$122 million loss for B&D blamed on European ills

February 25, 1993|By Ross Hetrick | Ross Hetrick,Staff Writer

Suffering from the poor European economy, Black & Decker Corp. said yesterday that it lost $122.8 million in the fourth quarter because of the cost of revamping its European operations and its money-losing Dynapert subsidiary.

The company said the restructuring, which would include the closing of an undisclosed number of European plants, resulted in a one-time charge of $134.7 million in the fourth quarter.

Without the restructuring charge, along with other one-time, non-cash expenses, the Towson-based maker of power tools and appliances would have recorded a profit for the fourth quarter and full year.

Excluding the special charges, Black & Decker recorded income of $31.1 million, or 34 cents a share, in the fourth quarter -- 2.5 percent less than the year-ago period. For the full year, income excluding special charges was $66.4 million, a 25 percent increase from 1991's income of $53 million.

Earnings per share last year fell to 72 cents from 81 cents in 1991 because of an increase in the number of shares outstanding and the payment of preferred stock dividends.

The company said the European restructuring, much of which has not yet occurred, would save the company $20 million a year for the next two or three years. The restructuring is also expected to return its Dynapert subsidiary, which produces machines that make circuit boards, to profitability. Dynapert, which has operations in the United States and Europe, has seen its sales drop to $70 million from about $100 million in the past year.

"With expectations for continued economic weakness in Europe and sluggish recovery in the United States, we cannot rely on strengthening market conditions to improve our financial results," Nolan D. Archibald, Black & Decker's chairman and chief executive, said in a statement. Instead, the company needs to cut costs to boost its results.

The actions announced yesterday would set the stage for larger profits in the future, one analyst said.

"Management has made great strides in getting the company's financial house in order and, given the programs they have in place and the opportunities for meaningful growth in several key markets, it would not require much of an improvement in the economy to put some pretty meaningful numbers up on the board," said David S. Leibowitz, senior vice president for American Securities Corp., a New York stock brokerage.

In addition to the restructuring charge, other one-time expenses for the year included a $249 million expense for changes in accounting for retirement benefits and a $22.7 million charge stemming from the early retirement of debt. The company also declared a quarterly dividend of 10 cents a share yesterday, payable April 2 to stockholders of record March 19.

Black & Decker Corp

.. .. .. .. .. .. Ticker.. .. .. .. Yesterday's .. .. .. .. .. .. Symbol.. .. .. .. Cls.. .. ..Chg.

.. .. .. . ... BDK.. .. .. .. .. 17 3/4 .. .. .. .- 1/2

Period ended

Dec. 31 .. .. .. ..4th qtr.. .. ..* Year ago.. .. .. ..Chg.

Revenue .. .. .. $1,394,500 .. .. .$1,345,500 .. .. ..+3.64%

Net Income.. .. $(122,800).. .. .. $31,900.. .. .. .. .. N/A

Primary EPS .. ..$(1.51).. .. .. ..$0.47.. .. .. .. .. ..N/A

.. .. .. .. .. Year.. .. .. .. ** Year ago.. .. .. ... Chg.

Revenue .. .. ..$4,779,600.. .. .. $4,637,000.. .. .. .+3.1%

Net Income .. ..$(333,600).. .. .. $53,000.. .. .. .. . N/A

Primary EPS .. .. ..$(4.52).. .. .. $0.81.. .. .. .. .. N/A

Figures in thousands (except per share data.)

* Figures include $163 million in charges for restructuring costs and an extraordinary item.

** Contains $400 million in charges for extraordinary items, accounting changes and restructuring.

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