Contact: Barbara B. Lucas
Senior Vice President
Public Affairs
410-716-2980
Mark M. Rothleitner
Vice President
Investor Relations and Treasurer
410-716-3979
FOR IMMEDIATE RELEASE: Wednesday, October 27, 2004
Subject: Black & Decker Reports a Record $1.35 Earnings Per Share From
Continuing Operations and 15% Increase in Sales to a Record $1.28
Billion for Third Quarter 2004; Elects Mark H. Willes to Board;
Declares Regular Quarterly Cash Dividend
Towson, MD - The Black & Decker Corporation (NYSE: BDK) today announced that net
earnings from continuing operations for the third quarter of 2004 were a record
$111.3 million or $1.35 per diluted share, versus $73.2 million or $0.94 per
diluted share in the third quarter of 2003. Excluding restructuring charges in
the prior year, diluted earnings per share from continuing operations increased
18%.
Sales from continuing operations increased 15% for the quarter to a record
$1.28 billion, or 9% excluding the effects of acquisitions. Foreign currency
translation had a 3% positive impact on sales. Free cash flow was $82 million
for the quarter and $205 million year-to-date, an increase of $115 million
versus the first nine months of 2003.
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Page Two
Nolan D. Archibald, Chairman and Chief Executive Officer, commented,
"Despite a tough comparison to record performance last year, we grew earnings
per share by more than 18% for the tenth straight quarter. Our record sales
performance reflects strong growth in all three of our business segments, and
the U.S. DEWALT Professional Products division posted a double-digit sales
increase for the fourth consecutive quarter. Operating margin increased 80 basis
points, excluding restructuring charges in 2003, as restructuring benefits,
productivity, and favorable foreign exchange outweighed increases in raw
material costs.
"Sales and operating profit in the Power Tools and Accessories segment
increased 6% and 24%, respectively. In the third quarter, DEWALT sales in the
U.S. increased across all product categories, with particularly strong growth in
the equipment and cordless lines. Due primarily to the timing of orders, sales
of Black & Decker(R) consumer products decreased. Consumer sales, however,
increased at a mid-single-digit rate for the year-to-date period, and we expect
solid growth in the fourth quarter. Sales increased at a mid-single-digit rate
in Europe and at a double-digit rate in Latin America and Asia. Higher gross
margins drove a 200 basis-point improvement in operating margins for the
segment.
"Sales in the Hardware and Home Improvement segment increased 7% for the
quarter excluding the acquisition of Baldwin Hardware Corporation and Weiser
Lock Corporation. Price Pfister sales increased at a double-digit rate,
reflecting continued success at a key retailer, and Kwikset sales increased at a
low-single-digit rate. The integration of Baldwin and Weiser is proceeding as
planned, and these divisions contributed strong sales and operating profit. For
the segment, operating profit increased over 50%, due to the acquisition and
operating margin improvement.
"Sales in the Fastening and Assembly Systems segment increased 13%, or 9%
excluding the acquisition of MasterFix. Sales increased in most key divisions
and product lines, and were particularly strong in North America and Asia.
Operating profit in this segment increased 2%, as operating margin declined due
to commodity price increases.
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Page Three
"As previously announced, we completed the acquisition of the Tools Group
from Pentair, Inc. (NYSE:PNR) in early October. Our track record of improving
businesses, including the successful integration of Baldwin and Weiser, gives us
confidence that we can create significant value through this acquisition. Our
integration team is moving quickly to realize synergies with our DEWALT
professional business. We continue to expect that the acquisition will yield $65
million of cost savings and $1.00 of diluted earnings per share over the next
three years. Due to the timing of the closing, we now expect incremental EPS
accretion of approximately $0.10 in the fourth quarter, $0.40 in 2005, $0.25 in
2006, and $0.25 in 2007.
"Looking forward, we are excited about our new products, including the
DEWALT(R) cordless finishing nailer, launched in August, and the AutoTape(TM)
automatic tape measure for the consumer market. For both the fourth quarter and
full year, we are forecasting a mid-single-digit rate of sales growth excluding
currency translation and acquisitions and a double-digit growth rate including
those factors. Based on our expectations for organic sales growth and margin
improvement, combined with the Tools Group acquisition, we anticipate diluted
earnings per share from continuing operations in the ranges of $1.53-to-$1.58
for the fourth quarter and $5.33-to-$5.38 for the full year. This guidance
represents an increase from our previous forecast and full-year EPS growth in
excess of 34%. In addition, we now expect to convert approximately 100% of
full-year net earnings to free cash flow.
