Black & Decker said yesterday it had found buyers for three more of its recently acquired businesses, but the needed cash infusion failed to reassure investors, who continued unloading the stock of the debt-laden company.
The Towson-based hardware giant, which has said it needs to sell more divisions to pay off the $3.8 billion it borrowed to buy Emhart Corp. last year, saw its stock fall 75 cents, to $8.875, yesterday.
The decline came despite a morning announcement that Black & Decker had agreed to sell its True Temper Hardware business to Huffy Corp. for about $55 million. True Temper, which had about $100 million in annual sales for Emhart, makes shovels and other gardening tools.
Black & Decker also said yesterday that it will sell the medical computer systems unit of its Planning Research Corp., its domestic capacitors operations and some properties in France and the United Kingdom for a total of about $55 million.
Planning Research is to be sold to a management-led buyout group, and the domestic capacitors operation was purchased by the investment group Yosemite Investment Inc. Both were also part of Emhart.
Wednesday, the company announced it had agreed to sell its GardenAmerica division to an Australian company for $40 million -- and watched its stock price fall $1.
Yesterday's move brings the sales of Emhart divisions to $700 million. Remaining are Emhart divisions that produce plumbing fixtures and other items, as well as the rest of Planning Research, a consulting company with annual sales of $700 million.
Stock analysts had said that Black & Decker needed to sell about $130 million worth of assets to meet its 1991 debt payments, but they said that yesterday's sales were still not sufficient to allay fears about Black & Decker's financial health.
"This is not a major asset sale relative to their total debt," said James Peirce, an industry analyst who watches the stock for investor clients of Provident National Bank in Philadelphia.
Mr. Peirce said he is now confident that Black & Decker can make its debt payments but that investors want the company to reduce its reliance on debt. Eighty percent of the company's sources of funds consist of borrowed money.
To reduce its debt ratio, the company will have to sell some of the bigger Emhart divisions it acquired, but there are few corporate buyers in today's uncertain economy, he said.
A high debt load makes a company financially inflexible, and that is worrisome now that consumers seem to be cutting back on their purchases, Mr. Peirce said.
A large share of Black & Decker's tools and housewares are sold as gifts, and retailers are "concerned about the Christmas selling season," Mr. Peirce said.
In addition, some industry experts said yesterday's sale announcement was worrisome because it seemed toundercut the reason Black & Decker purchased Emhart, which was to combine the hardware units into Black & Decker's core tool and housewares lines.
Selling Emhart's consulting businesses makes sense, for example, said John Quelch, a Harvard Business School professor, but True Temper was one division that seemed to fit into Black & Decker's business.
"There is concern about whether or not the Emhart acquisition is really digestible," Mr. Quelch said.
Black & Decker spokeswoman Barbara Lucas said yesterday that True Temper did fit into Black & Decker's strategy theoretically but that the unit was having difficulty.
As a result, she said, Black & Decker executives decided that it would be better to take whatever cash could be obtained for it immediately.
"It was a turnaround challenge," Mrs. Lucas said. "And we decided that, given its size, which is relatively small, the amount of time it would take and the amount of money it would take, it made sense" to sell True Temper, she said.
Mrs. Lucas said she didn't think the market's response to the sale announcement is appropriate but that investors are avoiding stocks of all companies with large amounts of debt.
"The general psychology of Wall Street is poor. . . . It is very risk-averse," she said.
"We are late," she conceded, explaining that Black & Decker had planned to sell about $1 billion of its assets many months ago and is still about $300 million short of its goal.
"But we are meeting every obligation," she said.