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Black & Decker
Despite tough going amid softer housing, CEO Nolan Archibald has kept Black & Decker on steady ground with a combination of market-leading innovation and cost management. Famous for killer power tools, Black & Decker had two more hits in 2006: the Auto Wrench, which adjusts sizes with a press of a button, and a battery booster that lets users give cars a jump from the driver’s seat. The company is weathering the slowdown by shifting final assembly to lower-cost regions such as China, Mexico, and the Czech Republic. From 2001 to 2006, assembly in those regions has risen to 70% of the company’s total from 45%. That has produced annualized cost savings of more than $165 million. Those savings, plus a penny-pincher’s approach to cash management, has helped Archibald maintain record cash flow each of the last five years. The stream of money helps with the occasional acquisition, such as last year’s purchase of Vector Products, maker of—you guessed it—the battery booster.
| Overall Grade | A- |
|
| Market Data | BDK | |
| Market Value (2/28/2007) |
$5.6 Billion |
|
| Profitability* | 30.4% | B+ |
| Sales Growth Rate** | 13.7% | B |
| 12-Month Sales | $6.4 Billion |
|
| 12-Month Net Income | $0.5 Billion |
|
| Total Return | Past 12 Months0.2% | Past 36 Months70.7% |
| Economic Sector | Consumer Discretionary | |
| Industry | Household Appliances | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
$FOOTNOTE