"With regard to 2005, we expect our fourth straight year of double-digit
earnings growth, with earnings from continuing operations of approximately $6.00
per diluted share. Key assumptions in our forecast include stable economic
conditions, accretion from the Tools Group acquisition, and rising commodity and
pension costs. We will provide more detailed guidance for 2005 in January.
"Black & Decker's formula of product innovation, end-user focus, and cost
reduction has continued to dramatically improve our earnings and cash flow. Our
outstanding cash flow enabled us to acquire Pentair's Tools Group, and thereby
capitalize on our core strengths to create value. Aided by a strong balance
sheet, we will continue evaluating acquisition opportunities to take advantage
of our market leadership and operating excellence. Through steady execution of
our strategy and stewardship of capital, we intend to continue generating
outstanding returns for our shareholders."
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Page Four
The Corporation also announced that Mark H. Willes, 63, has been elected to
the Corporation's Board of Directors. The retired chairman, president, and chief
executive officer of The Times Mirror Company previously served as a director of
the Corporation from 1990 to 2001. During his distinguished business career, Mr.
Willes also served as president, chief operations officer, and vice chairman of
General Mills and as president of the Federal Reserve Bank of Minneapolis.
Commenting on Mr. Willes's election, Mr. Archibald said, "We are delighted to
welcome Mark Willes back to the board. His extensive experience in business and
economics, as well as his in-depth knowledge of Black & Decker, will prove
extremely valuable."
The Corporation also announced that its Board of Directors declared a
quarterly cash dividend of $0.21 per share of the Corporation's outstanding
common stock payable December 31, 2004, to stockholders of record at the close
of business on December 17, 2004.
The Corporation will hold a conference call today at 10:00 a.m., E.T., to
discuss third-quarter results and the outlook for the remainder of 2004.
Investors can listen to the conference call by visiting http://www.bdk.com and
clicking on the icon labeled "Live Webcast." Listeners should log-in at least
ten minutes prior to the beginning of the event to assure timely access. A
replay of the call will be available at http://www.bdk.com.
This release includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. By their nature, all forward-looking statements involve
risks and uncertainties. For a more detailed discussion of the risks and
uncertainties that may affect Black & Decker's operating and financial results
and its ability to achieve the financial objectives discussed in this press
release, interested parties should review the "Forward-Looking Statements"
sections in Black & Decker's reports filed with the Securities and Exchange
Commission, including the Annual Report on Form 10-K for the fiscal year ended
December 31, 2003.
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Page Five
This release contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission. Included
with this release is a reconciliation of the differences between these non-GAAP
financial measures with the most directly comparable financial measures
calculated in accordance with GAAP.
Black & Decker is a leading global manufacturer and marketer of power tools
and accessories, hardware and home improvement products, and technology-based
fastening systems.
# # #
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in Millions Except Per Share Amounts)
Three Months Ended
-------------------------------
September 26, September 28,
2004 2003
-------------- --------------
SALES $ 1,282.5 $ 1,115.8
Cost of goods sold 809.2 720.2
Selling, general, and
administrative expenses 315.3 266.9
Restructuring and exit costs - 21.0
-------------- --------------
OPERATING INCOME 158.0 107.7
Interest expense (net of
interest income) 4.1 7.6
Other expense 1.4 .3
-------------- --------------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 152.5 99.8
Income taxes 41.2 26.6
-------------- --------------
NET EARNINGS FROM CONTINUING OPERATIONS 111.3 73.2
DISCONTINUED OPERATIONS (NET OF INCOME TAXES):
Earnings of discontinued operations .2 1.2
Gain on sale of discontinued operations 1.0 -
-------------- --------------
NET EARNINGS FROM DISCONTINUED OPERATIONS 1.2 1.2
