In the face of a 59 percent decline in first-quarter earnings, the Black & Decker Corp. today said it plans to idle a number of its plants this quarter, including its facility in Easton.
The Hunt Valley-based company's earnings were $4.1 million, or 7 cents a share, on sales of $1.1 billion, compared with $10 million, or 17 cents a share, on revenues of $1.0 billion for the same period of 1990.
Revenues for last year included $93 million for businesses that were sold after the first quarter of 1990, but did not include $187 million for PRC and Dynapert, which the corporation fully consolidated into its financial statements in the second quarter of 1990.
"In response to continued pressure on sales, we are taking broad actions to control expenses throughout our operations," said Nolan D. Archibald, chairman and chief executive officer. "For example, we have initiated layoffs, hiring freezes and reductions in discretionary spending."
Archibald said overhead and other expenses are being reduced, and noted that the company is benefiting from a decline in interest rates and lower costs associated with its acquisition of the Emhart Corp. in 1989.
The plant closings are intended to bring inventories in line with sales. "Despite a short-term negative impact on operating margins, this program will have a beneficial effect on cash flow," Archibald said.
Today Black & Decker disclosed with its earnings statement that it had closed all of its power tool plants for one to two weeks in the first quarter and switched its U.S. Lock and Plumbing plants to a four-day work week for a period equivalent to a one- to two-week shutdown.
The company also revealed that it had laid off "several hundred" workers since last fall at various facilities, but said that no more layoffs are expected.
Black & Decker employs nearly 3,000 people in Maryland but has only one manufacturing plant, which is in Easton. Company spokeswoman Barbara Lucas said no workers in Maryland have been laid off.
The Easton plant, which employs about 800 workers, was closed for the week of Feb. 25 and the week of March 25, she said.
That plant, which makes household appliances and power tools, is scheduled to be closed for two weeks in June unless recent economic improvement continues, Lucas said.
Archibald noted that in recent weeks, the company has seen increased demand for its products. "There are indications that it should strengthen through the summer and remainder of the year. At our reduced expense levels, a sustained improvement would boost profitability significantly," he said.
The company continues to focus on reducing its debt. It has sold its GardenAmerica division and the North American operations of Mallory Controls, and is hoping to sell its Mallory operations in Brazil.
Black & Decker is a global marketer and manufacturer of quality products used in and around the home and for commercial applications. It is also a major supplier of information systems and services to government and commercial clients worldwide.