-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RH/W2VVcOCpEkwEZ79qytpBLLTUwi3gmdm+VUvHQXMDBJeoF8vv9mGD/2VP1JnvE W2I+pBalngGNL8J34Dui1w== 0000012355-98-000021.txt : 19980717 0000012355-98-000021.hdr.sgml : 19980717 ACCESSION NUMBER: 0000012355-98-000021 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980716 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980716 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLACK & DECKER CORP CENTRAL INDEX KEY: 0000012355 STANDARD INDUSTRIAL CLASSIFICATION: METALWORKING MACHINERY & EQUIPMENT [3540] IRS NUMBER: 520248090 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-03593 FILM NUMBER: 98667548 BUSINESS ADDRESS: STREET 1: 701 E JOPPA RD CITY: TOWSON STATE: MD ZIP: 21286 BUSINESS PHONE: 4107163900 MAIL ADDRESS: STREET 1: 701 EAST JOPPA ROAD STREET 2: MAIL STOP TW 290 CITY: TOWSON STATE: MD ZIP: 21286 FORMER COMPANY: FORMER CONFORMED NAME: BLACK & DECKER MANUFACTURING CO DATE OF NAME CHANGE: 19850206 8-K 1 FORM 8-K 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) July 16, 1998 ---------------------------- 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) 2 ITEM 5. OTHER EVENTS On July 16, 1998, the Corporation reported its earnings for the three and six months ended June 28, 1998. Attached to this Current Report on Form 8-K as Exhibit 99 is a copy of the Corporation's related press release dated July 16, 1998. 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 1997 and 1998 and scheduled for introduction in 1998; 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, 1997, and updated in Corporation's Quarterly Report on Form 10-Q for the quarter ended March 29, 1998; and the continuation of modest economic growth in the United States and Europe and gradual improvement in the economic environment in Asia. In addition to the foregoing, the Corporation's ability to realize the anticipated benefits during 1998 and in the future of the restructuring actions undertaken in 1998 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. The ability to achieve certain sales and profitability targets and cash flow projections also is dependent upon the Corporation's ability to identify appropriate selected acquisitions that are complementary to the repositioned business units at acquisition prices that are consistent with these objectives. 3 There can be no assurance that the Corporation will consummate the sales of the household products business in Brazil and the glass container-forming and inspection equipment business and complete the recapitalization of the recreational products business. Further, the Corporation's ability to realize aggregate proceeds from the sales of the household products business (excluding certain assets associated with the Corporation's cleaning and lighting products) in North America and Latin America, excluding Brazil, and the glass container-forming and inspection business and from the recapitalization of the recreational products business of $711 million on a gross basis or approximately $550 million on a net basis, is dependent upon, with respect to the sale of the glass container-forming and inspection equipment business and with respect to the recapitalization of the recreational products business, the Corporation's receipt of regulatory and other necessary approvals and the satisfaction of customary closing conditions. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99 Press Release of the Corporation dated July 16, 1998. 4 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/ THOMAS M. SCHOEWE Thomas M. Schoewe Senior Vice President and Chief Financial Officer EX-99 2 PRESS RELEASE DATED JULY 16, 1998 Contact: Barbara B. Lucas Senior Vice President - Public Affairs 410/716-2980 F. Robert Hunter Vice President - Investor Relations 410/716-3979 FOR IMMEDIATE RELEASE: Thursday, July 16, 1998 SUBJECT: Black & Decker Reports Earnings Growth in Second Quarter; Declares Quarterly Dividend TOWSON, MD - The Black & Decker Corporation (NYSE:BDK) announced today that sales for the second quarter of 1998 decreased 1% to $1.17 billion from $1.18 billion in the same period last year. Excluding the effects of foreign currency translation, sales increased 1%, and sales of core operations (Power Tools and Accessories, Security Hardware, Plumbing Products, and Fastening and Assembly Systems) increased 4%. For the first six months of 1998, sales declined 1% to $2.18 billion from $2.20 billion last year. Excluding foreign exchange translation, sales for the period increased 2%, and sales of core businesses increased 5%. Excluding a