-----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, UTYVHm4ENUVH4O1ehBABky6xjtqDpvVx3Xi13Ai71u18eDgjOMS/BomYwqE6oRkq cgR23qkfgHR5hpP5MyWh2w== 0000012355-98-000030.txt : 19981015 0000012355-98-000030.hdr.sgml : 19981015 ACCESSION NUMBER: 0000012355-98-000030 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981014 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981014 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: 98725356 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) October 14, 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 October 14, 1998, the Corporation reported its earnings for the three and nine months ended September 27, 1998. Attached to this Current Report on Form 8-K as Exhibit 99 is a copy of the Corporation's related press release dated October 14, 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 June 28, 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- ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS Exhibit 99 Press Release of the Corporation dated October 14, 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/STEPHEN F. REEVES --------------------------- Stephen F. Reeves Vice President and Controller EX-99 2 PRESS RELEASE DATED OCTOBER 14, 1998 Contact: Barbara B. Lucas Senior Vice President - Public Affairs 410/716-2980 F. Robert Hunter, III Vice President - Investor Relations 410/716-3979 FOR IMMEDIATE RELEASE: Wednesday, October 14, 1998 SUBJECT: Black & Decker Reports Earnings Improvement in Third Quarter TOWSON, MD - The Black & Decker Corporation (NYSE:BDK) announced today that net earnings for the third quarter of 1998 were $66.6 million or 72 cents per diluted share compared to $58.4 million or 60 cents per diluted share for the same period of 1997. Excluding non-recurring items consisting of a $7.7 million after-tax charge (8 cents per diluted share) for restructuring under a two-year restructuring program announced in January 1998 and a $9.2 million after-tax gain (10 cents per diluted share) on the sale of businesses, net earnings were $65.1 million or 70 cents per diluted share, an increase of 17% over diluted earnings per share for the same period last year. Net earnings for the third quarter included after-tax restructuring-related costs of $4.3 million or 5 cents per diluted share. Excluding non-recurring items and restructuring-related costs, earnings per diluted share increased 25% for the quarter compared to the same period last year. Sales for third quarter of 1998 decreased 10% to $1.11 billion from $1.22 billion in the same period last year. The decline related substantially to non-core businesses. Excluding the effects of foreign currency translation, sales for the quarter increased 3% in core operations, which consist of Power Tools and Accessories (excluding cleaning and lighting products), Security Hardware, Plumbing Products, and Fastening Systems. (more) Page Two For the first nine months of 1998, the Corporation reported a net loss, related to a write-off of goodwill and a significant restructuring charge in the first quarter, of $846.4 million or $9.06 per share. Because results for the first nine 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 charges, and after-tax gains on the sale of businesses, net earnings for the first nine months of 1998 would have been $147.9 million or $1.55 per share on this diluted basis compared to $130.2 million or $1.35 per diluted share reported for the same period last year. This represents a 15% increase in earnings per share. The adjusted net earnings amount for 1998 includes after-tax restructuring-related costs of $23.6 million or 25 cents per share. Excluding non-recurring items and restructuring-related costs, earnings per diluted share increased 33% for the first nine months compared to the same period last year. For the first nine months of 1998, sales declined 4% to $3.29 billion from $3.42 billion in the same period last year. Excluding the effects of foreign currency translation, sales for the nine-month period increased 4% in core operations. The Corporation also announced that, through the end of the third quarter, it had repurchased approximately 8.1 million of its outstanding shares of common stock. In January 1998, the Corporation's Board of Directors authorized the repurchase over a two-year