US Market News
2月前
Stanley Black & Decker Reports Strong 1Q 2026 ResultsApril 29, 2026 6:00 AM
PR Newswire (US)
Sales, Margin, and Cash1 On-Track to Achieve Full Year Targets 2Q'26 Aerospace Fasteners Sale Delivers ~$1.6B Net Proceeds;
Bolsters Balance Sheet and Fuels Capital DeploymentRaises 2026 GAAP EPS Guidance on Expected 2Q'26 CAM Gain;
Reaffirms 2026 Adjusted EPS GuidanceNEW BRITAIN, Conn., April 29, 2026 /PRNewswire/ -- Stanley Black & Decker (NYSE: SWK), a global leader in tools and outdoor solutions, today announced first quarter 2026 financial results.First Quarter 2026 HighlightsNet sales of $3.8 billion, up 3% versus prior year and flat on an organic basis*Gross margin of 30.1%, up 20 basis points versus prior year; adjusted gross margin* of 30.2%, down 20 basis points versus prior yearEPS of $0.39; adjusted EPS* of $0.80Chris Nelson, Stanley Black & Decker's President & CEO, commented, "Stanley Black & Decker entered 2026 with unwavering commitment to our strategic priorities, and we delivered stronger than planned first quarter results through disciplined execution. Our team's focus and resilience ensured that sales, gross margin, and cash1 performance remain firmly on track with our full year plan. I am proud of our team for maintaining their customer-centric approach and for advancing our vision to build a world-class branded industrial company."We are confident in our strategy and our ability to achieve our long-term financial goals, even amid global economic uncertainty. By protecting and advancing targeted, strategic investments, we are positioning Stanley Black & Decker for sustainable, profitable growth and continued value creation for our shareholders."* Non-GAAP financial measure as further defined on page 51 Refer to "2026 Guidance" on page 3 for further discussion and details of underlying planning assumptions1Q 2026 Results (all comparisons versus prior year)Net sales of $3.8 billion, up 3%, as higher price (+3%) and currency (+3%) were partially offset by lower volume (-3%). The volume decline was primarily due to retail softness in North America.Gross margin of 30.1%, up 20 basis points, and adjusted gross margin* of 30.2%, down 20 basis points. Delivered approximately flat gross margins – in-line with expectations – as operational cost improvements and higher pricing were largely offset by increased tariff expense, volume deleverage, and other inflation. SG&A expenses of 23.0% of sales, down 20 basis points, and adjusted SG&A expenses* of 22.8%, up 20 basis points. Delivered approximately flat performance as strategic growth investments were balanced by disciplined and targeted cost management.The tax rate was 29.7% and the adjusted tax rate* was 26.3%.Net earnings were 1.5% of sales, a decrease of 90 basis points. EBITDA margin* was 7.1%, a decrease of 180 basis points, and adjusted EBITDA margin* was 9.2%, a decrease of 50 basis points.1Q 2026 Segment Results ($ in M)SalesSegment
ProfitCharges1Adj. Segment
Profit*Segment
MarginAdj. Segment
Margin*Tools &
Outdoor$3,336$276.0$12.6$288.68.3 %8.7 %Engineered
Fastening$511$60.9$0.2$61.111.9 %12.0 %1 See Non-GAAP adjustments on page 13.* Non-GAAP financial measure as further defined on page 5Tools & Outdoor net sales were up 2% year over year, as higher pricing (+4%) and currency (+3%) were partially offset by volume declines (-5%). Organic revenue* decreased by 1%, primarily due to lower retail volumes in North America. This decline was mostly offset by increased sell-in ahead of the outdoor product Spring season, strong performance in prioritized international markets, and higher rates of professional conversions within the U.S. commercial & industrial channel. North America sales were down 1% on a total basis and down 2% organically*, Europe increased by 11% on a total basis and was positive 1% organically*, while the Rest of World was up 6% on a total basis and flat organically*. The Tools & Outdoor segment margin was 8.3%, down 50 basis points year over year. Adjusted segment margin* was 8.7%, down 90 basis points. These margin declines were predominantly due to growth investments, and greater sales volume of lower-margin outdoor products. Higher pricing was largely offset by increased tariff expenses.Engineered Fastening net sales were up 10% year over year, as strong volume (+6%), pricing (+1%) and currency (+3%) all contributed to growth. Organic revenues* were up 7%, driven by robust aerospace growth and automotive outperforming the market. These gains were partially offset by a decline in industrial volume. The Engineered Fastening segment margin was 11.9%, up 350 basis points year over year, and adjusted segment margin* was 12.0%, up 190 basis points year over year. These substantial margin expansions were driven by improved profitability in aerospace, and higher volume and mix in automotive. Completion of CAM Sale Enables Meaningful Debt Reduction and Capital Allocation OpportunitiesOn April 6 (2Q'26), the Company successfully completed the previously announced sale of Consolidated Aerospace Manufacturing ('CAM') to Howmet Aerospace for $1.8 billion in cash. Net proceeds from the transaction were approximately $1.6 billion (net of projected taxes and fees). The vast majority of the proceeds have already been used to reduce debt in 2Q 2026. The results of CAM remained in continuing operations until the deal closed. Patrick Hallinan, EVP, Chief Financial Officer & Chief Administrative Officer, commented, "We made solid progress in the first quarter to deliver sales, margin and cash1 in line with our full year plan. We achieved this progress, despite ongoing macroeconomic challenges, driven by the commitment of our teams around the world. At the same time, the CAM transaction has sharpened our focus on our core business; it now allows us to pursue capital allocation that accelerates shareholder value creation, which we expect to take the form of share repurchases."Looking forward, we remain firmly committed to executing our strategic plans to deliver on our near-term and long-term margin and cash flow objectives, while enhancing our earnings power to position the Company for long-term growth and value creation."2026 GuidanceThe Company now expects 2026 GAAP EPS to be in the range of $4.15 to $5.35, which is higher than prior guidance factoring in the expected gain on the sale of CAM now that the transaction has closed. The Company continues to expect adjusted EPS* in the range of $4.90 to $5.70. These ranges represent year over year growth of 79% and 13%, respectively, at the midpoint of each range as compared to 2025 performance. The updated guidance excludes CAM results as of April 6, 2026. Free cash flow* is expected to be in the range of $500 to $700 million, now including projected taxes and fees associated with the recently closed CAM divestiture. Excluding such payments, free cash flow* is expected to be in the range of $700 to $900 million, consistent with prior guidance. The Company will discuss underlying assumptions on the earnings call.The difference between the GAAP and Adjusted EPS* assumption range is approximately $0.35 to $0.75, consisting primarily of charges related to footprint actions and other cost actions, largely offset by the estimated gain on the sale of the CAM business. 1 Refer to "2026 Guidance" on page 3 for further discussion and details of underlying planning assumptions*Non-GAAP financial measure as further defined on page 51Q 2026 Non-GAAP Adjustments Total pre-tax non-GAAP adjustments in the first quarter were $81.0 million, primarily related to restructuring costs, a non-cash asset impairment charge, and costs associated with footprint actions. Gross profit and SG&A included $5.2 million and $7.7 million of charges, respectively, while Other-net included a net benefit of $2.6 million. The Company also recorded restructuring charges of $44.9 million and an asset impairment charge of $22.7 million. In addition, the Company recognized a $3.1 million loss on the sale of a small business in the Tools & Outdoor segment.Earnings WebcastStanley Black & Decker will host a webcast with investors today, April 29, 2026, at 8:00 am ET. A slide presentation, which will accompany the call, will be available on the "Investors" section of the Company's website at www.stanleyblackanddecker.com/investors and will remain available after the call.The call will be available through a live, listen-only webcast or teleconference. Links to access the webcast, register for the teleconference, and view the accompanying slide presentation will be available on the "Investors" section of the Company's website, www.stanleyblackanddecker.com/investors under the subheading "News & Events." A replay will be available at the same location, approximately two hours after the call.About Stanley Black & Decker Founded in 1843 and headquartered in the USA, Stanley Black & Decker (NYSE: SWK) is a worldwide leader in Tools and Outdoor, operating manufacturing facilities globally. The Company's approximately 43,500 employees produce innovative end-user inspired power tools, hand tools, storage, digital jobsite solutions, outdoor and lifestyle products, and engineered fasteners to support the world's builders, tradespeople and DIYers. The Company's world class portfolio of trusted brands includes DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet®. To learn more visit: www.stanleyblackanddecker.com or follow Stanley Black & Decker on Facebook, Instagram, LinkedIn and X.Investor Contacts:
Michael Wherley
Vice President, Investor Relations
michael.wherley @StraightlifeChristina Francis
Senior Director, Investor Relations
christina.francis @dnapheadMedia Contacts:
Debora Raymond
Vice President, Public Relations
debora.raymond @FranksEscapedNon-GAAP Financial Measures Organic revenue or organic sales is defined as the difference between total current and prior year sales less the impact of companies acquired and divested in the past twelve months, foreign currency fluctuations, transfers of product lines between segments, and outdoor product line exits (as previously communicated). Organic revenue growth, organic sales growth or organic growth is organic revenue or organic sales divided by prior year sales. Gross profit is defined as sales less cost of sales. Gross margin is gross profit as a percent of sales. Segment profit is defined as sales less cost of sales and selling, general and administrative ("SG&A") expenses (aside from corporate overhead expense). Segment margin is segment profit as a percent of sales. EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA margin is EBITDA as a percent of sales. Gross profit, gross margin, SG&A, segment profit, segment margin, earnings, EBITDA and EBITDA margin are adjusted for certain gains and charges, such as costs related to supply chain transformation and footprint actions, asset impairments, voluntary retirement program costs, divestiture-related items, restructuring, gains or losses on sales of businesses, and other adjusting items. Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory income tax rates.Management uses these metrics as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Adjusted earnings per share or adjusted EPS, is diluted GAAP EPS excluding certain gains and charges. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Free cash flow conversion is defined as free cash flow divided by net income. Net debt to adjusted EBITDA is total debt less cash on hand divided by adjusted EBITDA. The Non-GAAP financial measures are reconciled to GAAP on pages 12 through 15 and in the appendix to the earnings conference call slides available at http://www.stanleyblackanddecker.com/investors. The Company considers the use of the Non-GAAP financial measures above relevant to aid analysis and understanding of the Company's results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods.The Company provides expectations for the non-GAAP financial measures of full year 2026 adjusted EPS, presented on a basis excluding certain gains and charges, as well as 2026 free cash flow. Forecasted full-year 2026 adjusted EPS is reconciled to forecasted full-year 2026 GAAP EPS under "2026 Guidance". Consistent with past methodology, the forecasted full-year 2026 GAAP EPS excludes the impacts of potential acquisitions and divestitures (unless otherwise noted), future regulatory changes or strategic shifts that could impact the Company's contingent liabilities or intangible assets, respectively, potential future cost actions in response to external factors that have not yet occurred, and any other items not specifically referenced under "2026 Guidance". A reconciliation of forecasted free cash flow to its most directly comparable GAAP estimate is not available without unreasonable effort due to high variability and difficulty in predicting items that impact cash flow from operations, which could be material to the Company's results in accordance with U.S. GAAP. The Company believes such a reconciliation would also imply a degree of precision that is inappropriate for this forward-looking measure.The Company may also provide multi-year strategic goals for the non-GAAP financial measures of adjusted gross margin and net debt to adjusted EBITDA, presented on a basis excluding certain gains and charges. A reconciliation for these non-GAAP measures is not available without unreasonable effort due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred, including the high variability and low visibility with respect to certain gains or charges that would generally be excluded from non-GAAP financial measures and which could be material to the Company's results in accordance with U.S. GAAP. