Power tool manufacturer Black & Decker Corporation on Thursday announced that net earnings for the first quarter of 2003 were U.S. $43.4 million or $0.55 per diluted share, a 34-percent increase over diluted earnings per share of $0.41 in the first quarter of 2002. Sales for the first quarter of 2003 were $968 million, up 2 percent from $952 million for the same period last year. Sales decreased 3 percent, excluding the effects of foreign currency translation.
Commenting on the results, Nolan D. Archibald, chairman and CEO, said: "Despite a very weak global economic environment during the quarter, we were able to grow sales in both our U.S. consumer power tools and accessories division and our fastening and assembly systems segment. In addition, operating margin improved significantly in each of our business segments, as our Six Sigma and restructuring programs continued to deliver positive results. This margin improvement enabled us to deliver earnings significantly higher than in the first quarter of 2002."
Mr. Archibald said the company is also pleased with the progress of its restructuring program. During the quarter, its Mexican facility continued to add professional tool lines, and the transfer of tool assembly from the U.K. to our Czech plant is proceeding as planned, he said.
He said the company continues to anticipate incremental savings of approximately $35 million in 2003 and $40 million in 2004, which, combined with $25 million in 2002, will yield $100 million of total annualized savings.
"Sales in the Power Tools and Accessories segment were essentially flat to the first quarter last year, with flat North American sales, a small decrease in Europe, and an increase in the rest of the world. Operating profit for the segment increased 47 percent from the first quarter last year, with strong improvement in both the U.S. and Europe, he said. "Six Sigma and restructuring program benefits were the primary reasons for the operating margin increase.
"In the U.S., sales of consumer products increased at a double-digit rate, with strong sales growth in lawn and garden products and power tools. This growth was driven by demand for new products, such as a new Grass Hog(R) automatic-feed trimmer/edger, and the continued success of the Bulls Eye(TM) auto-leveling laser line and stud finder. DEWALT(R) professional division sales decreased in the U.S., due to the weak economic environment, especially in the industrial sector, compounded by adverse weather conditions.
"In Europe, sales decreased modestly during the quarter, largely because of lower consumer tool sales in Germany and France. Professional tool sales were flat to last year, reflecting low construction activity. Gross margin and operating profit were up dramatically, with improvement driven by restructuring benefits and favorable currency," he said.
Looking forward, Mr. Archibald said Black & Decker assumes continued weak economic conditions and anticipates flat or slightly lower sales for the second quarter, excluding currency translation. For the full year, the company expects roughly flat sales before currency translation.
Black & Decker Reports Earnings Improvement for Q1 2003
Apr 25, 2003
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