period of up to 10% of then-outstanding shares, or approximately 9.5 million shares. Nolan D. Archibald, Chairman and Chief Executive Officer, commented, "Our earnings improvement for the quarter and year-to-date reflect a combination of solid operating performance in most core businesses and benefits from our strategic repositioning program. (more) Page Three "Restructuring is a key element of that program. During the quarter, we continued to phase out certain manufacturing facilities, sold the Singapore plant that we closed recently, and made substantial progress in streamlining the Power Tools and Accessories business in Europe. We also completed a U.S.-based voluntary retirement program in which more than 550 employees participated. "Having closed on the sale of Emhart Glass late in the third quarter and the recapitalization of True Temper Sports at the beginning of the fourth quarter, our divestiture program has been successfully completed. Net consideration of approximately $550 million exceeded our original estimate. Cash proceeds have been used in share repurchase and debt reduction programs. "In terms of business operations during the quarter, sales in North American Power Tools increased significantly on the strength of the DEWALT professional tool business and new products. European Power Tools also had solid sales growth. Despite weak economic conditions in Latin America and Asia, profitability in worldwide Power Tools and Accessories rose at a double-digit rate. "Security Hardware reported a healthy sales gain compared to the same period in 1997, and Plumbing Products sales fell slightly short of the level reported in a strong quarter last year. Operating income in both of these businesses was lower than last year. "While sales in Fastening Systems declined due to the recent General Motors strike and the slowdown in the Asian automotive industry, this business posted a solid increase in operating income. "Through the first nine months of 1998, free cash flow was a use of $50 million, which represents an improvement of $116 million compared to the same period last year and reflects improved working capital management. (more) Page Four "The combined effect of the sale of Household Products operations in June and weakness in the glass machinery business that was sold at the end of the quarter accounted for virtually all of our sales decline in the quarter. While the exclusion of all three divested businesses will have a substantial effect on sales and earnings comparisons in the fourth quarter, we believe that our remaining core businesses will perform well during this important season. "In summary, we are pleased with our rate of progress in strategically repositioning Black & Decker. Global restructuring is on track to deliver $100 million of annualized savings; we have completed the divestiture of non-strategic and under-performing businesses for higher-than-expected proceeds; and we are well ahead of schedule in our share repurchase program." 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 October 14, 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 -------------------------------------- September 27, 1998 September 28, 1997 ------------------ ------------------ SALES $ 1,107.7 $ 1,224.9 Cost of goods sold 709.0 788.9 Selling, general, and administrative expenses 270.1 309.3 Restructuring and exit costs 14.2 - Gain on sale of businesses 26.9 - ------------------ ------------------ OPERATING INCOME 141.3 126.7 Interest expense (net of interest income) 29.1 32.7 Other expense 3.8 4.2 ------------------ ------------------ EARNINGS BEFORE INCOME TAXES 108.4 89.8 Income taxes 41.8 31.4 ------------------ ------------------ NET EARNINGS $ 66.6 $ 58.4 ================== ================== NET EARNINGS PER COMMON SHARE - BASIC $ 0.73 $ 0.62 ================== ================== Shares Used in Computing Basic Earnings Per Share (in Millions) 90.9 94.8 ================== ================== NET EARNINGS PER COMMON SHARE - ASSUMING DILUTION $ 0.72 $ 0.60 ================== ================== Shares Used in Computing Diluted Earnings Per Share (in Millions) 92.6 96.9 ================== ================== THE BLACK & DECKER CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS (Unaudited) (Dollars in Millions Except Per Share Amounts) Nine Months