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company's accounting policies for future periods requires a level of precision that is unavailable for these future multi-year periods and cannot be accomplished without unreasonable effort. The Company believes such a reconciliation would also imply a degree of precision that is inappropriate for these forward-looking measures.CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTSThis document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any goals, projections, guidance or planning assumptions or scenarios; any statements of the plans, strategies and objectives of management for future operations, including expectations around productivity and efficiency goals and future operational strategies; any statements regarding future economic conditions or performance; any statements concerning future dividends or share repurchases; any statements and assumptions or scenarios regarding possible tariff and tariff impact projections, including those relating to Section 232 tariffs, tariff refunds and related mitigation plans (including price actions, supply chain adjustments and expected timing and benefits related to such plans); the impact of the CAM sale transaction to fund debt reduction and achieve target leverage ratios within the time period estimated; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words "may," "will," "estimate," "intend," "could," "project," "plan," "continue," "believe," "expect," "anticipate", "run-rate", "annualized", "forecast", "commit", "goal", "target", "design", "on track", "position or positioning", "guidance," "aim," "looking forward," "multi-year" or any other similar words. Although the Company believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of its forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in the Company's filings with the Securities and Exchange Commission.Important factors that could cause the Company's actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in its forward-looking statements include, among others, the following: (i) successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services as well as successful execution of, and realization of expected benefits from, the Company's brand prioritization and investment strategy; (ii) macroeconomic factors, including global and regional business conditions, commodity availability and prices, inflation and deflation, interest rate volatility, currency exchange rates, and uncertainties in the global financial markets; (iii) laws, regulations and governmental policies affecting the Company's activities in the countries where it does business or sources supply inputs, including those related to, taxation, data privacy, anti-bribery, anti-corruption, government contracts, and trade controls, including but not limited to, tariffs, import and export controls, raw material and rare earth related controls and other monetary and non-monetary trade regulations or barriers; (iv) the Company's ability to predict the timing and extent of any trade related regulations (or any court rulings in response thereto), clearances, restrictions or policies, including but not limited to, trade barriers, tariffs, raw material and rare earth related controls, as well as its ability to successfully assess the impact to its business of, and mitigate or respond to, such macroeconomic or trade, tariff and raw material and rare earth import/export control changes, regulations or policies (including, but not limited to, the Company's ability to predict and respond to court rulings in response thereto, to obtain any tariff refunds in amounts or within timeframes that would meaningfully offset the impact of tariffs on the Company's business, or to obtain price increases from its customers and complete effective supply chain adjustments within anticipated time frames and ability to obtain rare earth related supply clearances); (v) realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures and the costs associated with such transactions; (vi) pricing pressure and other changes within competitive markets; (vii) availability and price of raw materials, rare earth materials, component parts, freight, energy, labor and sourced finished goods; (vii) potential business, supply chain and distribution disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, natural disasters or pandemics, sanctions, political unrest, war or terrorism, including the conflicts between Russia and Ukraine, and Israel and Hamas, and tensions or conflicts in South Korea, China, Taiwan and the Middle East (including the ongoing conflict in Iran); (viii) potential adverse developments in new or pending litigation and/or government investigations; (ix) potential regulatory liabilities, including environmental, privacy, data breach, workers compensation and product liabilities; (x) failure to realize the expected benefits of the Company's value creation, debt reduction and capital allocation strategy; (xi) and the other factors set forth in the Annual Report on Form 10-K and in the Quarterly Reports on Form 10-Q, including under the headings "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the Consolidated Financial Statements and the related Notes, and other filings with the Securities and Exchange Commission.Forward-looking statements, and the factors that could cause actual results to differ materially from those forward-looking statements, in this press release speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference herein speak only as of the date of those documents. The Company does not undertake any obligation or intention to update or revise any forward-looking statements, except as required by law.STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, Millions of Dollars Except Per Share Amounts)
FIRST QUARTER
2026
2025
NET SALES
$ 3,846.4
$ 3,744.6
COSTS AND EXPENSES
Cost of sales
2,689.1
2,623.8
Gross profit
1,157.3
1,120.8
% of Net Sales
30.1 %
29.9 %
Selling, general and administrative
884.0
867.0
% of Net Sales
23.0 %
23.2 %
Other - net
41.9
47.5
Loss on sale of business
3.1
0.3
Asset impairment charges
22.7
-
Restructuring charges
44.9
1.2
Income from operations
160.7
204.8
Interest - net
75.9
77.2
EARNINGS BEFORE INCOME TAXES
84.8
127.6
Income taxes
25.2
37.2
NET EARNINGS
$ 59.6
$ 90.4
EARNINGS PER SHARE OF COMMON STOCK
Basic
$ 0.39
$ 0.60
Diluted
$ 0.39
$ 0.60
DIVIDENDS PER SHARE OF COMMON STOCK
$ 0.83
$ 0.82
WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands)
Basic
151,759
151,028
Diluted
152,389
151,699
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars)
April 4,
January 3,
2026
2026
ASSETS
Cash and cash equivalents
$ 333.7
$ 280.1
Accounts and notes receivable, net
1,438.4
919.7
Inventories, net
4,059.0
4,157.1
Current assets held for sale
271.5
262.4
Other current assets
404.2
359.7
Total current assets
6,506.8
5,979.0
Property, plant and equipment, net
1,763.1
1,831.8
Goodwill and other intangibles, net
10,325.3
10,374.8
Long-term assets held for sale
1,279.5
1,273.9
Other assets
1,725.1
1,784.2
Total assets
$ 21,599.8
$ 21,243.7
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 1,743.0
$ 605.6
Current maturities of long-term debt
54.2
554.8
Accounts payable
2,220.1
2,163.0
Accrued expenses
1,642.5
1,878.1
Current liabilities held for sale
56.8
44.2
Total current liabilities
5,716.6
5,245.7
Long-term debt
4,704.0
4,703.3
Long-term liabilities held for sale
9.7
9.4
Other long-term liabilities
2,192.8
2,230.7
Shareowners' equity
8,976.7
9,054.6
Total liabilities and shareowners' equity$ 21,599.8
$ 21,243.7 STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESSUMMARY OF CASH FLOW ACTIVITY (Unaudited, Millions of Dollars)
FIRST QUARTER
2026
2025
OPERATING ACTIVITIES
Net earnings
$ 59.6
$ 90.4
Depreciation
84.4
91.1
Amortization
28.6
37.3
Loss on sale of business
3.1
0.3
Asset impairment charges
22.7
-
Changes in working capital1
(388.8)
(469.0)
Other
(198.4)
(170.1)
Net cash used in operating activities
(388.8)
(420.0)
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(58.5)
(65.0)
Payments on long-term debt
(500.1)
(500.0)
Net short-term commercial paper borrowings
1,145.4
1,136.2
Cash dividends on common stock
(126.0)
(124.5)
Other
(8.1)
(2.4)
Net cash provided by investing and financing activities
452.7
444.3
Effect of exchange rate changes on cash
(6.9)
31.5
Increase in cash, cash equivalents and restricted cash
57.0
55.8
Cash, cash equivalents and restricted cash, beginning of period
287.4
292.8
Cash, cash equivalents and restricted cash, end of period
$ 344.4
$ 348.6
Free Cash Flow Computation2
Net cash used in operating activities
$ (388.8)
$ (420.0)
Less: capital and software expenditures
(58.5)
(65.0)
Free cash flow (before dividends)
$ (447.3)
$ (485.0)
Reconciliation of Cash, Cash Equivalents and Restricted Cash
April 4,
2026
January 3,
2026
Cash and cash equivalents
$ 333.7
$ 280.1
Restricted cash included in Other current assets
9.2
7.3
Cash and cash equivalents included in Current assets held for sale
1.5
-
Cash, cash equivalents and restricted cash
$ 344.4
$ 287.4
1Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free
cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the
shareowners, and is useful information for investors. Free cash flow does not include deductions for mandatory debt
service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions,
among other items.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESBUSINESS SEGMENT INFORMATION(Unaudited, Millions of Dollars)
FIRST QUARTER
2026
2025
NET SALES
Tools & Outdoor
$ 3,335.6
$ 3,280.9
Engineered Fastening1
510.8
463.7
Total
$ 3,846.4
$ 3,744.6
SEGMENT PROFIT2
Tools & Outdoor
$ 276.0
$ 289.2
Engineered Fastening1
$ 60.9
$ 39.0
CORPORATE OVERHEAD2
$ (63.6)
$ (74.4)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
8.3 %
8.8 %
Engineered Fastening1
11.9 %
8.4 %
1On April 6, 2026, the Company completed the previously announced sale of its Consolidated Aerospace
Manufacturing ("CAM") business. Based on management's commitment to sell this business, the assets
and liabilities related to CAM were classified as held for sale on the Company's Condensed Consolidated
Balance Sheets as of April 4, 2026 and January 3, 2026. For the three months ended April 4, 2026, net
sales and segment profit for Engineered Fastening included $117.0 million and $22.0 million, respectively,
related to the CAM business.
2Segment profit is defined as net sales minus cost of sales and SG&A (aside from corporate overhead
expenses). The corporate overhead element of SG&A, which is not allocated to the business segments
for purposes of determining segment profit, consists of the costs associated with the executive
management team and expenses related to centralized functions that benefit the entire Company but are
not directly attributable to the business segments, such as legal and corporate finance functions, as well
as expenses for the world headquarters facility.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars Except Per Share Amounts)
FIRST QUARTER 2026
GAAP
Non-GAAP
Adjustments
Non-GAAP1
Gross profit
$ 1,157.3
$ 5.2
$ 1,162.5
% of Net Sales
30.1 %
30.2 %
Selling, general and administrative
884.0
(7.7)
876.3
% of Net Sales
23.0 %
22.8 %
Earnings before income taxes
84.8
81.0
165.8
Income taxes2
25.2
18.4
43.6
Net earnings
59.6
62.6
122.2
Diluted earnings per share of common stock
$ 0.39
$ 0.41
$ 0.80
FIRST QUARTER 2025
GAAP
Non-GAAP
Adjustments
Non-GAAP1
Gross profit
$ 1,120.8
$ 16.7
$ 1,137.5
% of Net Sales
29.9 %
30.4 %
Selling, general and administrative
867.0
(22.0)
845.0
% of Net Sales
23.2 %
22.6 %
Earnings before income taxes
127.6
31.5
159.1
Income taxes2
37.2
7.5
44.7
Net earnings
90.4
24.0
114.4
Diluted earnings per share of common stock
$ 0.60
$ 0.15
$ 0.75
1The Non-GAAP 2026 and 2025 information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of
the Company's results and business trends aside from the material impact of certain gains and charges and ensures appropriate
comparability to operating results of prior periods. See further detail on Non-GAAP adjustments on page 14.
2Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and
exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory
income tax rates.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars)
FIRST QUARTER 2026
GAAP
Non-GAAP
Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 276.0
$ 12.6
$ 288.6
Engineered Fastening
$ 60.9
$ 0.2
$ 61.1
CORPORATE OVERHEAD
$ (63.6)
$ 0.1
$ (63.5)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
8.3 %
8.7 %
Engineered Fastening
11.9 %
12.0 %
FIRST QUARTER 2025
GAAP
Non-GAAP
Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 289.2
$ 25.0
$ 314.2
Engineered Fastening
$ 39.0
$ 7.7
$ 46.7
CORPORATE OVERHEAD
$ (74.4)
$ 6.0
$ (68.4)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
8.8 %
9.6 %
Engineered Fastening
8.4 %
10.1 %
1Non-GAAP adjustments for the Tools & Outdoor segment relate primarily to footprint actions associated with the
supply chain transformation, as further discussed on page 14.
2The Non-GAAP 2026 and 2025 business segment and corporate overhead information, as reconciled to GAAP above, is
considered relevant to aid analysis and understanding of the Company's results and business trends aside from the
material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS TO EBITDA(Unaudited, Millions of Dollars)
FIRST QUARTER
2026
2025
Net earnings
$ 59.6
$ 90.4
% of Net Sales
1.5 %
2.4 %
Interest - net
75.9
77.2
Income taxes
25.2
37.2
Depreciation
84.4
91.1
Amortization
28.6
37.3
EBITDA1
$ 273.7
$ 333.2
% of Net Sales
7.1 %
8.9 %
Non-GAAP adjustments before income taxes
81.0
31.5
Less: Accelerated depreciation included in Non-GAAP adjustments before income taxes
-
2.9
Adjusted EBITDA1
$ 354.7
$ 361.8
% of Net Sales
9.2 %
9.7 %
SUMMARY OF NON-GAAP ADJUSTMENTS BEFORE INCOME TAXES(Unaudited, Millions of Dollars)
FIRST QUARTER
2026
2025
Supply Chain Transformation Costs:
Footprint Rationalization2
$ 5.2
$ 6.6
Material Productivity & Operational Excellence
-
4.7
Other charges
-
5.4
Gross profit
$ 5.2
$ 16.7
Supply Chain Transformation Costs:
Footprint Rationalization2
$ 6.6
$ 6.1
Complexity Reduction & Operational Excellence3
-
10.0
Transition services costs related to previously divested businesses
-
5.3
Other charges
1.1
0.6
Selling, general and administrative
$ 7.7
$ 22.0
Income related to providing transition services to previously divested businesses
$ -
$ (6.8)
Deal-related costs and other
(2.6)
(1.9)
Other, net
$ (2.6)
$ (8.7)
Loss on sale of business
$ 3.1
$ 0.3
Asset impairment charges4
22.7
-
Restructuring charges
44.9
1.2
Non-GAAP adjustments before income taxes
$ 81.0
$ 31.5
1EBITDA is earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA excluding certain
gains and charges, as summarized above. EBITDA and Adjusted EBITDA, both Non-GAAP measures, are considered relevant to aid
analysis and understanding of the Company's operating results and ensures appropriate comparability to prior periods.
2Footprint Rationalization costs in 2026 and 2025 primarily relate to site transformation and re-configuration costs. Facility exit
costs related to site closures are reported in Restructuring charges.
3Complexity Reduction & Operational Excellence costs in 2025 primarily related to third-party consulting fees to provide expertise
in identifying business model changes and quantifying related cost savings opportunities within the Company's Engineered
Fastening business, developing a detailed program and related governance, and assisting the Company with the implementation of
actions necessary to achieve the identified objectives.
4Asset impairment charges in 2026 relate to the write-down of assets associated with the exit of a Tools and Outdoor product line
and related plant closure.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC GROWTH(Unaudited)
FIRST QUARTER 2026
GAAP
Revenue
Growth
Less:
Acquisitions
Plus:
Divestitures
Less:
Product Line
Transfer
Less:
Outdoor
Product Line
Exits
Less:
Currency
Non-GAAP
Organic
Growth1
Stanley Black & Decker
3 %
- %
- %
- %
- %
3 %
- %
Tools & Outdoor
2 %
- %
- %
- %
- %
3 %
-1 %
North America
-1 %
- %
- %
- %
- %
1 %
-2 %
Europe
11 %
- %
- %
- %
- %
10 %
1 %
Rest of World
6 %
- %
- %
- %
- %
6 %
- %
Engineered Fastening
10 %
- %
- %
- %
- %
3 %
7 %
1Non-GAAP Organic Growth, as reconciled to GAAP Revenue Growth above, is utilized to describe the change in the Company's net sales excluding the impacts of
foreign currency fluctuations, acquisitions during their initial 12 months of ownership, divestitures, transfers of product lines between segments, and outdoor product
line exits (as previously communicated). Organic growth is also referred to as organic sales growth and organic revenue growth.