-------------- --------------
NET EARNINGS $ 112.5 $ 74.4
============== ==============
BASIC EARNINGS PER COMMON SHARE
Continuing operations $ 1.38 $ .94
Discontinued operations .02 .02
-------------- --------------
NET EARNINGS PER COMMON SHARE -
BASIC $ 1.40 $ .96
============== ==============
Shares Used in Computing Basic Earnings
Per Share (in Millions) 80.1 77.7
============== ==============
DILUTED EARNINGS PER COMMON SHARE
Continuing operations $ 1.35 $ .94
Discontinued operations .02 .01
-------------- --------------
NET EARNINGS PER COMMON SHARE -
ASSUMING DILUTION $ 1.37 $ .95
============== ==============
Shares Used in Computing Diluted Earnings
Per Share (in Millions) 82.3 78.0
============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in Millions Except Per Share Amounts)
Nine Months Ended
-------------------------------
September 26, September 28,
2004 2003
-------------- --------------
SALES $ 3,673.0 $ 3,145.1
Cost of goods sold 2,309.3 2,023.5
Selling, general, and
administrative expenses 926.4 810.3
Restructuring and exit costs - 21.6
-------------- --------------
OPERATING INCOME 437.3 289.7
Interest expense (net of
interest income) 13.8 27.4
Other expense 2.4 2.6
-------------- --------------
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 421.1 259.7
Income taxes 113.7 68.7
-------------- --------------
NET EARNINGS FROM CONTINUING OPERATIONS 307.4 191.0
DISCONTINUED OPERATIONS (NET OF INCOME TAXES):
Earnings of discontinued operations .6 2.5
Gain on sale of discontinued operations
(net of impairment charge of $24.4) 12.7 -
-------------- --------------
NET EARNINGS FROM DISCONTINUED OPERATIONS 13.3 2.5
-------------- --------------
NET EARNINGS $ 320.7 $ 193.5
============== ==============
BASIC EARNINGS PER COMMON SHARE
Continuing operations $ 3.88 $ 2.45
Discontinued operations .16 .03
-------------- --------------
NET EARNINGS PER COMMON SHARE -
BASIC $ 4.04 $ 2.48
============== ==============
Shares Used in Computing Basic Earnings
Per Share (in Millions) 79.3 77.9
============== ==============
DILUTED EARNINGS PER COMMON SHARE
Continuing operations $ 3.80 $ 2.45
Discontinued operations .16 .03
-------------- --------------
NET EARNINGS PER COMMON SHARE -
ASSUMING DILUTION $ 3.96 $ 2.48
============== ==============
Shares Used in Computing Diluted Earnings
Per Share (in Millions) 80.9 78.1
============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Millions of Dollars)
September 26, December 31,
2004 2003
-------------- --------------
ASSETS
Cash and cash equivalents $ 626.4 $ 308.2
Trade receivables 982.7 808.6
Inventories 903.4 709.9
Current assets of discontinued operations 66.3 160.2
Other current assets 179.8 216.1
-------------- --------------
TOTAL CURRENT ASSETS 2,758.6 2,203.0
-------------- --------------
PROPERTY, PLANT, AND EQUIPMENT 613.9 660.2
GOODWILL 786.6 771.7
OTHER ASSETS 578.8 587.6
-------------- --------------
$ 4,737.9 $ 4,222.5
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings $ 2.8 $ .1
Current maturities of long-term debt .4 .4
Trade accounts payable 508.1 379.8
Current liabilities of discontinued operations 29.8 38.0
Other accrued liabilities 880.2 893.8
-------------- --------------
TOTAL CURRENT LIABILITIES 1,421.3 1,312.1
-------------- --------------
LONG-TERM DEBT 909.8 915.6
DEFERRED INCOME TAXES 180.8 179.8
POSTRETIREMENT BENEFITS 460.7 451.9
OTHER LONG-TERM LIABILITIES 506.7 516.6
STOCKHOLDERS' EQUITY 1,258.6 846.5
-------------- --------------
$ 4,737.9 $ 4,222.5
============== ==============
THE BLACK & DECKER CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION ABOUT BUSINESS SEGMENTS
(Millions of Dollars)
Reportable Business Segments
----------------------------------------------
Power Hardware Fastening Currency Corporate,
Tools & & Home & Assembly Translation Adjustments,
Three Months Ended September 26, 2004 Accessories Improvement Systems Total Adjustments & Eliminations Consolidated
- ------------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $ 854.4 $248.3 $142.4 $1,245.1 $ 37.4 $ - $1,282.5
Segment profit (loss) (for Consoli-
dated, operating income) 121.2 38.0 17.5 176.7 4.1 (22.8) 158.0
Depreciation and amortization 20.4 6.1 4.2 30.7 .9 2.2 33.8
Capital expenditures 14.9 8.9 3.7 27.5 .7 .1 28.3
Three Months Ended September 28, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $ 808.5 $174.3 $126.3 $1,109.1 $ 6.7 $ - $1,115.8
Segment profit (loss) (for Consoli-