Ended -------------------------------------- September 27, 1998 September 28, 1997 ------------------ ------------------ SALES $ 3,285.7 $ 3,422.1 Cost of goods sold 2,139.2 2,201.2 Selling, general, and administrative expenses 835.5 916.6 Write-off of goodwill 900.0 - Restructuring and exit costs 154.2 - Gain on sale of businesses 63.4 - ------------------ ------------------ OPERATING INCOME (LOSS) (679.8) 304.3 Interest expense (net of interest income) 87.3 93.9 Other expense 6.2 10.1 ------------------ ------------------ EARNINGS (LOSS) BEFORE INCOME TAXES (773.3) 200.3 Income taxes 73.1 70.1 ------------------ ------------------ NET EARNINGS (LOSS) $ (846.4) $ 130.2 ================== ================== NET EARNINGS (LOSS) PER COMMON SHARE - BASIC $ (9.06) $ 1.38 ================== ================== Shares Used in Computing Basic Earnings Per Share (in Millions) 93.4 94.5 ================== ================== NET EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $ (9.06) $ 1.35 ================== ================== Shares Used in Computing Diluted Earnings Per Share (in Millions) 93.4 96.4 ================== ================== THE BLACK & DECKER CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET (Unaudited) (Millions of Dollars) September 27, 1998 September 28, 1997 ------------------ ------------------ ASSETS Cash and cash equivalents $ 143.3 $ 187.3 Trade receivables 815.8 856.5 Inventories 749.3 924.1 Other current assets 180.0 120.3 ------------------ ------------------ TOTAL CURRENT ASSETS 1,888.4 2,088.2 ------------------ ------------------ PROPERTY, PLANT, AND EQUIPMENT 740.9 875.2 GOODWILL 839.4 1,880.6 OTHER ASSETS 489.4 529.0 ------------------ ------------------ $ 3,958.1 $ 5,373.0 ================== ================== LIABILITIES AND STOCKHOLDERS' EQUITY Short-term borrowings $ 61.0 $ 122.8 Current maturities of long-term debt 60.4 40.1 Trade accounts payable 366.7 398.1 Other accrued liabilities 776.7 664.7 ------------------ ------------------ TOTAL CURRENT LIABILITIES 1,264.8 1,225.7 ------------------ ------------------ LONG-TERM DEBT 1,671.3 1,879.1 DEFERRED INCOME TAXES 55.0 80.4 POSTRETIREMENT BENEFITS 265.5 300.6 OTHER LONG-TERM LIABILITIES 183.8 193.8 STOCKHOLDERS' EQUITY 517.7 1,693.4 ------------------ ------------------ $ 3,958.1 $ 5,373.0 ================== ================== SUPPLEMENTAL FINANCIAL INFORMATION (Unaudited) (Millions of Dollars) September 27, 1998 September 28, 1997 ------------------ ------------------ Balance of receivables sold under sale of receivables program $ - $ 78.0 ================== ================== Nine Months Ended --------------------------------------- September 27, 1998 September 28, 1997 ------------------ ------------------ Depreciation and amortization $ 122.3 $ 163.1 ================== ================== Capital expenditures $ 92.4 $ 132.2 ================== ================== THE BLACK & DECKER CORPORATION AND SUBSIDIARIES THREE MONTHS ENDED SEPTEMBER 27,1998 ANALYSIS OF CHANGES IN SALES (in millions of dollars) United Core Consumer States Europe Other Total - ------------- -------- -------- ------- -------- Total Sales $ 579.8 $ 257.7 $ 88.5 $ 926.0 -------- -------- ------- -------- Unit Volume 8 % 5 % (9)% 6 % Price (1)% - % (1)% (1)% Currency - % 1 % (8)% (1)% -------- -------- ------- -------- 7 % 6 % (18)% 4 % -------- -------- ------- -------- Core Commercial - --------------- Total Sales $ 51.5 $ 39.0 $ 15.7 $ 106.2 -------- -------- ------- -------- Unit Volume (7)% 17 % (12)% (1)% Price (2)% - % (2)% (2)% Currency - % 2 % (14)% (2)% -------- -------- ------- -------- (9)% 19 % (28)% (5)% -------- -------- ------- -------- Household Products Business in North America, Australia and Latin America ("HPG"), Emhart Glass, and True Temper Sports Total Sales $ 43.3 $ 26.6 $ 5.6 $ 75.5 -------- -------- ------- -------- Consolidated - ------------ Total Sales $ 674.6 $ 323.3 $ 109.8 $1,107.7 ======== ======== ======= ======== Core Businesses: Unit Volume 6 % 6 % (6)% 4 % Price (1)% - % (1)% (1)% Currency - % 1 % (7)% (1)% -------- -------- ------- -------- 5 % 7 % (14)% 2 % -------- -------- ------- -------- HPG, Emhart Glass, and True Temper Sports (13)% (3)% (26)% (12)% -------- -------- ------- -------- Total Change (8)% 4 % (40)% (10)% ======== ======== ======= ======== THE