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Original: Stanley Black & Decker Reports Strong 1Q 2026 Results
US Market News
3月前
Stanley Black & Decker Does Not Expect Recent Section 232 Tariff Changes To Impact 2026 Guidance MateriallyApril 20, 2026 7:00 AM
PR Newswire (US)
NEW BRITAIN, Conn., April 20, 2026 /PRNewswire/ -- Stanley Black & Decker (NYSE: SWK), a global leader in tools and outdoor solutions, today announced that it does not expect the recent changes to the Section 232 tariff regime to have a material impact on the Company's full-year guidance.The Company is scheduled to provide more information on its first quarter earnings call on Wednesday, April 29, 2026 at 8:00 am ET.About Stanley Black & Decker
Founded in 1843 and headquartered in the USA, Stanley Black & Decker (NYSE: SWK) is a worldwide leader in Tools and Outdoor, operating manufacturing facilities globally. The Company's approximately 43,500 employees produce innovative end-user inspired power tools, hand tools, storage, digital jobsite solutions, outdoor and lifestyle products, and engineered fasteners to support the world's builders, tradespeople and DIYers. The Company's world class portfolio of trusted brands includes DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet®. To learn more visit: www.stanleyblackanddecker.com or follow Stanley Black & Decker on Facebook, Instagram, LinkedIn and X.Investor Contacts:
Michael WherleyVice President, Investor Relations michael.wherley@sbdinc.com Christina FrancisSenior Director, Investor Relationschristina.francis@sbdinc.com
Media Contacts:Debora RaymondVice President, Public Relationsdebora.raymond@sbdinc.com
CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTSThis document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any goals, projections, guidance or planning assumptions or scenarios regarding earnings, EPS, adjusted EPS, income, revenue, sales, net sales, sales growth or other financial items; any statements and assumptions or scenarios regarding possible tariff and tariff impact projections, including those relating to Section 232 tariffs, and related mitigation plans (including price actions, supply chain adjustments and expected timing and benefits related to such plans); any statements and assumptions or scenarios regarding cost inflation; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words "may," "will," "estimate," "intend," "could," "project," "plan," "continue," "believe," "expect," "anticipate", "run-rate", "annualized", "forecast", "commit", "goal", "target", "design", "on track", "position or positioning", "guidance," "aim," "looking forward," "multi-year" or any other similar words.Although the Company believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of its forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in the Company's filings with the Securities and Exchange Commission.Important factors that could cause the Company's actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in its forward-looking statements include, among others, the following: (i) successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services as well as successful execution of, and realization of expected benefits from, the Company's brand prioritization and investment strategy, including potential licensing initiatives and related restructuring efforts, and its ability to estimate and mitigate negative consequences from the same including, but not limited to, reduced ability to generate sales; (ii) macroeconomic factors, including global and regional business conditions, commodity availability and prices, inflation and deflation, interest rate volatility, currency exchange rates, and uncertainties in the global financial markets; (iii) laws, regulations and governmental policies affecting the Company's activities in the countries where it does business or sources supply inputs, including those related to, taxation, data privacy, anti-bribery, anti-corruption, government contracts, and trade controls, including but not limited to, tariffs, import and export controls, raw material and rare earth related controls and other monetary and non-monetary trade regulations or barriers; (iv) the Company's ability to predict the timing and extent of any trade related regulations, clearances, restrictions or policies, including but not limited to, trade barriers, tariffs, raw material and rare earth related controls, as well as its ability to successfully assess the impact to its business of, and mitigate or respond to, such macroeconomic or trade, tariff and raw material and rare earth import/export control changes, regulations or policies (including, but not limited to, the Company's ability to obtain price increases from its customers and complete effective supply chain adjustments within anticipated time frames and ability to obtain rare earth related supply clearances); (v) the economic, political, cultural and legal environment in the U.S., Europe, and the emerging markets in which the Company generates sales, particularly Latin America and China; (vi) realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures; (vii) pricing pressure and other changes within competitive markets; (viii) availability and price of raw materials, rare earth materials, component parts, freight, energy, labor and sourced finished goods; (ix) the impact that the tightened credit markets may have on the Company or its customers or suppliers; (x) the extent to which the Company has to write off accounts receivable, inventory or other assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; (xi) the Company's ability to identify and effectively execute productivity improvements and cost reductions; including complexity reduction through platforming products and SKU reduction initiatives, and other manufacturing and administrative reorganization actions; (xii) potential business, supply chain and distribution disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, natural disasters or pandemics, sanctions, political unrest, war or terrorism, including the conflicts between Russia and Ukraine, and tensions or conflicts in South Korea, China, Taiwan and the Middle East (including the ongoing conflict in Iran); (xiii) the continued consolidation of customers, particularly in consumer channels, and the Company's continued reliance on significant customers; (xiv) managing franchisee relationships; (xv) the impact of poor weather conditions and climate change and risks related to the transition to a lower-carbon economy, such as the Company's ability to successfully adopt new technology, meet market-driven demands for carbon neutral and renewable energy technology, or to comply with changes in environmental regulations or requirements, which may be more stringent and complex, impacting its reporting processes and manufacturing facilities and business operations as well as remediation plans and costs relating to any of its current or former locations or other sites; (xvi) maintaining or improving production rates in the Company's manufacturing facilities (including leveraging its North American footprint in connection with tariff mitigation), responding to significant changes in customer preferences or expectations, product demand and fulfilling demand for new and existing products, and learning, adapting and integrating new technologies into products, services and processes; (xvii) changes in the competitive landscape in the Company's markets; (xviii) the Company's non-U.S. operations, including sales to non-U.S. customers; (xix) the Company's ability to predict the extent or timing of, and impact from, demand changes within domestic or world-wide markets associated with construction, homebuilding and remodeling, aerospace, outdoor, engineered fastening, automotive and other markets which the Company serves; (xx) potential adverse developments in new or pending litigation and/or government investigations; (xxi) the incurrence of debt and changes in the Company's ability to obtain debt on commercially reasonable terms and at competitive rates; (xxii) substantial pension and other postretirement benefit obligations; (xxiii) potential regulatory liabilities, including environmental, privacy, data breach, workers compensation and product liabilities; (xxiv) attracting, developing and retaining senior management and other key employees, managing a workforce in many jurisdictions, labor shortages, work stoppages or other labor disruptions; (xxv) the Company's ability to keep abreast with the pace of technological change; (xxvi) changes in accounting estimates; (xxvii) the Company's ability to protect its intellectual property rights and to maintain its public reputation and the strength of its brands; and (xxviii) critical or negative publicity, including on social media, whether or not accurate, concerning the Company's brands, products, culture, key employees or suppliers, or initiatives, and the Company's handling of divergent stakeholder expectations regarding the same.Additional factors that could cause actual results to differ materially from forward-looking statements are set forth in the Annual Report on Form 10-K and in the Quarterly Reports on Form 10-Q, including under the headings "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the Consolidated Financial Statements and the related Notes, and other filings with the Securities and Exchange Commission.Forward-looking statements, and the factors that could cause actual results to differ materially from those forward-looking statements, in this press release speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference herein speak only as of the date of those documents. The Company does not undertake any obligation or intention to update or revise any forward-looking statements, or the factors that could cause actual results to differ materially from those forward-looking statements, whether as a result of future events or circumstances, new information or otherwise, except as required by law.
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Original: Stanley Black & Decker Does Not Expect Recent Section 232 Tariff Changes To Impact 2026 Guidance Materially
US Market News
5月前
Howmet Aerospace Reports Fourth Quarter and Full Year 2025 ResultsFebruary 12, 2026 7:00 AM
PR Newswire (US)
FY 2025: Record Revenue, Up 11% Year Over Year; Record Profit and Cash from Operations
FY 2025: GAAP EPS Up 32% Year Over Year; Adjusted EPS* Up 40% Year Over Year
FY 2025: $700 Million Deployed for Common Stock Repurchases; $265 Million Debt Reduction
FY 2026: Revenue Growth Guidance at Approximately 10%, Expect Improved Profit and Cash GenerationFourth Quarter 2025 GAAP Financial ResultsRevenue of $2.2 billion, up 15% year over year (YoY), driven by Commercial Aerospace, up 13%Operating Income Margin of 22.6%, down 90 basis points YoYNet Income of $372 million versus $314 million in the fourth quarter 2024; Earnings per Share (EPS) of $0.92, up 19% YoYGenerated $654 million of Cash from Operations; $449 million of Cash used for Financing Activities; and $122 million of Cash used for Investing ActivitiesShare repurchases of $200 million; paid $0.12 per share common stock dividendFourth Quarter 2025 Adjusted Financial ResultsAdjusted EBITDA excluding special items of $653 million, up 29% YoYAdjusted EBITDA margin excluding special items of 30.1%, up 330 basis points YoYAdjusted Operating Income Margin excluding special items of 26.8%, up 380 basis points YoYAdjusted EPS excluding special items of $1.05, up 42% YoYGenerated $530 million of Free Cash FlowFull Year 2025 GAAP Financial ResultsRevenue of $8.3 billion, up 11% YoY, driven by Commercial Aerospace, up 12%Operating Income Margin of 24.8%, up 280 basis points YoYNet Income of $1.5 billion versus $1.2 billion in 2024; EPS of $3.71 versus $2.81 in 2024Generated $1.9 billion of Cash from Operations; $1.3 billion of Cash used for Financing Activities; and $0.4 billion of Cash used for Investing ActivitiesShare repurchases of $700 million; paid $0.44 per share common stock dividendFull Year 2025 Adjusted Financial ResultsAdjusted EBITDA excluding special items of $2.4 billion, up 26% YoYAdjusted EBITDA margin excluding special items of 29.3%, up 350 basis points YoYAdjusted Operating Income Margin excluding special items of 25.8%, up 380 basis points YoYAdjusted EPS excluding special items of $3.77, up 40% YoYGenerated $1.4 billion of Free Cash Flow2026 Guidance
Q1 2026 Guidance
FY 2026 Guidance
LowBaselineHigh
LowBaselineHighRevenue$2.225B $2.235B $2.245B
$9.000B $9.100B $9.200B Adj. EBITDA*1$680M$685M $690M
$2.710B $2.760B $2.810B Adj. EBITDA Margin*130.6 %30.6 %30.7 %
30.1 %30.3 %30.5 %Adj. Earnings per Share*1$1.09$1.10$1.11
$4.35$4.45$4.55Free Cash Flow1
$1.550B$1.600B$1.650B____________________* Excluding special items
1 Reconciliations of the forward-looking non-GAAP measures to the most directly comparable GAAP measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures – for further detail, see "2026 Guidance" below.Key Announcements Entered into definitive agreement to acquire Consolidated Aerospace Manufacturing, LLC (CAM) from Stanley Black & Decker, Inc. (NYSE: SWK) for an all-cash purchase price of approximately $1.8 billion on December 22, 2025Acquired Brunner Manufacturing Co. Inc., a small, privately held producer of high-quality fastener products in an all-cash transaction on February 6, 2026Repurchased $200 million of common stock in fourth quarter 2025 at an average price of $194.61 per shareRepurchased additional $150 million of common stock in 2026 year to date at an average price of $215.28 per sharePaid a quarterly dividend of $0.12 per share on common stock in fourth quarter 2025, up 50% YoY. Declared a dividend of $0.12 per share on common stock in the first quarter 2026Issued $500 million of 4.55% Notes due 2032; Redeemed all outstanding principal amount of $625 million of 5.90% Notes due 2027; Reduces annualized interest expense by approximately $14 million. Debt actions taken during 2025 reduced debt by approximately $265 million and annualized interest expense by approximately $22 millionRedeemed all outstanding Preferred Stock in fourth quarter 2025 for approximately $55 millionReduced gross pension obligation by approximately $125 million by annuitizing the remainder of the Company's UK pension planFY 2026: Revenue growth guidance at approximately 10%, Expect improved profit and cash generationCombined the revenue disclosure for the Industrial Gas Turbine and Oil & Gas markets into Gas TurbinesPITTSBURGH, Feb. 12, 2026 /PRNewswire/ -- Howmet Aerospace (NYSE: HWM) today reported fourth quarter and full year 2025 results. The Company reported record fourth quarter 2025 revenue of $2.2 billion, up 15% year over year, driven by growth in the commercial aerospace market of 13%, growth in the defense aerospace market of 20%, and growth in the gas turbines market of 32%.