non-recurring gain on sale of businesses of $4.2 million, net of taxes, or $.04 per share, net earnings were $54.2 million or $.57 per diluted share for the second quarter of 1998, compared to $45.5 million or $.47 per diluted share for the same period last year. Including the non-recurring gain, net earnings were $58.4 million or $.61 per diluted share for the second quarter of 1998. Net earnings for the second quarter of 1998 were reduced by after-tax restructuring-related costs totaling $15.5 million or $.16 per diluted share. (more) Page Two For the first six months of 1998, the Corporation reported a net loss, related to a write-off of goodwill and a restructuring charge in the first quarter, of $913.0 million or $9.65 per share. Because results for the first six months were a loss, the calculation of reported net earnings per share on a diluted basis excludes stock options, which, if included, would be anti-dilutive, and would decrease the per-share loss. For comparative purposes, however, the dilutive effects of these options should be considered when evaluating the Corporation's performance. Excluding non-recurring items consisting of the goodwill write-off, after-tax restructuring charge, and after-tax gain on sale of businesses, net earnings for the first six months would have been $82.8 million or $.86 per share on this diluted basis, a 15% increase over the net earnings of $71.8 million or $.75 per share reported last year. This adjusted net earnings number for 1998 includes $19.3 million ($.20 per share) of after-tax restructuring-related expenses. The Corporation also announced that its Board of Directors declared a quarterly cash dividend of $.12 per share on the Corporation's outstanding common stock payable on September 25, 1998, to stockholders of record at the close of business on September 11, 1998. Commenting on the results, Nolan D. Archibald, Chairman and Chief Executive Officer, said, "Our strategic repositioning activities, as well as solid performance in our core businesses, resulted in a 21% increase over last year in second-quarter earnings per share, excluding the non-recurring gain associated with our current divestiture activities. Sales in our core businesses rose 4% excluding foreign exchange currency effects, as new products continued to generate support among retailers and consumers. Sales in North American Power Tools, Security Hardware, and Plumbing Products were particularly strong, while Fastening and Assembly Systems posted a solid increase. This core growth, however, was largely offset by sales declines, compared to the same period last year, in Household Products, the majority of which we sold at the end of June, and Emhart Glass, the sale of which is scheduled to close in October. (more) Page Three "We completed the sale of our Household Products business on June 26, and, since then, have entered into an agreement to recapitalize True Temper Sports and signed a contract to sell Emhart Glass. These three transactions, which will yield gross cash proceeds of $711 million and net proceeds of approximately $550 million, will complete our divestiture program, enabling us to focus exclusively on our core operations. "We continued to execute our share repurchase program during the quarter, and have purchased a total of nearly three million shares through June. "The restructuring component of our strategic repositioning program also remains on track as we streamline the global manufacturing network in Power Tools and Accessories and substantially reconfigure how that business operates in Europe. We also are in the process of integrating cleaning and lighting product lines, which we chose not to sell with the rest of our Household Products business, into North American consumer power tool operations. Restructuring-related charges during the quarter reflected costs associated with discontinuing some products, as well as costs associated with our plant closures and European business reorganization. "The progress that we have made in reducing and leveraging our cost structure is reflected in an improvement in return on sales for the quarter of nearly two percentage points, from 10.2% last year to 12.1%, excluding goodwill amortization, non-recurring items, and restructuring-related expenses. "With continued progress in the second quarter, free cash flow improved $85 million for the first six months, compared to the same period last year, reflecting improved working capital management." (more) Page Four 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 July 16, 1998. Black & Decker is a leading global manufacturer and marketer of power tools, hardware, and building products used in and around the home and for commercial applications. * * * THE BLACK & DECKER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) (Dollars in Millions Except Per Share Amounts)
