Black and Decker Manufacturing Co. put its McCulloch chain saw division on the block yesterday and said a writeoff connected with the sale of the money-losing division caused a $77 million loss in the fiscal year ended Sept. 26.
McCulloch, with revenues last year of around $100 million, is one of the biggest companies in the chain saw industry.
The company also cut its quarterly dividend to 13 cents from 19 cents, saying the reduction "is reflective of the lower capital base we now have as well as the uncertain outlook for business conditions in general."
"Chain saw operations over the last two years have been a significant drain on Black and Decker's managerial and financial resources because of difficult economic and industry conditions," Francis P. Lucier, chairman of the Towson-based hardware and tool firm, said in a statement.
"Although this decision initially reduces our net worth, the future effect on our finances will be positive," he said. "The drain on corporate earnings will be stopped, and the cash realized from the intended sale of the gasoline chain saw business will be used to reduce liabilities."
Company spokesman David Kirby would not place an asking price on the division, which also makes grass and weed trimmers, portable electric generators and other products. But he said the company already was talking with prospective buyers.
Kirby would not give specific sales figures on the division, but said McCulloch accounted for a bit less than 10 percent of Black and Decker's sales, which were $1.16 billion in the year ended Sept. 26.
McCulloch's chain saw sales have been declining for the past two years, part of a slump that has affected the whole chain saw industry, Kirby said.
Its two major competitors are Homelite, a division of Textron Inc., and Poulan, a product of Emerson Electric Co. The three companies divide the bulk of the chain saw market, according to Kirby. "McCulloch hasn't lost any share in this period," he said. "It's a matter of the whole industry being down."
Black and Decker said the division lost $24 million in the year ended Sept. 26. The company is also taking a $77 million writeoff in connection with the anticipated sale of the division. Excluding the chain saw division's results and the writeoff, the company had earnings on continuing operations of $41 million (97 cents a share) in the year, off from $73 million ($1.74) a year ago.
The company's fiscal 1982 sales were off 7 percent from $1.25 billion in 1981.