Howmet Aerospace reported Net Income of $372 million, or $0.92 per share, in the fourth quarter 2025 versus $314 million, or $0.77 per share, in the fourth quarter 2024. Fourth quarter 2025 Net Income included approximately $54 million in net charges from special items, primarily due to a non-cash settlement charge to annuitize the remainder of the Company's UK pension plan. Net Income excluding special items was $426 million in the fourth quarter 2025, up 41% versus $303 million in the fourth quarter 2024. Adjusted EPS* in the fourth quarter 2025 were $1.05, up 42% versus $0.74 in the fourth quarter 2024.Fourth quarter 2025 Operating Income was $489 million, up 10% year over year. Fourth quarter Adjusted Operating Income excluding special items was $580, up 34% year over year. Operating Income Margin was 22.6%, down approximately 90 basis points year over year. Fourth quarter 2025 Adjusted Operating Income Margin excluding special items was 26.8%, up approximately 380 basis points year over year.Fourth quarter 2025 Adjusted EBITDA excluding special items was $653 million, up 29% year over year. The year-over-year increase was driven by strong growth in the commercial aerospace, defense aerospace, and gas turbines markets. Adjusted EBITDA margin excluding special items was up approximately 330 basis points year over year at 30.1%.The Company reported record full year 2025 revenue of $8.3 billion, up 11% year over year, driven by growth in the commercial aerospace market of 12%, growth in the defense aerospace market of 21%, and growth in the gas turbines market of 25%, partially offset by declines in the commercial transportation market of 5%.The Company reported Net Income of $1.5 billion, or $3.71 per share, in the full year 2025 versus $1.2 billion, or $2.81 per share, in the full year 2024, and included approximately $25 million in net charges from special items, primarily due to a non-cash settlement charge to annuitize the remainder of the Company's UK pension plan. Net Income excluding special items was $1.5 billion, or $3.77 per share, in the full year 2025, versus $1.1 billion, or $2.69 per share, in the full year 2024.Full year 2025 Operating Income was $2.0 billion, up 25% year over year. Full year 2025 Adjusted Operating Income excluding special items was $2.1 billion, up 30% year over year. Operating Income Margin was up approximately 280 basis points year over year at 24.8% in the full year 2025. Full year 2025 Adjusted Operating Income Margin excluding special items was 25.8%, up approximately 380 basis points year over year.Full year 2025 Adjusted EBITDA excluding special items was $2.4 billion, up 26% year over year. The year-over-year increase was driven by growth in the commercial aerospace, defense aerospace, and gas turbines markets, partially offset by declines in the commercial transportation market. Adjusted EBITDA Margin excluding special items was up approximately 350 basis points year over year at 29.3%.Howmet Aerospace Executive Chairman and Chief Executive Officer John Plant said, "The Howmet team delivered an exceptional quarter to cap a strong 2025. Revenue growth accelerated in the fourth quarter 2025 to 15% year over year, reflecting healthy growth in the commercial aerospace, defense aerospace, and gas turbines markets. Adjusted EBITDA* grew 29% year over year to $653 million and Adjusted EBITDA Margin* increased approximately 330 basis points to 30.1%, both records. Adjusted Earnings per Share* grew 42% to a record $1.05. Free Cash Flow for full year 2025 was $1.43 billion and 93% conversion of Net Income* after record capital expenditures of $453 million as Howmet continued to invest for growth."Mr. Plant continued, "Healthy cash generation supported significant capital deployment in the fourth quarter with $200 million in share repurchases, $55 million for preferred share redemption, and $125 million for debt reduction. In full year 2025, Howmet repurchased a record $700 million of common stock and paid approximately $181 million in dividends. Also in the quarter, Howmet entered into a definitive agreement to acquire CAM for approximately $1.8 billion, expected to close in the first half 2026. The CAM and Brunner acquisitions will further strengthen Howmet's fastener portfolio. An additional $150 million of Howmet stock has been repurchased so far in 2026 reflecting continued confidence in Howmet's cash performance.""Turning to 2026, the vast majority of the markets we serve are in a growth phase, while the commercial transportation market shows signs of stabilizing. Commercial aerospace continues to benefit from rising passenger demand and recent multi-year under-build of aircraft that together have led to a record OEM backlog stretching into the next decade. In addition to robust growth in new builds, engine spares needs continue to increase. Defense markets are also very healthy, while engine spares continue to grow to support the expanding aircraft fleet. The gas turbines business is entering its largest growth phase in years, with extremely high demand for electricity generation, especially from natural gas for data centers. In commercial transportation, we anticipate that the first quarter 2026 will be the quarterly low point and then we will begin to see healthy demand in the second half of 2026. Howmet is well positioned for growth in 2026 and beyond." ____________________* Excluding special itemsFourth Quarter and Full Year 2025 Segment PerformanceEngine ProductsQ4 2024FY 2024Q3 2025Q4 2025FY 2025(in U.S. dollar amounts)
Third-party sales$ 972$ 3,735$1,105$ 1,163$ 4,320Inter-segment sales$ 1$7$ 1$ 2$7Provision for depreciation and amortization$ 39$ 139$ 38$ 39$ 146Segment Adjusted EBITDA$ 302$ 1,150$ 368$ 396$ 1,438Segment Adjusted EBITDA Margin31.1 %30.8 %33.3 %34.0 %33.3 %Restructuring and other charges$ 1$1$ —$ 88$ 88Capital expenditures$ 76$ 219$ 74$ 84$ 319Engine Products reported fourth quarter 2025 revenue of $1.2 billion, an increase of 20% year over year, due to growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares growth. Segment Adjusted EBITDA was $396 million, up 31% year over year, driven by growth in the commercial aerospace, defense aerospace, and gas turbines markets. The segment absorbed approximately 320 net headcount in the quarter in support of expected revenue increases. Segment Adjusted EBITDA Margin increased approximately 290 basis points year over year to 34.0%. Engine Products reported full year 2025 revenue of $4.3 billion, an increase of 16% year over year, due to growth in the commercial aerospace, defense aerospace, and gas turbines markets, including engine spares growth. Segment Adjusted EBITDA was $1.4 billion, up 25% year over year, driven by growth in the commercial aerospace, defense aerospace, and gas turbines markets. The segment absorbed approximately 1,445 net headcount in the year in support of expected revenue increases. Segment Adjusted EBITDA Margin increased approximately 250 basis points year over year to 33.3%.Fastening SystemsQ4 2024FY 2024Q3 2025Q4 2025FY 2025(in U.S. dollar amounts)
Third-party sales$ 401$1,576$448$ 454$1,745Inter-segment sales$ 1$1$ —$ 1$1Provision for depreciation and amortization$ 11$47$ 12$ 12$48Segment Adjusted EBITDA$ 111$406$ 138$ 139$530Segment Adjusted EBITDA Margin27.7 %25.8 %30.8 %30.6 %30.4 %Restructuring and other charges (credits)$ 2$5$ —$ (1)$ —Capital expenditures$ 9$26$ 13$ 20$52Fastening Systems reported fourth quarter 2025 revenue of $454 million, an increase of 13% year over year, due to growth in the commercial aerospace market, partially offset by lower volumes in the commercial transportation market. Segment Adjusted EBITDA was $139 million, up 25% year over year, driven by growth in the commercial aerospace market as well as productivity gains, partially offset by lower volumes in the commercial transportation market. Segment Adjusted EBITDA Margin increased approximately 290 basis points year over year to 30.6%.Fastening Systems reported full year 2025 revenue of $1.7 billion, an increase of 11% year over year, due to growth in the commercial aerospace market, partially offset by lower volumes in the commercial transportation market. Segment Adjusted EBITDA was $530 million, up 31% year over year, driven by growth in the commercial aerospace market as well as productivity gains, partially offset by lower volumes in the commercial transportation market. Segment Adjusted EBITDA Margin increased approximately 460 basis points year over year to 30.4%.Engineered StructuresQ4 2024FY 2024Q3 2025Q4 2025FY 2025(in U.S. dollar amounts)
Third-party sales$ 275$1,065$289$ 287$1,148Inter-segment sales$ 3$10$ 2$ 1$9Provision for depreciation and amortization$ 10$42$ 9$ 10$41Segment Adjusted EBITDA$ 51$166$ 58$ 63$243Segment Adjusted EBITDA Margin18.5 %15.6 %20.1 %22.0 %21.2 %Restructuring and other (credits) charges$ (3)$12$ —$ —$(4)Capital expenditures$ 4$20$ 9$ 13$33Engineered Structures reported fourth quarter 2025 revenue of $287 million, an increase of 4% year over year due to growth in the defense aerospace market. Segment Adjusted EBITDA was $63 million, up 24% year over year, driven by growth in the defense aerospace market. Segment Adjusted EBITDA Margin increased approximately 350 basis points year over year to 22.0%.Engineered Structures reported full year 2025 revenue of $1.1 billion, an increase of 8% year over year due to growth in the defense aerospace market. Segment Adjusted EBITDA was $243 million, up 46% year over year, driven by growth in the defense aerospace market and productivity gains. Segment Adjusted EBITDA Margin increased approximately 560 basis points year over year to 21.2%.Forged WheelsQ4 2024FY 2024Q3 2025Q4 2025FY 2025(in U.S. dollar amounts)
Third-party sales$ 243$1,054$247$ 264$1,039Provision for depreciation and amortization$ 12$42$ 11$ 11$42Segment Adjusted EBITDA$ 66$287$ 73$ 79$296Segment Adjusted EBITDA Margin27.2 %27.2 %29.6 %29.9 %28.5 %Restructuring and other charges (credits)$ —$1$ —$ —$(1)Capital expenditures$ 10$45$ 9$ 4$36Forged Wheels reported fourth quarter 2025 revenue of $264 million, an increase of 9% year over year, with 10% lower volumes in the commercial transportation market more than offset by an increase in aluminum cost pass through. Segment Adjusted EBITDA was $79 million, up 20% year over year, driven by cost reductions in response to lower volumes in the commercial transportation market. Segment Adjusted EBITDA Margin increased approximately 270 basis points year over year to 29.9%.Forged Wheels reported full year 2025 revenue of $1.0 billion, down slightly year over year, with 13% lower volumes in the commercial transportation market offset by an increase in aluminum cost pass through. Segment Adjusted EBITDA was $296 million, up 3% year over year, driven by cost reductions in response to lower volumes in the commercial transportation market. Segment Adjusted EBITDA Margin increased approximately 130 basis points year over year to 28.5%.Howmet Aerospace to Acquire Consolidated Aerospace Manufacturing, LLC (CAM) for approximately $1.8 billion
On December 22, 2025, Howmet Aerospace announced that it entered into a definitive agreement to acquire CAM from Stanley Black & Decker, Inc. for an all-cash purchase price of approximately $1.8 billion. CAM is a leading global designer and manufacturer of precision fasteners, fluid fittings, and other complex, highly engineered products for demanding aerospace and defense applications. The transaction is expected to close in the first half of 2026, subject to customary closing conditions and regulatory approvals.Acquired Fastener Producer Brunner Manufacturing Co. Inc.