Three Months Ended --------------------------------- June 28, 1998 June 29, 1997 --------------- -------------- SALES $ 1,169.7 $ 1,182.2 Cost of goods sold 771.9 761.8 Selling, general, and administrative expenses 285.5 316.1 Gain on sale of businesses 36.5 - --------------- -------------- OPERATING INCOME 148.8 104.3 Interest expense (net of interest income) 29.8 30.6 Other expense 2.7 3.6 --------------- -------------- EARNINGS BEFORE INCOME TAXES 116.3 70.1 Income taxes 57.9 24.6 --------------- -------------- NET EARNINGS $ 58.4 $ 45.5 =============== ============== NET EARNINGS PER COMMON SHARE - BASIC $ 0.62 $ 0.48 =============== ============== Shares Used in Computing Basic Earnings Per Share (in Millions) 94.1 94.5 =============== ============== NET EARNINGS PER COMMON SHARE - ASSUMING DILUTION $ 0.61 $ 0.47 =============== ============== Shares Used in Computing Diluted Earnings Per Share (in Millions) 95.8 96.1 =============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) (Dollars in Millions Except Per Share Amounts)
Six Months Ended --------------------------------- June 28, 1998 June 29, 1997 --------------- -------------- SALES $ 2,178.0 $ 2,197.2 Cost of goods sold 1,430.2 1,412.3 Selling, general, and administrative expenses 565.4 607.3 Write-off of goodwill 900.0 - Restructuring and exit costs 140.0 - Gain on sale of businesses 36.5 - --------------- -------------- OPERATING INCOME (LOSS) (821.1) 177.6 Interest expense (net of interest income) 58.2 61.2 Other expense 2.4 5.9 --------------- -------------- EARNINGS (LOSS) BEFORE INCOME TAXES (881.7) 110.5 Income taxes 31.3 38.7 --------------- -------------- NET EARNINGS (LOSS) $ (913.0) $ 71.8 =============== ============== NET EARNINGS (LOSS) PER COMMON SHARE - BASIC $ (9.65) $ 0.76 =============== ============== Shares Used in Computing Basic Earnings Per Share (in Millions) 94.6 94.4 =============== ============== NET EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $ (9.65) $ 0.75 =============== ============== Shares Used in Computing Diluted Earnings Per Share (in Millions) 94.6 96.1 =============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) (Millions of Dollars)
June 28, 1998 June 29, 1997 --------------- -------------- ASSETS Cash and cash equivalents $ 204.1 $ 126.3 Trade receivables 815.7 719.6 Inventories 765.0 898.1 Other current assets 205.1 180.7 --------------- -------------- TOTAL CURRENT ASSETS 1,989.9 1,924.7 --------------- -------------- PROPERTY, PLANT, AND EQUIPMENT 781.3 878.6 GOODWILL 935.7 1,929.3 OTHER ASSETS 510.7 518.7 --------------- -------------- $ 4,217.6 $ 5,251.3 =============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 89.1 $ 100.1 Current maturities of long-term debt 60.6 49.7 Trade accounts payable 355.3 400.4 Other accrued liabilities 822.3 724.8 --------------- -------------- TOTAL CURRENT LIABILITIES 1,327.3 1,275.0 --------------- -------------- LONG-TERM DEBT 1,658.1 1,796.9 DEFERRED INCOME TAXES 55.6 77.9 POSTRETIREMENT BENEFITS 283.0 305.0 OTHER LONG-TERM LIABILITIES 192.3 142.4 STOCKHOLDERS' EQUITY 701.3 1,654.1 --------------- -------------- $ 4,217.6 $ 5,251.3 =============== ============== SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) (Millions of Dollars) June 28, 1998 June 29, 1997 --------------- -------------- Balance of receivables sold under sale of receivables program $ - $ 136.0 =============== ============== Six Months Ended --------------------------------- June 28, 1998 June 29, 1997 --------------- -------------- Depreciation and amortization $ 81.6 $ 110.5 =============== ============== Capital expenditures $ 59.8 $ 85.0 =============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES THREE MONTHS ENDED JUNE 28, 1998 ANALYSIS OF CHANGES IN SALES (in millions of dollars)
United Consumer States Europe Other Total - -------- --------- -------- -------- --------- Total Sales $ 610.7 $ 279.0 $ 123.3 $ 1,013.0 --------- -------- -------- --------- Unit Volume 6 % 6 % (12)% 3 % Price (1)% - % (1)% (1)% Currency - % (4)% (5)% (2)% --------- -------- -------- --------- 5 % 2 % (18)% - % --------- -------- -------- --------- Commercial - ---------- Total Sales $ 71.6 $ 63.1 $ 22.0 $ 156.7 --------- -------- -------- --------- Unit Volume (5)% (1)% (27)% (8)% Price (1)% 1 % (1)% - % Currency - % (3)% (5)% (2)% --------- -------- -------- --------- (6)% (3)% (33)% (10)% --------- -------- -------- --------- Consolidated - ------------ Total Sales $ 682.3 $ 342.1 $ 145.3 $ 1,169.7 ========= ======== ======== ========= Unit Volume 4 % 5 % (15)% 2 % Price (1)% - % (1)% (1)% Currency - % (4)% (5)% (2)% --------- -------- -------- --------- 3 % 1 % (21)% (1)% ========= ======== ======== =========
