Now that it has better control over its debt, Black & Decker Corp. plans to beef up its capital spending and marketing in the coming year, Nolan D. Archibald, chairman and chief executive officer of the Towson-based company, told shareholders yesterday.
"We think it's time to turn the power up," Mr. Archibald said at the company's annual meeting at the Sheraton Towson Hotel.
Mr. Archibald extolled the strengths of the power tool and home appliance company, stressing its strong name recognition and dedication to customer service. "Black & Decker has a powerful product portfolio, but it has not been performing up to its full potential," Mr. Archibald said.
He said the company has been hampered by the economic downturn and the $2.66 billion debt remaining from its acquisition of Emhart Corp. in 1989.
But the debt will be significantly reduced as the result of a recent stock offering and the spinning off of its PRC Advanced Systems division as a publicly traded company. The two deals will generate about $800 million to pay off debt and reduce the company's debt-to-capital ratio from 74 percent to about 58 percent, Mr. Archibald said.
"The transactions will allow us to increase our capital investment in new products and manufacturing efficiencies and begin again to run Black & Decker as we did in 1987 and 1988, when we were growing twice as fast as the markets we served and faster than any of our competitors," he told shareholders.
After the meeting, Mr. Archibald said the company plans to boost its capital spending this year by about 27 percent, to between $130 million and $140 million. The additional spending would go to upgrading factories and introducing new lines of locks and faucets.
Mr. Archibald, citing competitive considerations, declined to be specific about how much the company plans to boost advertising.
But he did say the increase will be less than the 27 percent boost planned for capital spending and will vary depending on the product.
Black & Decker also declared a regular quarterly cash dividend yesterday of 10 cents a share, payable June 26 to shareholders of record at the close of business June 12.