dated, operating income
before restructuring and exit costs) 98.1 25.1 17.2 140.4 (.4) (11.3) 128.7
Depreciation and amortization 21.2 4.7 3.9 29.8 .2 .8 30.8
Capital expenditures 23.0 .8 3.1 26.9 .4 .2 27.5
Nine Months Ended September 26, 2004
- ------------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $2,420.3 $704.6 $432.8 $3,557.7 $115.3 $ - $3,673.0
Segment profit (loss) (for Consoli-
dated, operating income) 320.2 111.3 57.8 489.3 10.9 (62.9) 437.3
Depreciation and amortization 59.1 21.3 12.5 92.9 2.9 7.2 103.0
Capital expenditures 46.0 17.2 8.2 71.4 1.9 .7 74.0
Nine Months Ended September 28, 2003
- ------------------------------------------------------------------------------------------------------------------------------------
Sales to unaffiliated customers $2,261.1 $486.5 $391.5 $3,139.1 $ 6.0 $ - $3,145.1
Segment profit (loss) (for Consoli-
dated, operating income
before restructuring and exit costs) 244.9 55.0 55.8 355.7 .4 (44.8) 311.3
Depreciation and amortization 61.5 18.2 11.7 91.4 .3 9.0 100.7
Capital expenditures 53.9 13.2 9.7 76.8 .3 .7 77.8
The reconciliation of segment profit to the Corporation's earnings from
continuing operations before income taxes for each period, in millions of
dollars, is as follows:
Three Months Ended Nine Months Ended
- ------------------------------------------------------------------------------------------------------
September 26, September 28, September 26, September 28,
2004 2003 2004 2003
- ------------------------------------------------------------------------------------------------------
Segment profit for total reportable
business segments $176.7 $140.4 $489.3 $355.7
Items excluded from segment profit:
Adjustment of budgeted foreign
exchange rates to actual rates 4.1 (.4) 10.9 .4
Depreciation of Corporate property (.3) (.3) (1.0) (.8)
Adjustment to businesses'
postretirement benefit expenses
booked in consolidation .1 3.8 .4 11.5
Other adjustments booked in
consolidation directly related to
reportable business segments (3.1) 1.0 (8.6) (9.0)
Amounts allocated to businesses in
arriving at segment profit in excess
of (less than) Corporate center
operating expenses, eliminations,
and other amounts identified above (19.5) (15.8) (53.7) (46.5)
- ------------------------------------------------------------------------------------------------------
Operating income before restructuring
and exit costs 158.0 128.7 437.3 311.3
Restructuring and exit costs - 21.0 - 21.6
- ------------------------------------------------------------------------------------------------------
Operating income 158.0 107.7 437.3 289.7
Interest expense, net of interest income 4.1 7.6 13.8 27.4
Other expense 1.4 .3 2.4 2.6
- ------------------------------------------------------------------------------------------------------
Earnings from continuing operations
before income taxes $152.5 $ 99.8 $421.1 $259.7
======================================================================================================
BASIS OF PRESENTATION:
The Corporation operates in three reportable business segments: Power Tools
and Accessories, Hardware and Home Improvement, and Fastening and Assembly
Systems. The Power Tools and Accessories segment has worldwide responsibility
for the manufacture and sale of consumer and professional power tools and
accessories, electric cleaning and lighting products, and electric lawn and
garden tools, as well as for product service. In addition, the Power Tools and
Accessories segment has responsibility for the sale of security hardware to
customers in Mexico, Central America, the Caribbean, and South America; for the
sale of plumbing products to customers outside the United States and Canada; and
for sales of household products. The Hardware and Home Improvement segment has
worldwide responsibility for the manufacture and sale of security hardware
(except for the sale of security hardware in Mexico, Central America, the
Caribbean, and South America). On September 30, 2003, the Corporation acquired
Baldwin Hardware Corporation and Weiser Lock Corporation. These acquired
businesses are included in the Hardware and Home Improvement segment. The
Hardware and Home Improvement segment also has responsibility for the
manufacture of plumbing products and for the sale of plumbing products to
customers in the United States and Canada. The Fastening and Assembly Systems
segment has worldwide responsibility for the manufacture and sale of fastening
and assembly systems.
