Black & Decker maps busy 2 years Archibald planning flurry of new products

April 24, 1996|By Sean Somerville | Sean Somerville,SUN STAFF

Black & Decker Corp. Chairman and CEO Nolan D. Archibald yesterday promised shareholders a flurry of new products over the next two years as the company strives to repeat the success of its SnakeLight flashlight and cordless tools.

"Black & Decker will introduce more new products in the next 24-month period than in any 24-month period of time in the history of our company," Mr. Archibald told shareholders just days after the company reported a sharp jump in profits.

In an interview, Mr. Archibald also said a restructuring plan that includes the loss of 1,100 European jobs will barely hit the business in the United States.

"It's probably less than 50 jobs," he said.

Cutting costs and boosting earnings this year could bring Mr. Archibald a pay increase of $1 million under an executive-incentive plan approved yesterday by shareholders.

Yesterday's annual meeting came at the end of one of the kindest years for Black & Decker shareholders.

In February, the company boosted its dividend by 20 percent, the first increase in nearly 12 years. Last week, when the company announced a restructuring, it also reported a quarterly earnings increase 35 percent higher than the same period in the previous year. Just yesterday, the stock closed at $40 -- an all-time high.

Mr. Archibald attributed much of the success to sales of Black & Decker's SnakeLight flexible flashlight, its VersaPak cordless power tools and its DeWalt line of power tools for professionals.

"Black & Decker has the unique capability to develop and engineer new products that I believe is unparalleled in our history," he said.

A film presentation paid homage to the new products. In a clip from the "Late Show with David Letterman," the talk show host said he bought his mother a SnakeLight for Christmas.

Mr. Archibald predicted that the company's success with new products would continue. Among the promised products were an "18-volt range of power tools" to compete with 14-volt products on the market; "a range of bench and stationary tools under the DeWalt brand name" by early 1997; and 15 new VersaPak products by December, which would bring to 26 the total number of tools that use interchangeable battery packs. Mr. Archibald also promised more cordless products that he said he could not name.

Listing Black & Decker's goals, Mr. Archibald said the company should shoot to boost its operating income from 12 percent to 13 percent, decrease its debt-to-capital ratio by about 10 points to the high-40-percent range, and increase earnings by 20 percent. To reach those goals, the company should focus on new products, international growth, lower costs and greater productivity, he said.

On the restructuring plan, Mr. Archibald said Black & Decker, which employs about 3,000 people in Maryland and 29,300 worldwide, needs to cut administration and manufacturing costs Europe. The company employs between 8,800 and 10,000 people in Europe, according to one analyst.

"We're going to be shutting some facilities, and virtually all of our restructuring will be taking place in Europe," Mr. Archibald said.

"Our overheads are higher there and need to be brought in line. We went through this process in the United States over the last three or four years."

Meeting the company's goals for 1996 could be lucrative for Mr. Archibald -- and surpassing them even more lucrative -- because the new executive incentive plan. The plan boosts the maximum bonus for executives from 90 percent to 200 percent of their annual salaries.

Mr. Archibald received an $838,942 salary and a $810,000 bonus 1995, for a total of $1.65 million. With his 1996 salary of $900,000, Mr. Archibald could receive a $1.8 million bonus, for a $2.7 million total.

Barbara Lucas, a company spokeswoman, called such a scenario extremely unlikely. She said an executive would have to surpass by a good deal the company's goals. More likely is a bonus of between 35 percent and 100 percent, she said.

She said the plan was developed largely to protect the company from tax liability by tying bonuses more closely to performance. Under new rules, the company cannot deduct compensation over $1 million unless it is tied closely to performance, she said.

Pub Date: 4/24/96

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