, is as follows:
Three Months Ended
- --------------------------------------------------------------------------------
April 2, 2000 April 4, 1999
- --------------------------------------------------------------------------------
Segment profit for total reportable
business segments $ 98.4 $ 84.3
Items excluded from segment profit:
Adjustment of budgeted foreign
exchange rates to actual rates (1.2) 1.6
Depreciation of Corporate property
and amortization of goodwill (6.7) (7.2)
Adjustment to businesses'
postretirement benefit expenses
booked in consolidation 9.5 8.2
Adjustment to eliminate net interest
and non-operating expenses from
results of certain operations in Brazil,
Mexico, Venezuela, and Turkey .1 .5
Other adjustments booked in consolidation
directly related to reportable
business segments (7.0) (3.7)
Amounts allocated to businesses in
arriving at segment profit in excess of
(less than) Corporate center operating
expenses, eliminations, and other
amounts identified above (1.6) (5.3)
- --------------------------------------------------------------------------------
Operating income before gain on sale of business 91.5 78.4
Gain on sale of business 20.1 -
- --------------------------------------------------------------------------------
Operating income 111.6 78.4
Interest expense, net of interest income 23.8 22.2
Other (income) expense .4 (1.5)
- --------------------------------------------------------------------------------
Earnings before income taxes $ 87.4 $ 57.7
================================================================================
<PAGE>
Basis of Presentation:
The Corporation operates in three reportable business segments: Power
Tools and Accessories, Hardware and Home Improvement, 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, electric 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 security
hardware to customers in Mexico, Central America, the Caribbean, and South
America; for the sale of plumbing products to customers outside the United
States and Canada; and for sales of the retained portion of the household
products business. The Hardware and Home Improvement segment has worldwide
responsibility for the manufacture and sale of security hardware (except for
the sale of security hardware in Mexico, Central America, the Caribbean, and
South America). It also has responsibility for the manufacture of plumbing
products and for the sale of plumbing products to customers in the United
States and Canada. The Fastening and Assembly Systems segment has worldwide
responsibility for the manufacture and sale of fastening and assembly systems.
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,
1999, 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 generally 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 updated to reflect the
translation of segment assets and elements of segment profit at the current
year's budgeted rates of exchange. The amounts included in the preceding
segment table under the captions "Reportable Business Segments," and
"Corporate, Adjustments, & Eliminations" are reflected at the Corporation's
budgeted rates of exchange for 2000. The amounts included in the preceding
segment table under the caption "Currency Translation Adjustments" represent
the difference between consolidated amounts determined using the budgeted
rates of exchange for 2000 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 the gain on sale of business. 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. 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
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.