In January 2004, the Corporation sold two components of its European
security hardware business. The divested businesses and the remaining portion
that is held for sale are treated as discontinued operations in the
Corporation's consolidated financial statements. Sales, segment profit,
depreciation and amortization, and capital expenditures set forth in the
preceding tables exclude the results of the discontinued operations.
The Corporation assesses the performance of its reportable business
segments based upon a number of factors, including segment profit. In general,
segments follow the same accounting policies as those described in Note 1 of
Notes to Consolidated Financial Statements included in Item 8 of the
Corporation's Annual Report on Form 10-K for the year ended December 31, 2003,
except with respect to foreign currency translation and except as further
indicated below. The financial statements of a segment's operating units located
outside of the United States, except those units operating in highly
inflationary economies, are generally measured using the local currency as the
functional currency. For these units located outside of the United States,
segment assets and elements of segment profit are translated using budgeted
rates of exchange. Budgeted rates of exchange are established annually and, once
established, all prior period segment data is restated to reflect the current
year's budgeted rates of exchange. The amounts included in the preceding tables
under the captions "Reportable Business Segments" and "Corporate, Adjustments, &
Eliminations" are reflected at the Corporation's budgeted rates of exchange for
2004. The amounts included in the preceding tables under the caption "Currency
Translation Adjustments" represent the difference between consolidated amounts
determined using those budgeted rates of exchange and those determined based
upon the rates of exchange applicable under accounting principles generally
accepted in the United States.
Segment profit excludes interest income and expense, non-operating income
and expense, adjustments to eliminate intercompany profit in inventory, and
income tax expense. In addition, segment profit excludes restructuring and exit
costs. In determining segment profit, expenses relating to pension and other
postretirement benefits are based solely upon estimated service costs. Corporate
expenses, as well as certain centrally managed expenses, are allocated to each
reportable segment based upon budgeted amounts. While sales and transfers
between segments are accounted for at cost plus a reasonable profit, the effects
of intersegment sales are excluded from the computation of segment profit.
Intercompany profit in inventory is excluded from segment assets and is
recognized as a reduction of cost of goods sold by the selling segment when the
related inventory is sold to an unaffiliated customer. Because the Corporation
compensates the management of its various businesses on, among other factors,
segment profit, the Corporation may elect to record certain segment-related
expense items of an unusual or non-recurring nature in consolidation rather than
reflect such items in segment profit. In addition, certain segment-related items
of income or expense may be recorded in consolidation in one period and
transferred to the various segments in a later period.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES AND REGULATION G DISCLOSURE:
To supplement its consolidated financial statements presented in accordance
with accounting principles generally accepted in the United States (GAAP), the
Corporation provides additional measures of operating results, net earnings, and
earnings per share adjusted to exclude certain costs, expenses, and gains and
losses, as well as to exclude effects of acquired businesses on sales. The
Corporation believes that these non-GAAP financial measures are appropriate to
enhance understanding of its past performance as well as prospects for its
future performance.
This press release contains non-GAAP financial measures within the meaning
of Regulation G promulgated by the Securities and Exchange Commission. A
reconciliation of the differences between these non-GAAP financial measures with
the most directly comparable financial measures calculated in accordance with
GAAP follows.
Diluted earnings per share from continuing operations, excluding restructuring
- --------------------------------------------------------------------------------
charges:
- --------
The calculation of diluted earnings per share from continuing operations,
excluding restructuring charges for the quarters ended September 26, 2004 and
September 28, 2003, follows (dollars in millions except per share amounts):
Three Months Ended
September 26, September 28,
2004 2003
--------- ---------
Net earnings from continuing operations $ 111.3 $ 73.2
Excluding:
Restructuring and exit costs,
net of tax - 15.3
--------- ---------
Net earnings from continuing operations,
excluding restructuring and exit costs $ 111.3 $ 88.5
========= =========
Diluted earnings per common share from
continuing operations $ 1.35 $ .94
Excluding:
Restructuring and exit costs, net of tax,
per common share - assuming dilution - .20
--------- ---------
Net earnings, excluding restructuring and
exit costs, per common share - assuming
dilution $ 1.35 $ 1.14
========= =========
Shares used in computing diluted earnings
per share (in millions) 82.3 78.0
========= =========
Sales, excluding the effects of acquired businesses:
- ----------------------------------------------------
This press release indicates that sales from continuing operations increased 9%
during the three months ended September 26, 2004, as compared to the
corresponding period in the prior year, excluding the effects of acquisitions.
