This summary is based on the first quarter fiscal 2007 earnings call as presented by The Black & Decker Corp. (BDK: chart) on April 25, 2007.

Management

- Senior Vice President and Chief Financial Officer: Michael D. Mangan
- Vice President of Investor Relations and Treasurer: Rob Vitener

Key Investor Issues

- Net income dropped 4% to $108.1 million though EPS was up 11% to $1.61 a share.
- Sales increased 3% to $1.6 billion from $1.5 billion in the prior year.
- The firm repurchased 1.1 million shares for $91 million.

First Quarter Highlights

Earnings dropped 4% to $108.1 million from $113.1 million in 2006, though EPS rose 11% to $1.61, from $1.45 in the prior year due to lower outstanding shares following the share repurchase.

- Despite a difficult demand environment in severe commodity inflation the firm posted a 3% sales increase to $1.6 billion from $1.52 billion in the prior year.
- This included a positive 2% net from foreign exchange and 1% incremental sales from Vector and price, contributed a positive 1% and organic volume was down 1%.
- This performance combined with strong cash generation and significant share repurchases over the past 12 months enabled double digit EPS growth.
- Operating margin was 10.7%, 30 basis points below last year as the firm incurred nearly 50 million of incremental year on year inflation but offset most of this with the price increases and productivity gains.

The firm continues to manage inventory carefully with inventory investment down 4% year on year excluding currency.

- A total of 1.1 million shares were repurchased for $91 million at an average price below $80.
- Because of the repurchases and the recently raised dividends the firm ended the quarter with cash and debt similar to the December levels.

Segment Highlights:

- Power Tools & Accessories sales increased 2% following modest organic growth while operating margin increased slightly to 12.4%, driven by productivity, expense control and better product mix.
- In the U.S., order rates and sell-through at key retailers improved sequentially from the 2006.
- The favorable order trend, combined with two months of incremental Vector sales, helped the U.S. Consumer Products Group increase sales at a high single-digit rate.

The U.S. Industrial Products Group continued to face weak demand in residential construction and reported a mid single-digit rate of sales decline.

- The European business posted sales growth in the high single-digits and continued to deliver an operating margin above 12%.
- In Latin America, the firm continued to generate robust sales growth, and operating margin rose sharply. Despite significant commodity inflation,

- Hardware and Home improvement sales decreased 2% as lockset sales decreased at a mid single-digit rate, as a large decline in the new construction channel overshadowed a solid performance at retail.
- The Price Pfister faucet business grew sales at a mid single-digit rate, driven by strong orders for new products.
- Operating margin decreased to 11.2%, as the price increases implemented did not fully offset rising commodity costs.

The home center channel remains solid with growth in both sell in and sell through.

- It also posted sales growth driven by the new rustic estate line and pricing increases.
- Despite the drop in housing statistics, wholesale channel sales declined only modestly after a strong gain in the fourth quarter.
- Sales rose in all key markets except the UK which faced a tough comparison in outdoor products.
- Strong new products in commercial initiatives were complimented by stable economic conditions to drive the outstanding growth.

- Fastening assembly sales increased 1% as continued growth in Asia and improvement in the European industrial division outweighed weakness in the automotive sector.
- Operating margin in this segment increased to 15.8%.

Fiscal 2007 Outlook

- Innovative platforms such as DeWalt''s 28 volt lithium-ion line and Kwikset Smart Solutions should help sales as the year progresses.
- The price is expected to be neutral or slightly positive for the year.
- Overall organic sales will be flat or down slightly in the second quarter and roughly flat for the year.
- Foreign exchange should add approximately 1 percentage point to sales growth for the second quarter and full year.

Largely due to nickel increases, approximately 150 million of incremental inflation for the year is now expected.