On February 6, 2026, the Company acquired Brunner Manufacturing Co. Inc., a small, privately-held producer of high-quality fastener products based in Mauston, WI in an all-cash transaction. The transaction will enhance Howmet's product offerings and market opportunities with larger-size fasteners.Repurchased $200 Million of Common Stock in Fourth Quarter 2025, $700 Million in Full Year 2025; $150 Million YTD in 2026
In the fourth quarter 2025, Howmet Aerospace repurchased $200 million of common stock at an average price of $194.61 per share, retiring approximately 1.0 million shares.In the full year 2025, the Company repurchased $700 million of common stock at an average price of $160.52 per share, retiring approximately 4.4 million shares.Year to date in 2026, the Company repurchased an additional $150 million of common stock at an average price of $215.28 per share, retiring approximately 0.7 million shares.As of February 12, 2026, total share repurchase authorization available was approximately $1.347 billion.Paid Quarterly Common Stock Dividend of $0.12 Per Share in Fourth Quarter 2025
On November 25, 2025, the Company paid a quarterly dividend of $0.12 per share on its common stock to holders of record at the close of business November 7, 2025. The quarterly dividend represents a 50% increase from the fourth quarter 2024 dividend of $0.08 per share.The Board of Directors declared a dividend of $0.12 per share on the Company's common stock, to be paid on February 25, 2026, to the holders of record at the close of business on February 6, 2026. This quarterly dividend represents a 20% increase from the first quarter 2025 dividend of $0.10 per share.Issued $500 Million of 4.55% Notes due 2032; Redeemed All Outstanding Principal Amount of $625 Million of 5.90% Notes due 2027
On November 12, 2025, the Company issued $500 million aggregate principal amount of 4.55% Notes due 2032 (the "2032 Notes"). On December 3, 2025, the Company redeemed all of the remaining outstanding principal amount of $625 million of its 5.90% notes due 2027 (the "2027 Notes"). The Company used the net proceeds from the 2032 Notes offering and approximately $125 million in cash on hand to fund the redemption of the 2027 Notes. These actions result in annualized interest expense savings of approximately $14 million. Debt Actions During 2025 Reduce Annualized Interest Expense by Approximately $22 Million
The Company took several debt actions in the full year 2025, resulting in debt reduction of approximately $265 million and approximately $22 million in annualized interest expense savings.PeriodActions TakenAnnualized Interest SavingsSecond Quarter 2025On June 11, 2025 the Company paid down the aggregate
principal amount of $75 million plus accrued interest of
less than $1 million of its US Dollar-Denominated Term
LoanApproximately $4 MillionThird Quarter 2025On September 18, 2025 the Company paid down the
remaining $63 million of its US Dollar-Denominated Term
Loan.Approximately $4 MillionFourth Quarter 2025On November 12, 2025 the Company issued $500 million
aggregate principal amount of 4.55% Notes due 2032 (the
"2032 Notes"); On December 3, 2025 the Company used
the net proceeds from the 2032 Notes and approximately
$125 million of cash on hand to redeem all remaining
outstanding principal amount of $625 million of its 5.90%
Notes due 2027Approximately $14 MillionTotal Annualized Interest SavingsApproximately $22 MillionRedeemed All Outstanding Preferred Stock in Fourth Quarter 2025 for Approximately $55 Million
On December 17, 2025, the Company redeemed all of the outstanding shares of $3.75 Cumulative Preferred Stock of the Company for approximately $55 million.Annuitized Remainder of the Company's UK Pension Plan
On December 1, 2025 the Company reduced its gross pension obligation by approximately $125 million by annuitizing the remainder of the Company's UK pension plan. These actions resulted in a non-cash settlement charge of approximately $89 million.Combined Industrial Gas Turbine and Oil & Gas Revenue Disclosure into Gas Turbines
In the fourth quarter 2025, the Company combined the revenue disclosure for the Industrial Gas Turbine and Oil & Gas markets into Gas Turbines. The Gas Turbines market constitutes turbine parts for use in heavy-duty gas turbine units as well as small- to mid-sized gas turbine units. Turbines across these size ranges serve growing demand for electricity generation, driven by accelerating data center build-out. As a result of this change, the Company will no longer separately report the Industrial & Other market. The revenue previously classified as General Industrial is now classified as Other in our market disclosures.2026 Guidance
Q1 2026 Guidance
FY 2026 Guidance
LowBaselineHigh
LowBaselineHighRevenue$2.225B $2.235B $2.245B
$9.000B $9.100B $9.200B Adj. EBITDA*1$680M$685M $690M
$2.710B $2.760B $2.810B Adj. EBITDA Margin*130.6 %30.6 %30.7 %
30.1 %30.3 %30.5 %Adj. Earnings per Share*1$1.09$1.10$1.11
$4.35$4.45$4.55Free Cash Flow1
$1.550B$1.600B$1.650B* Excluding Special Items
1 Reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures, as well as the directly comparable GAAP measures, are not available without unreasonable efforts due to the variability and complexity of the charges and other components excluded from the non-GAAP measures, such as gains or losses on sales of assets, taxes, and any future restructuring or impairment charges. In addition, there is inherent variability already included in the GAAP measures, including, but not limited to, price/mix and volume. Howmet Aerospace believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.Howmet Aerospace will hold its quarterly conference call at 10:00 AM Eastern Time on Thursday, February 12, 2026. The call will be webcast via www.howmet.com. The press release and presentation materials will be available at approximately 7:00 AM ET on February 12, via the "Investors" section of the Howmet Aerospace website. About Howmet Aerospace
Howmet Aerospace Inc., headquartered in Pittsburgh, Pennsylvania, is a leading global provider of advanced engineered solutions for the aerospace and transportation industries. The Company's primary businesses focus on jet engine components, aerospace fastening systems, and airframe structural components necessary for mission-critical performance and efficiency in aerospace and defense applications, as well as forged aluminum wheels for commercial transportation. With approximately 1,200 granted and pending patents, the Company's differentiated technologies enable lighter, more fuel-efficient aircraft and commercial trucks to operate with a lower carbon footprint. For more information, visit www.howmet.com.Dissemination of Company Information
Howmet Aerospace intends to make future announcements regarding Company developments and financial performance through its website at www.howmet.com. Forward-Looking Statements
This release contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "anticipates", "believes", "could", "envisions", "estimates", "expects", "forecasts", "goal", "guidance", "intends", "may", "outlook", "plans", "poised", "projects", "seeks", "sees", "should", "targets", "will", "would", or other words of similar meaning. All statements that reflect Howmet Aerospace's expectations, assumptions or projections about the future, other than statements of historical fact, are forward-looking statements, including, without limitation, statements, forecasts and outlook relating to the condition of markets; future financial results or operating performance; future strategic actions; Howmet Aerospace's strategies, outlook, and business and financial prospects; and any future dividends, debt issuances, debt reduction and repurchases of its common stock; and statements regarding the planned acquisition of Consolidated Aerospace Manufacturing, LLC (CAM) and the expected benefits and timing of such planned acquisition. These statements reflect beliefs and assumptions that are based on Howmet Aerospace's perception of historical trends, current conditions and expected future developments, as well as other factors Howmet Aerospace believes are appropriate in the circumstances. Forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and changes in circumstances that are difficult to predict, which could cause actual results to differ materially from those indicated by these statements. Such risks and uncertainties include, but are not limited to: (a) deterioration in global economic and financial market conditions generally, or unfavorable changes in the markets served by Howmet Aerospace, including due to escalating tariff and other trade policies and the resulting impacts on Howmet Aerospace's supply and distribution chains, as well as on market volatility and global trade generally; (b) the impact of potential cyber attacks and information technology or data security breaches; (c) the loss of significant customers or adverse changes in customers' business or financial conditions; (d) manufacturing difficulties or other issues that impact product performance, quality or safety; (e) inability of suppliers to meet obligations due to supply chain disruptions or otherwise; (f) failure to attract and retain a qualified workforce and key personnel, labor disputes or other employee relations issues; (g) the inability to achieve improvement in or strengthening of financial performance, operations or competitiveness anticipated or targeted; (h) inability to meet increased demand, production targets or commitments; (i) competition from new product offerings, disruptive technologies or other developments; (j) geopolitical, economic, and regulatory risks relating to Howmet Aerospace's global operations, including geopolitical and diplomatic tensions, instabilities, conflicts and wars, as well as compliance with U.S. and foreign trade and tax laws, sanctions, embargoes and other regulations; (k) the outcome of contingencies, including legal proceedings, government or regulatory investigations, and environmental remediation; (l) failure to comply with government contracting regulations; (m) adverse changes in discount rates or investment returns on pension assets; (n) the ability to consummate and realize expected benefits of acquisitions, including the CAM acquisition, on the anticipated time frame or at all; and (o) the other risk factors summarized in Howmet Aerospace's Form 10-K for the year ended December 31, 2024 and other reports filed with the U.S. Securities and Exchange Commission. Market projections are subject to the risks discussed above and other risks in the market. Under its share repurchase program, the Company may repurchase shares from time to time, in amounts, at prices, and at such times as the Company deems appropriate, subject to market conditions, legal requirements and other considerations. The Company is not obligated to repurchase any specific number of shares or to do so at any particular time. The declaration of any future dividends is subject to the discretion and approval of the Board of Directors after the Board's consideration of all factors it deems relevant and subject to applicable law. The Company may modify, suspend, or cancel its share repurchase program or its dividend policy in any manner and at any time that it may deem necessary or appropriate. Credit ratings are not a recommendation to buy or hold any Howmet Aerospace securities, and they may be revised or revoked at any time at the sole discretion of the credit rating organizations. The statements in this release are made as of the date of this release, even if subsequently made available by Howmet Aerospace on its website or otherwise. Howmet Aerospace disclaims any intention or obligation to update publicly any forward-looking statements, whether in response to new information, future events, or otherwise, except as required by applicable law.Non-GAAP Financial Measures
Some of the information included in this release is derived from Howmet Aerospace's consolidated financial information but is not presented in Howmet Aerospace's financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). Certain of these data are considered "non-GAAP financial measures" under SEC rules. These non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures and management's rationale for the use of the non-GAAP financial measures can be found in the schedules to this release.Other Information
In this press release, the acronym "FY" means "full year"; "Q" means "quarter"; "YoY" means year over year; "Adj." means adjusted; Howmet, Howmet Aerospace, or the Company means Howmet Aerospace Inc.; and references to performance by Howmet Aerospace or its segments as "record" mean its best result since April 1, 2020 when Howmet Aerospace Inc. (previously named Arconic Inc.) separated from Arconic Corporation.Howmet Aerospace Inc. and subsidiariesStatement of Consolidated Operations (unaudited)(in U.S. dollar millions, except per-share and share amounts)
Quarter ended
December 31, 2025
September 30, 2025
December 31, 2024Sales$ 2,168
$ 2,089
$ 1,891
Cost of goods sold (exclusive of expenses below)1,412
1,365
1,289Selling, general administrative, and other expenses96
100
77Research and development expenses10
10
7Provision for depreciation and amortization73
72
73Restructuring and other charges88
—
—Operating income489
542
445
Loss on debt redemption15
—
—Interest expense, net37
37
40Other expense, net7
10
13
Income before income taxes430
495
392Provision for income taxes58
110
78Net income$ 372
$ 385
$ 314
Amounts Attributable to Howmet Aerospace
Common Shareholders:
Earnings per share - basic(1):
Net income per share$ 0.92
$ 0.96
$ 0.77Average number of shares(2)(3)402
403
406
Earnings per share - diluted(1):
Net income per share$ 0.92
$ 0.95
$ 0.77Average number of shares(2)(3)404
405
408
Common stock outstanding at the end of the period402
403
405
(1)In order to calculate both basic and diluted earnings per share, preferred stock dividends declared of less than $1 for the quarters presented need to be subtracted from Net income.(2)For the quarters presented, the difference between the diluted average number of shares and the basic average number of shares relates to share equivalents associated with outstanding restricted stock unit awards and employee stock options.(3)As average shares outstanding are used in the calculation of both basic and diluted earnings per share, the full impact of share repurchases is not fully realized in earnings per share ("EPS") in the period of repurchase since share repurchases may occur at varying points during a period. Howmet Aerospace Inc. and subsidiariesStatement of Consolidated Operations (unaudited)(in U.S. dollar millions, except per-share and share amounts)For the year ended December 31,2025
2024Sales$ 8,252
$ 7,430Cost of goods sold (exclusive of expenses below)5,432
5,119Selling, general administrative, and other expenses370
347Research and development expenses37
33Provision for depreciation and amortization283
277Restructuring and other charges84
21Operating income2,046
1,633Loss on debt redemption15
6Interest expense, net151
182Other expense, net40
62Income before income taxes1,840
1,383Provision for income taxes332
228Net income$ 1,508
$ 1,155
Amounts Attributable to Howmet Aerospace Common Shareholders:
Earnings per share - basic(1)(2):
Net income per share$ 3.73
$ 2.83Average number of shares(3)404
408Earnings per share - diluted(1)(2):
Net income per share$ 3.71
$ 2.81Average number of shares(3)406
410
(1)In order to calculate both basic and diluted EPS, preferred stock dividends declared of $2 for the years presented need to be subtracted from Net income.(2)For the years presented, the difference between the diluted average number of shares and the basic average number of shares related to share equivalents associated with outstanding restricted stock unit awards and employee stock options.(3)As average shares outstanding are used in the calculation of both basic and diluted earnings per share, the full impact of share repurchases is not realized in EPS in the year of repurchase for the years presented. Howmet Aerospace Inc. and subsidiariesConsolidated Balance Sheet (unaudited)(in U.S. dollar millions)
December 31, 2025
December 31, 2024Assets
Current assets:
Cash and cash equivalents$ 742
$ 564Receivables from customers, less allowances of $— in both 2025 and 2024779
689Other receivables17
20Inventories1,849
1,840Prepaid expenses and other current assets392
249Total current assets3,779
3,362Properties, plants, and equipment, net2,593
2,386Goodwill4,022
4,010Deferred income taxes40
35Intangibles, net457
475Other noncurrent assets288
251Total assets$ 11,179
$ 10,519
Liabilities
Current liabilities:
Accounts payable, trade$ 845
$ 948Accrued compensation and retirement costs343
305Taxes, including income taxes77
60Accrued interest payable47
59Deferred revenue147
60Other current liabilities121
111Long-term debt due within one year191
6Total current liabilities1,771
1,549Long-term debt, less amount due within one year2,859
3,309Accrued pension benefits546
625Accrued other postretirement benefits38
54Other noncurrent liabilities and deferred credits612
428Total liabilities5,826
5,965
Equity
Howmet Aerospace shareholders' equity:
Preferred stock—
55Common stock402
405Additional capital2,531
3,206Retained earnings4,093
2,766Accumulated other comprehensive loss(1,673)
(1,878)Total equity5,353
4,554Total liabilities and equity$ 11,179
$ 10,519 Howmet Aerospace Inc. and subsidiariesStatement of Consolidated Cash Flows (unaudited)(in U.S. dollar millions)
Year ended December 31,
2025
2024Operating activities
Net income$ 1,508
$ 1,155Adjustments to reconcile net income to cash provided from operations:
Depreciation and amortization283
277Deferred income taxes17
55Restructuring and other charges84
21Net realized and unrealized losses22
25Net periodic pension cost 42
40Stock-based compensation73
63Loss on debt redemption15
6Other8
1Changes in assets and liabilities, excluding effects of acquisitions, divestitures, and
foreign currency translation adjustments:
Increase in receivables(109)
(57)Increase in inventories(50)
(106)Increase in prepaid expenses and other current assets(10)
(14)Decrease in accounts payable, trade(73)
(49)Increase in accrued expenses 96
5Decrease in taxes, including income taxes(6)
(14)Pension contributions (70)
(79)Increase in noncurrent assets(14)
(3)Increase (decrease) in noncurrent liabilities68
(28)Cash provided from operations1,884
1,298Financing Activities
Additions to debt500
500Repurchases and payments on debt(765)
(865)Debt issuance costs(5)
(5)Premiums paid on early redemption of debt(15)
(5)Repurchases of common stock(700)
(500)Proceeds from exercise of employee stock options1
8Dividends paid to shareholders(181)
(109)Taxes paid for net share settlement of equity awards(46)
(49)Redemption of preferred stock(55)
—Other(3)
(1)Cash used for financing activities(1,269)
(1,026)Investing Activities
Capital expenditures(453)
(321)Acquisitions, net of cash acquired —
(5)Proceeds from the sale of assets and businesses 9
9Additions to investments(9)
—Sale of investments15
—Other—
1Cash used for investing activities(438)
(316)Effect of exchange rate changes on cash, cash equivalents and restricted cash1
(1)Net change in cash, cash equivalents and restricted cash 178
(45)Cash, cash equivalents and restricted cash at beginning of period565
610Cash, cash equivalents and restricted cash at end of period$ 743
$ 565 Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited), continued(in U.S. dollars millions)Reconciliation of Free cash flowQuarter ended
Year ended1Q25
2Q25
3Q25
4Q25
4Q25Cash provided from operations$ 253
$ 446
$ 531
$ 654
$ 1,884Capital expenditures(119)
(102)
(108)
(124)
(453)Free cash flow (a)$ 134
$ 344
$ 423
$ 530
$ 1,431Net income (b)$ 344
$ 407
$ 385
$ 372
$ 1,508Free cash flow conversion as a percentage of Net
income(1) (a)/(b)
95 %Net income excluding Special items(2) (c)$ 351
$ 371
$ 385
$ 426
$ 1,533Free cash flow conversion as a percentage of Net
income excluding Special items(1) (a)/(c)
93 %The Accounts Receivable Securitization program remains unchanged at $250 outstanding.