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES SIX MONTHS ENDED JUNE 28, 1998 ANALYSIS OF CHANGES IN SALES (in millions of dollars)
United Consumer States Europe Other Total - -------- --------- -------- -------- --------- Total Sales $ 1,094.1 $ 544.6 $ 221.7 $ 1,860.4 --------- -------- -------- --------- Unit Volume 6 % 6 % (8)% 4 % Price (1)% - % (2)% (1)% Currency - % (6)% (5)% (2)% --------- -------- -------- --------- 5 % - % (15)% 1 % --------- -------- -------- --------- Commercial - ---------- Total Sales $ 142.6 $ 130.3 $ 44.7 $ 317.6 --------- -------- -------- --------- Unit Volume (9)% 6 % (21)% (5)% Price - % - % (1)% - % Currency - % (5)% (4)% (3)% --------- -------- -------- --------- (9)% 1 % (26)% (8)% --------- -------- -------- --------- Consolidated - ------------ Total Sales $ 1,236.7 $ 674.9 $ 266.4 $ 2,178.0 ========= ======== ======== ========= Unit Volume 4 % 6 % (11)% 3 % Price (1)% - % (1)% (1)% Currency - % (6)% (5)% (3)% --------- -------- -------- --------- 3 % - % (17)% (1)% ========= ======== ======== =========
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES SUPPLEMENTAL EARNINGS INFORMATION (Unaudited) THREE MONTHS ENDED JUNE 28, 1998 (Dollars in Millions Except Per Share Amounts)
Less: Less: Non-Recurring Restructuring- As Reported Items Related Costs As Adjusted ----------- ------------- ------------- ----------- SALES $1,169.7 $1,169.7 Cost of goods sold 771.9 $(20.0) 751.9 Selling, general, and administrative expenses 285.5 (2.8) 282.7 Gain on sale of businesses 36.5 $ (36.5) - - ----------- ------------- ------------- ----------- OPERATING INCOME 148.8 (36.5) 22.8 135.1 Interest and other expenses 32.5 - - 32.5 ----------- ------------- ------------- ----------- EARNINGS BEFORE INCOME TAXES 116.3 (36.5) 22.8 102.6 Income taxes 57.9 (32.3)(A) 7.3 32.9 ----------- ------------- ------------- ----------- NET EARNINGS $ 58.4 $ (4.2) $ 15.5 $ 69.7 =========== ============= ============= =========== Shares Used in Computing Diluted Earnings Per Share (in Millions) 95.8 95.8 95.8 95.8 =========== ============= ============= =========== NET EARNINGS PER COMMON SHARE - ASSUMING DILUTION $ 0.61 $ (0.04) $ 0.16 $ 0.73 =========== ============= ============= =========== - ------------------------------------------------ (A) Adjustment represents tax effect of gain on sale of businesses.
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES SUPPLEMENTAL EARNINGS INFORMATION (Unaudited) SIX MONTHS ENDED JUNE 28, 1998 (Dollars in Millions Except Per Share Amounts)
Less: Less: Non-Recurring Restructuring- As Reported Items Related Costs As Adjusted ----------- ------------- ------------- ----------- SALES $2,178.0 $2,178.0 Cost of goods sold 1,430.2 $(22.7) 1,407.5 Selling, general, and administrative expenses 565.4 (5.7) 559.7 Write-off of goodwill 900.0 $(900.0) - - Restructuring and exit costs 140.0 (140.0) - - Gain on sale of businesses 36.5 (36.5) - - ----------- ------------- ------------- ----------- OPERATING INCOME (LOSS) (821.1) 1,003.5 28.4 210.8 Interest and other expenses 60.6 - - 60.6 ----------- ------------- ------------- ----------- EARNINGS (LOSS) BEFORE INCOME TAXES (881.7) 1,003.5 28.4 150.2 Income taxes 31.3 7.7(A) 9.1 48.1 ----------- ------------- ------------- ----------- NET EARNINGS (LOSS) $ (913.0) $ 995.8 $ 19.3 $ 102.1 =========== ============= ============= =========== Shares Used in Computing Diluted Earnings Per Share (in Millions) (B) 94.6 96.4 96.4 =========== ============= =========== NET EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $ (9.65) $ 0.20 $ 1.06 =========== ============= =========== - ----------------------------------------------- (A) Adjustment represents net tax effect of gain on sale of businesses and restructuring and exit costs. (B) Option conversion is anti-dilutive due to the loss for the six months. Excluding the goodwill write-off, restructuring charge, gain on sale of businesses, and restructuring related costs, results for the six months would have been positive. Accordingly, 1.8 million shares have been added to the diluted share count on an "as adjusted" basis.
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