The determination of the aforementioned growth in sales, excluding sales of
acquired businesses, is determined by deducting $67.7 million of sales of the
acquired businesses that were recognized during the three-month period ended
September 26, 2004.
Free cash flow for the three months ended September 26, 2004 and the nine months
- --------------------------------------------------------------------------------
ended September 26, 2004 and September 28, 2003:
- ------------------------------------------------
The calculation of free cash flow, which is defined by the Corporation as
cash flow from operating activities, less capital expenditures, plus proceeds
from the disposal of assets (excluding proceeds from business sales), for the
three months ended September 26, 2004 and the nine months ended September 26,
2004 and September 28, 2003, follows (dollars in millions):
Three Months Ended
September 26,
2004
--------
Cash flow from operating activities $ 110.1
Capital expenditures (28.8)
Proceeds from disposals of assets .7
---------
Free cash flow $ 82.0
=========
Nine Months Ended
September 26, September 28,
2004 2003
--------- ---------
Cash flow from operating activities $ 264.3 $ 160.1
Capital expenditures (75.2) (79.5)
Proceeds from disposals of assets 16.1 9.7
--------- ---------
Free cash flow $ 205.2 $ 90.3
========= =========
Capital expenditures and proceeds from disposal of assets include amounts
associated with discontinued operations.
Operating Margin, excluding restructuring charges:
- --------------------------------------------------
This press release indicates that operating margin, excluding restructuring
charges, increased 80 basis points during the three months ended September 26,
2004, as compared to the corresponding period in the prior year. The calculation
of operating margin, excluding restructuring charges, which is defined by the
Corporation as operating income, excluding restructuring and exit costs, as a
percentage of sales, for the three months ended September 26, 2004 and September
28, 2003, follows (dollars in millions):
Three Months Ended
September 26, 2004 September 28, 2003
--------------------- ---------------------
Operating Operating
Margin Margin
---------- ----------
Sales $1,282.5 $1,115.8
Operating income 158.0 12.3% 107.7 9.6%
Excluding:
Restructuring and exit costs - - 21.0 1.9%
--------- ---------- --------- ----------
Operating income, excluding
restructuring and exit costs $ 158.0 12.3% $ 128.7 11.5%
========= ========== ========= ==========
Segment sales, excluding the effects of acquired businesses:
- ------------------------------------------------------------
As more fully described in this press release under the caption
"Supplemental Information About Business Segments - Basis of Presentation",
elements of segment profit, including sales, for units located outside of the
United States are generally measured using the local currency as the functional
currency. For these units, sales are translated using budgeted rates of
exchange. Budgeted rates of exchange are established annually and, once
established, all prior period segment data is restated to reflect the current
year's budgeted rates of exchange. Amounts included on the line entitled "Sales
to unaffiliated customers" under the heading "Reportable Business Segments" in
the first table under the caption "Supplemental Information About Business
Segments" are reflected at the Corporation's budgeted rates of exchange for
2004.
This press release indicates that the Hardware and Home Improvement segment
reported a 7% sales increase for the three months ended September 26, 2004, as
compared to the corresponding period in the prior year, excluding the
acquisition of Baldwin and Weiser. The determination of the aforementioned
growth in sales, excluding the acquisition of Baldwin and Weiser, is as follows
(dollars in millions):
Three Months Ended
September 26, September 28,
2004 2003
--------- ---------
Hardware and Home Improvement segment sales
as translated at budgeted rates of exchange $ 248.3 $ 174.3
Sales of acquired businesses as translated at
budgeted rates of exchange (61.4) -
--------- ---------
Hardware and Home Improvement segment sales,
excluding sales of acquired businesses, as
translated at budgeted rates of exchange $ 186.9 $ 174.3
========= =========
This press release indicates that the Fastening and Assembly Systems
segment reported a 9% sales increase for the three months ended September 26,
2004, as compared to the corresponding period in the prior year, excluding the
acquisition of MasterFix. The determination of the aforementioned growth in
sales, excluding the acquisition of MasterFix, is as follows (dollars in
millions):
Three Months Ended
September 26, September 28,
2004 2003
--------- ---------
Fastening and Assembly Systems segment sales
as translated at budgeted rates of exchange $ 142.4 $ 126.3
Sales of acquired business as translated at
budgeted rates of exchange (4.9) -
--------- ---------
Fastening and Assembly Systems segment sales,
excluding sales of acquired business, as
translated at budgeted rates of exchange $ 137.5 $ 126.3
========= =========