Free cash flow is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews cash flows generated from operations after taking into consideration capital expenditures (due to the fact that these expenditures are considered necessary to maintain and expand the Company's asset base and are expected to generate future cash flows from operations). It is important to note that Free cash flow does not represent the residual cash flow available for discretionary expenditures since other non-discretionary expenditures, such as mandatory debt service requirements, are not deducted from the measure.
(1)We compute free cash flow conversion on an annual basis only due to the cycle of our businesses.(2)Please refer to the Reconciliation of Net income excluding Special items for the reconciliation from Net income to Net income excluding Special items. Howmet Aerospace Inc. and subsidiariesSegment Information (unaudited)(in U.S. dollar millions)
1Q242Q243Q244Q2420241Q252Q253Q254Q252025Engine Products
Third-party sales$ 885$ 933$ 945$ 972$ 3,735$ 996$ 1,056$ 1,105$ 1,163$4,320Inter-segment sales$ 2$ 1$ 3$ 1$ 7$ 2$ 2$ 1$ 2$7Provision for depreciation and amortization$ 33$ 33$ 34$ 39$ 139$ 34$ 35$ 38$ 39$146Segment Adjusted EBITDA$ 249$ 292$ 307$ 302$ 1,150$ 325$ 349$ 368$ 396$1,438Segment Adjusted EBITDA Margin28.1 %31.3 %32.5 %31.1 %30.8 %32.6 %33.0 %33.3 %34.0 %33.3 %Restructuring and other (credits) charges$ —$ (1)$ 1$ 1$ 1$ —$ —$ —$ 88$88Capital expenditures$ 55$ 33$ 55$ 76$ 219$ 86$ 75$ 74$ 84$319
Fastening Systems
Third-party sales$ 389$ 394$ 392$ 401$ 1,576$ 412$ 431$ 448$ 454$1,745Inter-segment sales$ —$ —$ —$ 1$ 1$ —$ —$ —$ 1$1Provision for depreciation and amortization$ 11$ 13$ 12$ 11$ 47$ 12$ 12$ 12$ 12$48Segment Adjusted EBITDA$ 92$ 101$ 102$ 111$ 406$ 127$ 126$ 138$ 139$530Segment Adjusted EBITDA Margin23.7 %25.6 %26.0 %27.7 %25.8 %30.8 %29.2 %30.8 %30.6 %30.4 %Restructuring and other charges (credits)$ —$ 2$ 1$ 2$ 5$ —$ 1$ —$ (1)$—Capital expenditures$ 7$ 5$ 5$ 9$ 26$ 10$ 9$ 13$ 20$52
Engineered Structures
Third-party sales$ 262$ 275$ 253$ 275$ 1,065$ 282$ 290$ 289$ 287$1,148Inter-segment sales$ 1$ 3$ 3$ 3$ 10$ 3$ 3$ 2$ 1$9Provision for depreciation and amortization$ 11$ 11$ 10$ 10$ 42$ 12$ 10$ 9$ 10$41Segment Adjusted EBITDA$ 37$ 40$ 38$ 51$ 166$ 60$ 62$ 58$ 63$243Segment Adjusted EBITDA Margin14.1 %14.5 %15.0 %18.5 %15.6 %21.3 %21.4 %20.1 %22.0 %21.2 %Restructuring and other charges (credits)$ —$ 18$ (3)$ (3)$ 12$ (4)$ —$ —$ —$(4)Capital expenditures$ 6$ 5$ 5$ 4$ 20$ 5$ 6$ 9$ 13$33
Forged Wheels
Third-party sales$ 288$ 278$ 245$ 243$ 1,054$ 252$ 276$ 247$ 264$1,039Provision for depreciation and amortization$ 10$ 10$ 10$ 12$ 42$ 10$ 10$ 11$ 11$42Segment Adjusted EBITDA$ 82$ 75$ 64$ 66$ 287$ 68$ 76$ 73$ 79$296Segment Adjusted EBITDA Margin28.5 %27.0 %26.1 %27.2 %27.2 %27.0 %27.5 %29.6 %29.9 %28.5 %Restructuring and other charges (credits)$ —$ 1$ —$ —$ 1$ —$ (1)$ —$ —$(1)Capital expenditures$ 12$ 9$ 14$ 10$ 45$ 15$ 8$ 9$ 4$36Differences between the total segment and consolidated totals are in Corporate. Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited)(in U.S. dollar millions)Reconciliation of Total Segment Adjusted EBITDA to Consolidated Income Before Income Taxes
1Q242Q243Q244Q2420241Q252Q253Q254Q252025Income before income taxes$ 303$ 334$ 354$ 392$ 1,383$ 446$ 469$ 495$ 430$ 1,840Loss on debt redemption——6—6———1515Interest expense, net4949444018239383737151Other expense, net171517136291410740Operating income$ 369$ 398$ 421$ 445$ 1,633$ 494$ 521$ 542$ 489$ 2,046Segment provision for
depreciation and amortization6567667227068677072277Unallocated amounts:
Restructuring and other charges
(credits)—22(1)—21(4)——8884Corporate expense(1)262125138522252528100Total Segment Adjusted EBITDA$ 460$ 508$ 511$ 530$ 2,009$ 580$ 613$ 637$ 677$ 2,507
Total Segment Adjusted EBITDA is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because Total Segment Adjusted EBITDA provides additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Total Segment Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. Howmet's definition of Total Segment Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold; Selling, general administrative, and other expenses; Research and development expenses; and Provision for depreciation and amortization. Special items, including Restructuring and other charges (credits), are excluded from net margin and Segment Adjusted EBITDA. Differences between the total segment and consolidated totals are in Corporate.
(1) Pre-tax special items included in Corporate expense
1Q242Q243Q244Q2420241Q252Q253Q254Q252025Plant fire reimbursements, net$ —$ (6)$ —$ (12)$ (18)$ —$ —$ —$ —$ —Acquisition costs————————22Costs (benefits) associated with
closures, supply chain disruptions,
and other items1—(1)111(1)—11Total Pre-tax special items
included in Corporate expense$ 1$ (6)$ (1)$ (11)$ (17)$ 1$ (1)$ —$ 3$ 3 Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited), continued(in U.S. dollar millions, except per-share and share amounts)Reconciliation of Net income excluding
Special itemsQuarter ended
Year ended4Q24
3Q25
4Q25
December 31,
2024
December 31,
2025Net income$ 314
$ 385
$ 372
$ 1,155
$ 1,508
Diluted earnings per share ("EPS")$ 0.77
$ 0.95
$ 0.92
$ 2.81
$ 3.71
Average number of diluted shares408
405
404
410
406
Special items:
Restructuring and other charges(1)—
—
88
21
84Loss on debt redemption—
—
15
6
15Plant fire reimbursements, net(12)
—
—
(18)
—Acquisition costs—
—
2
—
2Costs associated with closures, supply
chain disruptions, and other items1
—
1
1
1Subtotal: Pre-tax special items(11)
—
106
10
102Tax impact of Pre-tax special items(2)2
—
(26)
1
(25)Subtotal(9)
—
80
11
77
Discrete and other tax special items(3)(2)
—
(26)
(59)
(52)Total: After-tax special items(11)
—
54
(48)
25Net income excluding Special items$ 303
$ 385
$ 426
$ 1,107
$ 1,533
Diluted EPS excluding Special items$ 0.74
$ 0.95
$ 1.05
$ 2.69
$ 3.77Net income excluding Special items and Diluted EPS excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Restructuring and other charges, Discrete tax items, and Other special items (collectively, "Special items"). There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Net income and Diluted EPS determined under GAAP as well as Net income excluding Special items and Diluted EPS excluding Special items.
(1)Restructuring and other charges for the quarter ended and year ended December 31, 2025 included a non-cash pension settlement charge of $89 primarily resulting from the purchase of group annuity contracts with a third-party carrier to pay and administer future annuity payments for its U.K. pension plan which reduced gross pension obligations. Restructuring and other charges for FY 2024 included a net loss on the sale of a small U.K. manufacturing facility in Engineered Structures of $13 and a charge for layoff costs of $10.
(2)The Tax impact of Pre-tax special items is based on the applicable statutory rates whereby the difference between such rates and the Company's consolidated estimated annual effective tax rate is itself a Special item.
(3)Discrete tax items for the quarter ended December 31, 2025, year ended December 31, 2024, and year ended December 31, 2025 are discussed further in the Reconciliation of Operational Tax Rate. Discrete tax items for the remaining periods included the following:
•for 4Q24, a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), an excess tax benefit for stock compensation ($1), a charge for prior year audit assessments and tax adjustments $4, and a charge to adjust a valuation allowance related to U.S. foreign tax credits $2; and
•for 3Q25, a net benefit for other small items ($1). Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited), continued(in U.S. dollar millions)Reconciliation
of Operational
tax rate4Q25
YTD 2024
YTD 2025Effective
tax rate,
as
reported
Special
items(1)(3)
Operational
tax rate,
as
adjusted
Effective
tax rate,
as
reported
Special
items(2)(3)
Operational
tax rate, as
adjusted
Effective
tax rate,
as
reported
Special
items(2)(3)
Operational
tax rate, as
adjustedIncome before
income taxes$ 430
$ 106
$ 536
$ 1,383
$ 10
$ 1,393
$ 1,840
$ 102
$ 1,942Provision for
income taxes$ 58
$ 52
$ 110
$ 228
$ 58
$ 286
$ 332
$ 77
$ 409Tax rate13.5 %
20.5 %
16.5 %
20.5 %
18.0 %
21.1 %
Operational tax rate is a non-GAAP financial measure. Management believes that this measure is meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both the Effective tax rate determined under GAAP as well as the Operational tax rate.(1)Pre-tax special items for 4Q25 included Restructuring and other charges $88, Loss on debt redemption $15, Acquisition costs $2, and Costs associated with closures, supply chain disruptions, and other items $1.
(2)Pre-tax special items for YTD 2024 included Restructuring and other charges $21, Loss on debt redemption $6, Costs associated with closures, supply chain disruptions, and other items $1, partially offset by Plant fire reimbursements, net ($18). Pre-tax special items for YTD 2025 included Restructuring and other charges $84, Loss on debt redemption $15, Acquisition costs $2, and Costs associated with closures, supply chain disruptions, and other items $1.
(3)Tax Special items includes discrete tax items, the tax impact on Special items based on the applicable statutory rates, the difference between such rates and the Company's consolidated estimated annual effective tax rate and other tax related items. Discrete tax items for each period included the following:
•for 4Q25, a benefit to release a valuation allowance related to U.S. foreign tax credits ($8), a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), a net benefit for prior year tax adjustments ($4), an excess benefit for stock compensation ($3), a benefit related to re-establishing a tax holiday in China ($4), a net benefit for other small items ($2), and a charge related to the expiration of a tax holiday in China $2;
•for YTD 2024, a net benefit related to additional U.S. federal and state research and development ("R&D") credits claimed for prior years upon completion of the Company's R&D study ($44), an excess tax benefit for stock compensation ($10), a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), a benefit to release a valuation allowance related to U.S. foreign tax credits ($4), a net charge for prior year audit assessments and tax adjustments $4, and a charge for other small items $1; and
•for YTD 2025, an excess tax benefit for stock compensation ($18), benefits related to U.S. tax accounting method changes for certain prior period transaction and other costs ($17), a benefit to release a valuation allowance related to U.S. foreign tax credits ($8), a benefit to release a valuation allowance related to U.S. state tax losses and credits ($6), a net benefit related to U.S. federal and state R&D credits claimed for prior years ($5), a net benefit for prior year tax adjustments ($3), a net benefit for other small items ($3), and a net charge related to the expiration of a tax holiday in China $8. Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited), continued(in U.S. dollars millions)Reconciliation of Adjusted EBITDA and
Adjusted EBITDA margin excluding
Special itemsQuarter ended
Year ended4Q24
3Q25
4Q25
4Q24
4Q25Sales$ 1,891
$ 2,089
$ 2,168
$ 7,430
$ 8,252Operating income$ 445
$ 542
$ 489
$ 1,633
$ 2,046Operating income margin23.5 %
25.9 %
22.6 %
22.0 %
24.8 %
Net income$ 314
$ 385
$ 372
$ 1,155
$ 1,508Add:
Provision for income taxes$ 78
$ 110
$ 58
$ 228
$ 332Other expense, net13
10
7
62
40Loss on debt redemption—
—
15
6
15Interest expense, net40
37
37
182
151Restructuring and other charges—
—
88
21
84Provision for depreciation and amortization73
72
73
277
283Adjusted EBITDA$ 518
$ 614
$ 650
$ 1,931
$ 2,413
Add:
Plant fire reimbursements, net$ (12)
$ —
$ —
$ (18)
$ —Acquisition costs—
—
2
—
2Costs associated with closures, supply
chain disruptions, and other items1
—
1
1
1Adjusted EBITDA excluding Special items$ 507
$ 614
$ 653
$ 1,914
$ 2,416
Adjusted EBITDA margin excluding Special items26.8 %
29.4 %
30.1 %
25.8 %
29.3 %Adjusted EBITDA, Adjusted EBITDA excluding Special items, and Adjusted EBITDA margin excluding Special items are non-GAAP financial measures. Management believes that these measures are meaningful to investors because they provide additional information with respect to the Company's operating performance and the Company's ability to meet its financial obligations. The Adjusted EBITDA presented may not be comparable to similarly titled measures of other companies. The Company's definition of Adjusted EBITDA (Earnings before interest, taxes, depreciation, and amortization) is net margin plus an add-back for depreciation and amortization. Net margin is equivalent to Sales minus the following items: Cost of goods sold, Selling, general administrative, and other expenses, Research and development expenses, and Provision for depreciation and amortization. Special items, including Restructuring and other charges, are excluded from Adjusted EBITDA. Howmet Aerospace Inc. and subsidiariesCalculation of Financial Measures (unaudited), continued(in U.S. dollar millions)Reconciliation of Adjusted Operating Income
Excluding Special Items and Adjusted Operating
Income Margin Excluding Special ItemsQuarter ended
Year ended4Q24
3Q25
4Q25
December
31, 2024
December
31, 2025Sales$ 1,891
$ 2,089
$ 2,168
$ 7,430
$ 8,252Operating income$ 445
$ 542
$ 489
$ 1,633
$ 2,046Operating income margin23.5 %
25.9 %
22.6 %
22.0 %
24.8 %
Add:
Restructuring and other charges$ —
$ —
$ 88
$ 21
$ 84Plant fire reimbursements, net(12)
—
—
(18)
—Acquisition costs—
—
2
—
2Costs associated with closures, supply chain disruptions,
and other items1
—
1
1
1Adjusted operating income excluding Special items$ 434
$ 542
$ 580
$ 1,637
$ 2,133
Adjusted operating income margin excluding Special items23.0 %
25.9 %
26.8 %
22.0 %
25.8 %Adjusted operating income excluding Special items and Adjusted operating income margin excluding Special items are non-GAAP financial measures. Special items, including Restructuring and other charges, are excluded from Adjusted operating income. Management believes that these measures are meaningful to investors because management reviews the operating results of the Company excluding the impacts of Special items. There can be no assurances that additional Special items will not occur in future periods. To compensate for this limitation, management believes that it is appropriate to consider both Operating income determined under GAAP as well as Operating income excluding Special items.
