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: Friday, December 15, 2000
SUBJECT: Black & Decker Lowers Earnings Expectations for Fourth Quarter 2000 and
for 2001
TOWSON, MD - The Black & Decker Corporation (NYSE:BDK) today announced that, due
primarily to significantly lower-than-anticipated sales in U.S. Power Tools and
Accessories and earnings declines in its European power tools business, earnings
for the fourth quarter of 2000, excluding non-recurring items, are anticipated
to be $.95 - $1.05 per diluted share. Consequently, diluted earnings per share
for the full year, excluding non-recurring items, are expected to be $3.48 -
$3.58 versus $3.40 in 1999.
Sales for the fourth quarter of 2000 are likely to be approximately 6%
lower than in the fourth quarter of 1999. Although some manufacturing operations
have been closed for the remainder of the year in order to manage inventory
levels, the Corporation anticipates that year-end inventory will be
approximately $800 million.
The Corporation also indicated that, if economic weakness in the U.S. and
Europe continues, it anticipates that sales and diluted earnings per share will
be flat or down modestly for the first half of 2001 versus the same period of
2000. For the full year 2001, however, sales, excluding foreign currency
effects, and diluted earnings per share are expected to increase approximately
4% and approximately 10%, respectively, over 2000 levels, reflecting the
significant number of new products scheduled for introduction in the second half
of the year and anticipated expense reductions throughout the year. The
Corporation will provide further information on the outlook for 2001 when it
announces 2000 earnings in January.
(more)
<PAGE>
Page Two
Nolan D. Archibald, Chairman and Chief Executive Officer, commented, "The
slowdown in the U.S. and European economies and the related impact on
fourth-quarter sales, particularly because of inventory adjustments by some of
our major power tools and accessories customers, was much more substantial than
we had expected. As a result, our prior sales and earnings estimates will not be
achieved. Our current view is that operating income in Power Tools and
Accessories will be down from the fourth quarter of 1999 because of lower sales
and the negative impact of price reductions, especially in our accessories
business, in anticipation of higher sales volumes that have not materialized
during the quarter. In addition, operating margins in our European power tools
business remain under strong pressure due to currency, price competition in
consumer power tools, lower manufacturing volumes, and incremental costs
associated with the start-up of the central distribution facility. The temporary
shutdown of some power tool plants around the world to reduce inventories also
will have a negative effect on margins in the quarter.
"Having met or exceeded Wall Street expectations for 15 consecutive
quarters, we are particularly disappointed with these developments. We are
confident, however, that we have made the right investments to achieve long-term
growth in our core power tools and accessories business and are better
positioned than our competitors. We have excellent products, leading market
share positions, and prime shelf space in our retail channels, and we continue
to strengthen our share position, especially in our U.S. professional and
consumer tool businesses. Our strategy to invest internally in engineering and
other new-product resources has produced great success in developing our DEWALT
franchise and reinvigorating our Black & Decker consumer tool business. It has
given us a competitive edge in the marketplace that will enable us to withstand
this slowdown and regain momentum as economic conditions improve, and has
fundamentally strengthened our company for the long term. We intend to maintain
our commitment to strengthening our new-product capabilities and believe that
this strategy will pay off handsomely in the second half of 2001 and beyond.
"We anticipate that the slower U. S. and European economies and challenges
in our European business will continue into the first half of 2001. In response,
we are taking actions to realign our expense structure to our new sales
estimate. In addition, a wide range of innovative new products and more sales
from new DEWALT products than ever before will have a significant positive
impact on the second half of the year. In conjunction with our expense reduction
efforts, these new products should enable us to increase sales and operating
income in the second half of 2001.
(more)
<PAGE>
Page Three
"Although sales in our Hardware and Home Improvement and Fastening and
Assembly Systems businesses are also weaker than expected due to the slowing
U.S. economy, fourth-quarter sales in each of these segments are likely to be
flat or up slightly versus last year. In comparison to the fourth quarter of
1999, operating income is expected to improve in Hardware and Home Improvement
and to decline modestly in Fastening and Assembly Systems, primarily due to
sales mix and pricing pressure."
The Corporation will hold a conference call today at 10:00AM EST to discuss
its business performance. A webcast of the call will take place simultaneously
and can be accessed by visiting www.vcall.com. A replay of the call will be
available at Vcall's website through 5:00PM EST, Monday, December 18, 2000.
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 December 15, 2000.
Black & Decker is a leading global manufacturer and marketer of power tools
and accessories, hardware and home improvement products, and technology-based
fastening systems.
# # #