BLACK & DECKER CORPORATION AND SUBSIDIARIES NINE MONTHS ENDED SEPTEMBER 27,1998 ANALYSIS OF CHANGES IN SALES (in millions of dollars) United Core Consumer States Europe Other Total - ------------- -------- -------- ------- -------- Total Sales $1,536.9 $ 802.3 $ 254.3 $2,593.5 -------- -------- ------- -------- Unit Volume 9 % 6 % (9)% 6 % Price (1)% - % (1)% (1)% Currency - % (4)% (7)% (2)% -------- -------- ------- -------- 8 % 2 % (17)% 3 % -------- -------- ------- -------- Core Commercial - --------------- Total Sales $ 173.4 $ 116.2 $ 50.9 $ 340.5 -------- -------- ------- -------- Unit Volume - % 14 % (9)% 3 % Price (1)% - % (1)% (1)% Currency - % (4)% (9)% (3)% -------- -------- ------- -------- (1)% 10 % (19)% (1)% -------- -------- ------- -------- Household Products Business in North America, Australia and Latin America ("HPG"), Emhart Glass, and True Temper Sports Total Sales $ 201.0 $ 79.7 $ 71.0 $ 351.7 -------- -------- ------- -------- Consolidated - ------------ Total Sales $1,911.3 $ 998.2 $ 376.2 $3,285.7 ======== ======== ======= ======== Core Businesses: Unit Volume 7 % 6 % (7)% 5 % Price (1)% - % (1)% (1)% Currency - % (3)% (5)% (2)% -------- -------- ------- -------- 6 % 3 % (13)% 2 % -------- -------- ------- -------- HPG, Emhart Glass, and True Temper Sports (7)% (1)% (13)% (6)% -------- -------- ------- -------- Total Change (1)% 2 % (26)% (4)% ======== ======== ======= ======== THE BLACK & DECKER CORPORATION AND SUBSIDIARIES SUPPLEMENTAL EARNINGS INFORMATION (Unaudited) THREE MONTHS ENDED SEPTEMBER 27, 1998 (Dollars in Millions Except Per Share Amounts) Less: Less: Non- Restructuring- As Recurring Related As Reported Items Costs Adjusted -------- -------- ---------- -------- SALES $1,107.7 $1,107.7 Cost of goods sold 709.0 $ (3.8) 705.2 Selling, general, and administrative expenses 270.1 (2.5) 267.6 Restructuring and exit costs 14.2 $ (14.2) - - Gain on sale of businesses 26.9 (26.9) - - -------- -------- ---------- -------- OPERATING INCOME 141.3 (12.7) 6.3 134.9 Interest and other expenses 32.9 - - 32.9 -------- -------- ---------- -------- EARNINGS BEFORE INCOME TAXES 108.4 (12.7) 6.3 102.0 Income taxes 41.8 (11.2)(A) 2.0 32.6 -------- -------- ---------- -------- NET EARNINGS $ 66.6 $ (1.5) $ 4.3 $ 69.4 ======== ======== ========== ======== Shares Used in Computing Diluted Earnings Per Share (in Millions) 92.6 92.6 92.6 92.6 ======== ======== ========== ======== NET EARNINGS PER COMMON SHARE - ASSUMING DILUTION $ 0.72 $ (0.02) $ 0.05 $ 0.75 ======== ======== ========== ======== - ------------------------------------------------- (A) Adjustment represents net tax effect of gain on sale of businesses and restructuring and exit costs. THE BLACK & DECKER CORPORATION AND SUBSIDIARIES SUPPLEMENTAL EARNINGS INFORMATION (Unaudited) NINE MONTHS ENDED SEPTEMBER 27, 1998 (Dollars in Millions Except Per Share Amounts) Less: Less: Non- Restructuring- As Recurring Related As Reported Items Costs Adjusted -------- -------- ---------- -------- SALES $3,285.7 $3,285.7 Cost of goods sold 2,139.2 $ (26.5) 2,112.7 Selling, general, and administrative expenses 835.5 (8.2) 827.3 Write-off of goodwill 900.0 $ (900.0) - - Restructuring and exit costs 154.2 (154.2) - - Gain on sale of businesses 63.4 (63.4) - - -------- -------- ---------- -------- OPERATING INCOME (LOSS) (679.8) 990.8 34.7 345.7 Interest and other expenses 93.5 - - 93.5 -------- -------- ---------- -------- EARNINGS (LOSS) BEFORE INCOME TAXES (773.3) 990.8 34.7 252.2 Income taxes 73.1 (3.5)(A) 11.1 80.7 -------- -------- ---------- -------- NET EARNINGS (LOSS) $ (846.4) $ 994.3 $ 23.6 $ 171.5 ======== ======== ========== ======== Shares Used in Computing Diluted Earnings Per Share (in Millions) (B) 93.4 95.1 95.1 ======== ========== ======== NET EARNINGS (LOSS) PER COMMON SHARE - ASSUMING DILUTION $ (9.06) $ 0.25 $ 1.80 ======== ========== ======== - ------------------------------------- (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 reported for the nine months. Excluding the goodwill write-off, restructuring charge, gain on sale of businesses, and restructuring-related costs, results for the nine months would have been positive. Accordingly, 1.7 million shares have been added to the diluted share count on an "as adjusted" basis. -----END PRIVACY-ENHANCED MESSAGE-----