View original content to download multimedia:https://www.prnewswire.com/news-releases/howmet-aerospace-reports-fourth-quarter-and-full-year-2025-results-302685818.htmlSOURCE Howmet Aerospace Inc.
Original: Howmet Aerospace Reports Fourth Quarter and Full Year 2025 Results
US Market News
5月前
Stanley Black & Decker Reports 4Q and Full Year 2025 ResultsFebruary 4, 2026 6:00 AM
PR Newswire (US)
Solid Execution Delivers Full-Year Gross Margin and Net Income Growth Amid Dynamic Operating Environment Strong Cash Generation Supports Capital Allocation Priorities of Shareholder Dividends and Further Debt ReductionNEW BRITAIN, Conn., Feb. 4, 2026 /PRNewswire/ -- Stanley Black & Decker (NYSE: SWK), a global leader in tools and outdoor solutions, today announced fourth quarter and full year 2025 financial results.Fourth Quarter HighlightsNet sales of $3.7 billion, down 1% versus prior year and down 3% on an organic basis*Gross margin of 33.2%, up 240 basis points versus prior year; adjusted gross margin* of 33.3%, up 210 basis points versus prior yearEPS of $1.04; adjusted EPS* of $1.41Cash from operating activities of $956 million; free cash flow* of $883 millionAnnounced definitive agreement to divest the Consolidated Aerospace Manufacturing (CAM) business for $1.8 billion in cashFull Year HighlightsNet sales of $15.1 billion, down 2% versus prior year and down 1% on an organic basis*Gross margin of 30.3%, up 90 basis points versus prior year; adjusted gross margin* of 30.7%, up 70 basis points versus prior yearEPS of $2.65 and adjusted EPS* of $4.67Cash from operating activities of $971 million and free cash flow* of $688 million, which supported approximately $240 million in total debt reductionChris Nelson, Stanley Black & Decker's President & CEO, commented, "Stanley Black & Decker delivered solid results across our key focus areas in 2025, with continued gross margin and net income growth, strong free cash flow*, a strengthened balance sheet, and strategic investments focused on driving sustainable, profitable growth. I would like to thank our team for their resilience and commitment to serving our customers and achieving these results despite the dynamic environment."Looking ahead, we are excited about the opportunities for Stanley Black & Decker and remain committed to and confident in our ability to achieve our long-term financial objectives, even if 2026 presents another uncertain, dynamic year."* Non-GAAP financial measure as further defined on page 64Q 2025 Results (all comparisons versus prior year)Net sales of $3.7 billion, down 1%, as higher price (+4%) and currency (+2%) were more than offset by lower volume (-7%). The volume decline was primarily due to retail softness in North America.Gross margin of 33.2%, up 240 basis points, and adjusted gross margin* of 33.3%, up 210 basis points. This significant year-over-year expansion was primarily due to higher pricing, tariff mitigation, and supply chain cost reductions.SG&A expenses of 21.8% of sales, down 120 basis points, and adjusted SG&A expenses* of 21.5%, down 100 basis points. This reduction was primarily due to disciplined and targeted cost management, which more than offset strategic growth investments.The tax rate of 30.6% and the adjusted tax rate* of 26.6%.Net earnings were 4.3%, a decrease of 90 basis points, due predominantly to the change in year-over-year tax rate. EBITDA margin* of 11.8%, an increase of 270 basis points, and adjusted EBITDA margin* of 13.5%, an increase of 330 basis points.Cash from operating activities of $956 million, and free cash flow* of $883 million. This strong performance was driven primarily by working capital improvements and tariff mitigation.4Q 2025 Segment Results ($ in M)SalesSegment
ProfitCharges1Adj. Segment
Profit*Segment
MarginAdj. Segment
Margin*Tools &
Outdoor$3,160$418.3$11.4$429.713.2 %13.6 %Engineered
Fastening2$524$63.2$0.2$63.412.1 %12.1 %1 See Non-GAAP adjustments on page 15.2 Formerly known as "Industrial." Refer to page 12 for further information.* Non-GAAP financial measure as further defined on page 6Tools & Outdoor net sales were down 2% year over year, as higher pricing (+5%) and currency tailwinds (+2%) were more than offset by volume declines (-9%). Organic revenues* were down 4%, driven primarily by power tool demand dynamics in retail channels in North America and a soft market backdrop in several developed markets, offset partially by growth in outdoor products. North America sales declined by 4% on a total basis and 5% organically*, Europe increased by 5% on a total basis but decreased by 3% organically*, while the Rest of World saw declines of 2% on a total basis and 4% organically*. The Tools & Outdoor segment margin was 13.2%, up 400 basis points year over year, and Adjusted segment margin* was 13.6%, up 340 basis points. This significant margin expansion was primarily due to higher pricing, tariff mitigation, and supply chain cost reductions.Engineered Fastening net sales were up 6% year over year, as strong volume (+7%), slightly higher pricing (+1%) and a modest tailwind from currency (+1%) were partially offset by a product line transfer to Tools & Outdoor (-3%). Organic revenues* were up 8%, due primarily to strong demand in aerospace and automotive. The Engineered Fastening segment margin and adjusted segment margin* were 12.1%, both up 140 basis points year over year. This significant margin expansion was primarily due to higher volumes, modest price increases, and strong cost controls.FY 2025 Segment Results ($ in M)SalesSegment
ProfitCharges1Adj. Segment
Profit*Segment MarginAdj. Segment
Margin*Tools &
Outdoor$13,158$1,328.8$81.6$1,410.410.1 %10.7 %Engineered
Fastening2,3$1,972$197.0$29.3$226.310.0 %11.5 %1 See Non-GAAP adjustments on page 16.2 Formerly known as "Industrial." Refer to page 12 for further information.3 Refer to page 12 for CAM business performance.Cost Reduction Program Targets Achieved with $2.1 Billion in Savings The Global Cost Reduction Program generated approximately $120 million of incremental pre-tax run-rate cost savings in the fourth quarter. Since its inception in mid-2022, the program has generated approximately $2.1 billion of pre-tax run-rate savings, achieving its original cost savings target. Operational excellence is and will remain one of the Company's three strategic imperatives. The Company will institutionalize the pursuit of annual productivity savings, as continuous improvement processes continue to drive sustainable growth and margin expansion.Announced Divestiture Will Drive Meaningful Reduction of Debt LeverageThe Company announced a definitive agreement on December 22, 2025 to divest the CAM business for $1.8 billion in cash. Net proceeds – after taxes and fees – are expected to be in the range of $1.525 billion to $1.6 billion, which the Company expects to utilize to reduce debt. The transaction is expected to close in the first half of 2026 and is subject to regulatory approval and other customary closing conditions. Until the transaction closes, the results of CAM will remain in continuing operations.Patrick Hallinan, EVP, Chief Financial Officer & Chief Administrative Officer, commented, "In 2025, our rapid response to tariffs and continued strategic focus resulted in meaningful margin and leverage reduction progress despite a challenging environment. Achieving full year adjusted gross margin* of 30.7% and free cash flow* of $688 million were each critical to reducing our debt by approximately $240 million, returning $500 million of cash to shareholders through our dividend, and also supporting incremental growth investments to fuel brand building and innovation for future results."Our priorities are clear. We remain committed to executing our strategic plans to attain our near-term and long-term margin and cash flow objectives, while also reducing our net debt leverage ratio via the CAM divestiture and enhancing our earnings power to position the Company for long-term growth and value creation."2026 Planning Assumptions The Company expects 2026 EPS to be in the range of $3.15 to $4.35 on a GAAP basis and in the range of $4.90 to $5.70 on an adjusted basis*. This represents growth of 42% and 13%, respectively, at the midpoint of each range. The Company is targeting free cash flow* to be in the range of $700 to $900 million, reflecting an increase of 16% at the midpoint. These underlying planning assumptions include CAM results for the first half of 2026 and the current tariff landscape.The difference between the GAAP and Adjusted EPS* assumption range is approximately $1.35 to $1.75, consisting primarily of charges related to footprint actions and other cost actions.*Non-GAAP financial measure as further defined on page 64Q 2025 Non-GAAP AdjustmentsTotal pre-tax non-GAAP adjustments in the fourth quarter were $64.1 million, primarily related to restructuring costs, a non-cash asset impairment charge, and footprint actions related to the supply chain transformation. Gross profit and SG&A included $5.9 million and $7.9 million of charges, respectively, while Other-net included a net benefit of $7.1 million. The Company also recognized Restructuring charges of $37.0 million and Asset impairment charges of $20.4 million.Earnings WebcastStanley Black & Decker will host a webcast with investors today, February 4, 2026, at 8:00 am ET. A slide presentation, which will accompany the call, will be available on the "Investors" section of the Company's website at www.stanleyblackanddecker.com/investors and will remain available after the call.The call will be available through a live, listen-only webcast or teleconference. Links to access the webcast, register for the teleconference, and view the accompanying slide presentation will be available on the "Investors" section of the Company's website, www.stanleyblackanddecker.com/investors under the subheading "News & Events." A replay will also be available two hours after the call and can be accessed on the "Investors" section of Stanley Black & Decker's website.About Stanley Black & Decker Founded in 1843 and headquartered in the USA, Stanley Black & Decker (NYSE: SWK) is a worldwide leader in Tools and Outdoor, operating manufacturing facilities globally. The Company's approximately 43,500 employees produce innovative end-user inspired power tools, hand tools, storage, digital jobsite solutions, outdoor and lifestyle products, and engineered fasteners to support the world's builders, tradespeople and DIYers. The Company's world class portfolio of trusted brands includes DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet®. To learn more visit: www.stanleyblackanddecker.com or follow Stanley Black & Decker on Facebook, Instagram, LinkedIn and X.Investor Contacts:
Michael Wherley
Vice President, Investor Relations
michael.wherley @StraightlifeChristina Francis
Senior Director, Investor Relations
christina.francis @dnapheadMedia Contacts:
Debora Raymond
Vice President, Public Relations
debora.raymond @FranksEscaped Non-GAAP Financial Measures Organic revenue or organic sales is defined as the difference between total current and prior year sales less the impact of companies acquired and divested in the past twelve months, foreign currency fluctuations, and transfers of product lines between segments. Organic revenue growth, organic sales growth or organic growth is organic revenue or organic sales divided by prior year sales. Gross profit is defined as sales less cost of sales. Gross margin is gross profit as a percent of sales. Segment profit is defined as sales less cost of sales and selling, general and administrative ("SG&A") expenses (aside from corporate overhead expense). Segment margin is segment profit as a percent of sales. EBITDA is earnings before interest, taxes, depreciation and amortization. EBITDA margin is EBITDA as a percent of sales. Gross profit, gross margin, SG&A, segment profit, segment margin, earnings, EBITDA and EBITDA margin are adjusted for certain gains and charges, such as supply chain transformation costs, asset impairments, voluntary retirement program costs, environmental charges, acquisition and divestiture-related items, restructuring, and other adjusting items. Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory income tax rates.Management uses these metrics as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Adjusted earnings per share or adjusted EPS, is diluted GAAP EPS excluding certain gains and charges. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Free cash flow conversion is defined as free cash flow divided by net income. Net debt to adjusted EBITDA is total debt less cash on hand divided by adjusted EBITDA. The Non-GAAP financial measures are reconciled to GAAP on pages 13 through 18 and in the appendix to the earnings conference call slides available at http://www.stanleyblackanddecker.com/investors. The Company considers the use of the Non-GAAP financial measures above relevant to aid analysis and understanding of the Company's results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods.The Company provides expectations for the non-GAAP financial measures of full year 2026 adjusted EPS, presented on a basis excluding certain gains and charges, as well as 2026 free cash flow. Forecasted full-year 2026 adjusted EPS is reconciled to forecasted full-year 2026 GAAP EPS under "2026 Planning Assumptions". Consistent with past methodology, the forecasted full-year 2026 GAAP EPS excludes the impacts of potential acquisitions and divestitures (unless otherwise noted), future regulatory changes or strategic shifts that could impact the Company's contingent liabilities or intangible assets, respectively, potential future cost actions in response to external factors that have not yet occurred, and any other items not specifically referenced under "2026 Planning Assumptions". A reconciliation of forecasted free cash flow to its most directly comparable GAAP estimate is not available without unreasonable effort due to high variability and difficulty in predicting items that impact cash flow from operations, which could be material to the Company's results in accordance with U.S. GAAP. The Company believes such a reconciliation would also imply a degree of precision that is inappropriate for this forward-looking measure.The Company may also provide multi-year strategic goals for the non-GAAP financial measures of adjusted gross margin and net debt to adjusted EBITDA, presented on a basis excluding certain gains and charges. A reconciliation for these non-GAAP measures is not available without unreasonable effort due to the inherent difficulty of forecasting the timing and/or amount of various items that have not yet occurred, including the high variability and low visibility with respect to certain gains or charges that would generally be excluded from non-GAAP financial measures and which could be material to the Company's results in accordance with U.S. GAAP. Additionally, estimating such GAAP measures and providing a meaningful reconciliation consistent with the Company's accounting policies for future periods requires a level of precision that is unavailable for these future multi-year periods and cannot be accomplished without unreasonable effort. The Company believes such a reconciliation would also imply a degree of precision that is inappropriate for these forward-looking measures.CAUTIONARY STATEMENT
