TOWSON, Md., Dec. 15 /PRNewswire-FirstCall/ -- The Black & Decker
Corporation (NYSE: BDK) today announced that, due to lower-than-expected
sales, net earnings per diluted share are anticipated to be $1.30-to-$1.35
for the fourth quarter of 2006 and approximately $6.50 for the full year.
The Corporation expects to report a sales decline of approximately 8% for
the quarter, primarily because of weak conditions in the United States.
Nolan D. Archibald, Chairman and Chief Executive Officer, commented,
"The demand environment has weakened compared to recent quarters. In
addition, orders from key retailers have decreased much more sharply than
sell-through. Therefore, our U.S. sales have been significantly lower than
we anticipated. We expect that the Power Tools and Accessories segment will
report a double- digit rate of sales decrease for the quarter, driven by
the U.S. business. The Hardware and Home Improvement segment and the
Fastening and Assembly Systems segment will likely report that sales
decreased at low-to-mid single digit rates. Although we have reduced our
fixed cost base over the last several years, the magnitude of the sales
shortfall in our higher-margin U.S. businesses will result in EPS well
below our previous guidance.
"Looking ahead, we expect the housing market and weaker demand for
discretionary goods will put pressure on our sales into 2007. While we do
not expect that retailers will continue reducing inventory as they have
this quarter, they will likely remain cautious. Considering this
environment, ongoing commodity cost pressure and the strong results we
posted in early 2006, we face significant challenges in the first half of
2007. We will provide detailed guidance for 2007 when we announce our
fourth-quarter results in January.
"We are disappointed that our end markets have weakened, but believe
the execution of our strategy has positioned the company effectively. The
heightened level of new product innovation that we achieved in 2006 will
continue into 2007, and should bear fruit when demand recovers. Cost
reduction efforts will remain a high priority in 2007. As a result of
careful capital spending and inventory management, we expect to report over
100% conversion of net earnings to free cash flow for 2006. The company
will continue its focus on cash generation. As always, we intend to deploy
that cash with discipline and create value for our shareholders."
The Corporation will hold a conference call today at 10:00 a.m., E.T.,
to discuss the revised guidance for the fourth quarter. Investors can
listen to the conference call by visiting http://www.bdk.com and clicking
on the icon labeled "Live Webcast." Listeners should log-in at least ten
minutes prior to the beginning of the event to ensure timely access. A
replay of the call will be available at http://www.bdk.com.
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 the "Risk
Factors" sections in Black & Decker's reports filed with the Securities and
Exchange Commission, including the Annual Report on Form 10-K for the
fiscal year ended December 31, 2005.
This release contains a forward-looking statement with respect to
management's expectation that it will convert at least 100% of net earnings
to free cash flow for 2006. Free cash flow is a non-GAAP financial measure
within the meaning of Regulation G promulgated by the Securities and
Exchange Commission. Free cash flow is defined by the Corporation as cash
flow from operating activities, less capital expenditures, plus proceeds
from the disposal of assets (excluding proceeds from business sales). The
conversion ratio excludes from free cash flow any tax payments associated
with repatriating foreign earnings under the American Jobs Creation Act of
2004.
Black & Decker is a leading global manufacturer and marketer of power
tools and accessories, hardware and home improvement products, and
technology- based fastening systems.
SOURCE The Black & Decker Corporation
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Related links:
http://www.bdk.com
Black & Decker press releases available through
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CONTACT:
Mark M. Rothleitner, Vice President of
Investor Relations and Treasurer, +1-410-716-3979, or Roger A.
Young, Vice President of Investor and Media Relations,
+1-410-716-3979, both of Black & Decker
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