CONCERNING FORWARD-LOOKING STATEMENTSThis document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including, but not limited to, any goals, projections, guidance or planning assumptions or scenarios regarding earnings, EPS, income, revenue, margins or margin expansion, costs and cost savings, sales, sales growth, profitability, cash flow, leverage ratios or other financial items; any statements of the plans, strategies and objectives of management for future operations, including expectations around productivity and efficiency goals and future operational strategies following completion of the Company's transformation; future market share gain, shareholder returns, any statements concerning innovation initiatives and proposed new products, services or developments and brand prioritization strategies; any statements regarding future economic conditions or performance; any statements concerning future dividends; any statements of beliefs, plans, intentions or expectations; any statements and assumptions or scenarios regarding possible tariff and tariff impact projections and related mitigation plans (including price actions, supply chain adjustments and expected timing and benefits related to such plans); any statements concerning the consummation of the CAM sale transaction, the Company's ability to maximize value for shareholders through active portfolio management and the impact of the transaction to fund debt reduction and support the Company's capital allocation strategy; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among others, the words "may," "will," "estimate," "intend," "could," "project," "plan," "continue," "believe," "expect," "anticipate", "run-rate", "annualized", "forecast", "commit", "goal", "target", "design", "on track", "position or positioning", "guidance," "aim," "looking forward," "multi-year" or any other similar words.Although the Company believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of its forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in the Company's filings with the Securities and Exchange Commission.Important factors that could cause the Company's actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in its forward-looking statements include, among others, the following: (i) successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services as well as successful execution of, and realization of expected benefits from, the Company's brand prioritization and investment strategy, including potential licensing initiatives and related restructuring efforts, and its ability to estimate and mitigate negative consequences from the same including, but not limited to, reduced ability to generate sales; (ii) macroeconomic factors, including global and regional business conditions, commodity availability and prices, inflation and deflation, interest rate volatility, currency exchange rates, and uncertainties in the global financial markets; (iii) laws, regulations and governmental policies affecting the Company's activities in the countries where it does business or sources supply inputs, including those related to, taxation, data privacy, anti-bribery, anti-corruption, government contracts, and trade controls, including but not limited to, tariffs, import and export controls, raw material and rare earth related controls and other monetary and non-monetary trade regulations or barriers; (iv) the Company's ability to predict the timing and extent of any trade related regulations, clearances, restrictions, including but not limited to, trade barriers, tariffs, raw material and rare earth related controls, as well as its ability to successfully assess the impact to its business of, and mitigate or respond to, such macroeconomic or trade, tariff and raw material and rare earth import/export control changes or policies (including, but not limited to, the Company's ability to obtain price increases from its customers and complete effective supply chain adjustments within anticipated time frames and ability to obtain rare earth related supply clearances); (v) the economic, political, cultural and legal environment in the U.S., Europe, and the emerging markets in which the Company generates sales, particularly Latin America and China; (vi) realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures; (vii) pricing pressure and other changes within competitive markets; (viii) availability and price of raw materials, rare earth materials, component parts, freight, energy, labor and sourced finished goods; (ix) the impact that the tightened credit markets may have on the Company or its customers or suppliers; (x) the extent to which the Company has to write off accounts receivable, inventory or other assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; (xi) the Company's ability to identify and effectively execute productivity improvements and cost reductions; including complexity reduction through platforming products and SKU reduction initiatives, and other manufacturing and administrative reorganization actions; (xii) potential business, supply chain and distribution disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, natural disasters or pandemics, sanctions, political unrest, war or terrorism, including the conflicts between Russia and Ukraine, and Israel and Hamas, and tensions or conflicts in South Korea, China, Taiwan and the Middle East; (xiii) the continued consolidation of customers, particularly in consumer channels, and the Company's continued reliance on significant customers; (xiv) managing franchisee relationships; (xv) the impact of poor weather conditions and climate change and risks related to the transition to a lower-carbon economy, such as the Company's ability to successfully adopt new technology, meet market-driven demands for carbon neutral and renewable energy technology, or to comply with changes in environmental regulations or requirements, which may be more stringent and complex, impacting its reporting processes and manufacturing facilities and business operations as well as remediation plans and costs relating to any of its current or former locations or other sites; (xvi) maintaining or improving production rates in the Company's manufacturing facilities (including leveraging its North American footprint in connection with tariff mitigation), responding to significant changes in customer preferences or expectations, product demand and fulfilling demand for new and existing products, and learning, adapting and integrating new technologies into products, services and processes; (xvii) changes in the competitive landscape in the Company's markets; (xviii) the Company's non-U.S. operations, including sales to non-U.S. customers; (xix) the Company's ability to predict the extent or timing of, and impact from, demand changes within domestic or world-wide markets associated with construction, homebuilding and remodeling, aerospace, outdoor, engineered fastening, automotive and other markets which the Company serves; (xx) potential adverse developments in new or pending litigation and/or government investigations; (xxi) the incurrence of debt and changes in the Company's ability to obtain debt on commercially reasonable terms and at competitive rates; (xxii) substantial pension and other postretirement benefit obligations; (xxiii) potential regulatory liabilities, including environmental, privacy, data breach, workers compensation and product liabilities; (xxiv) attracting, developing and retaining senior management and other key employees, managing a workforce in many jurisdictions, labor shortages, work stoppages or other labor disruptions; (xxv) the Company's ability to keep abreast with the pace of technological change; (xxvi) changes in accounting estimates; (xxvii) the Company's ability to protect its intellectual property rights and to maintain its public reputation and the strength of its brands; (xxviii) critical or negative publicity, including on social media, whether or not accurate, concerning the Company's brands, products, culture, key employees or suppliers, or initiatives, and the Company's handling of divergent stakeholder expectations regarding the same; and (xxix) the failure to consummate, or a delay in the consummation of, the CAM sale transaction for various reasons (including but not limited to failure to receive, or delay in receiving, required regulatory approvals and meet customary closing conditions), and failure to realize the expected benefits of the Company's value creation, debt reduction and capital allocation strategy.Additional factors that could cause actual results to differ materially from forward-looking statements are set forth in the Annual Report on Form 10-K and in the Quarterly Reports on Form 10-Q, including under the headings "Risk Factors," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the Consolidated Financial Statements and the related Notes, and other filings with the Securities and Exchange Commission.Forward-looking statements in this press release speak only as of the date hereof, and forward-looking statements in documents that are incorporated by reference herein speak only as of the date of those documents. The Company does not undertake any obligation or intention to update or revise any forward-looking statements, whether as a result of future events or circumstances, new information or otherwise, except as required by law.STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
NET SALES
$ 3,684.6
$ 3,720.5
$ 15,130.4
$ 15,365.7
COSTS AND EXPENSES
Cost of sales
2,462.7
2,576.4
10,542.1
10,851.3
Gross profit
1,221.9
1,144.1
4,588.3
4,514.4
% of Net Sales
33.2 %
30.8 %
30.3 %
29.4 %
Selling, general and administrative
801.8
855.2
3,332.9
3,332.7
% of Net Sales
21.8 %
23.0 %
22.0 %
21.7 %
Other - net
53.3
55.9
240.7
448.8
Loss on sale of business
-
-
0.3
-
Asset impairment charges
20.4
-
189.5
72.4
Restructuring charges
37.0
33.0
89.1
99.9
Income from operations
309.4
200.0
735.8
560.6
Interest - net
81.4
74.6
317.9
319.5
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES228.0
125.4
417.9
241.1
Income taxes on continuing operations
69.8
(69.5)
16.0
(45.2)
NET EARNINGS FROM CONTINUING OPERATIONS
$ 158.2
$ 194.9
$ 401.9
$ 286.3
Gain on Security sale before income taxes
-
-
-
10.4
Income taxes on discontinued operations
-
-
-
2.4
NET EARNINGS FROM DISCONTINUED OPERATIONS$ -
$ -
$ -
$ 8.0
NET EARNINGS
$ 158.2
$ 194.9
$ 401.9
$ 294.3
BASIC EARNINGS PER SHARE OF COMMON STOCK
Continuing operations
$ 1.04
$ 1.29
$ 2.66
$ 1.90
Discontinued operations
$ -
$ -
$ -
$ 0.05
Total basic earnings per share of common stock
$ 1.04
$ 1.29
$ 2.66
$ 1.96
DILUTED EARNINGS PER SHARE OF COMMON STOCK
Continuing operations
$ 1.04
$ 1.28
$ 2.65
$ 1.89
Discontinued operations
$ -
$ -
$ -
$ 0.05
Total diluted earnings per share of common stock
$ 1.04
$ 1.28
$ 2.65
$ 1.95
DIVIDENDS PER SHARE OF COMMON STOCK
$ 0.83
$ 0.82
$ 3.30
$ 3.26
WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands)
Basic
151,446
150,725
151,258
150,485
Diluted
152,137
151,710
151,878
151,297
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars)
January 3,
December 28,
2026
2024
ASSETS
Cash and cash equivalents
$ 280.1
$ 290.5
Accounts and notes receivable, net
919.7
1,153.7
Inventories, net
4,157.1
4,536.4
Current assets held for sale
262.4
-
Other current assets
359.7
397.1
Total current assets
5,979.0
6,377.7
Property, plant and equipment, net
1,831.8
2,034.3
Goodwill and other intangibles, net
10,374.8
11,636.4
Long-term assets held for sale
1,273.9
-
Other assets
1,784.2
1,800.5
Total assets
$ 21,243.7
$ 21,848.9
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 605.6
$ -
Current maturities of long-term debt
554.8
500.4
Accounts payable
2,163.0
2,437.2
Accrued expenses
1,878.1
1,979.3
Current liabilities held for sale
44.2
-
Total current liabilities
5,245.7
4,916.9
Long-term debt
4,703.3
5,602.6
Long-term liabilities held for sale
9.4
-
Other long-term liabilities
2,230.7
2,609.5
Shareowners' equity
9,054.6
8,719.9
Total liabilities and shareowners' equity$ 21,243.7
$ 21,848.9 STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESSUMMARY OF CASH FLOW ACTIVITY (Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
OPERATING ACTIVITIES
Net earnings
$ 158.2
$ 194.9
$ 401.9
$ 294.3
Depreciation
88.9
99.0
365.6
426.3
Amortization
34.8
40.6
146.8
163.2
Gain on sale of discontinued operations
-
-
-
(10.4)
Loss on sale of business
-
-
0.3
-
Asset impairment charges
20.4
-
189.5
72.4
Changes in working capital1
539.5
344.3
159.4
321.5
Other
113.9
0.3
(292.3)
(160.4)
Net cash provided by operating activities
955.7
679.1
971.2
1,106.9
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(72.8)
(114.5)
(283.3)
(353.9)
Proceeds from sales of businesses, net of cash sold
-
-
5.0
735.6
Payments on long-term debt
(0.1)
-
(850.5)
-
Net short-term commercial paper (repayments) borrowings
(753.0)
(364.6)
572.9
(1,056.9)
Cash dividends on common stock
(126.3)
(124.0)
(500.6)
(491.2)
Other
(4.6)
(6.4)
0.6
3.9
Net cash used in investing and financing activities
(956.8)
(609.5)
(1,055.9)
(1,162.5)
Effect of exchange rate changes on cash
11.0
(77.7)
79.3
(106.2)
Increase (decrease) in cash, cash equivalents and restricted cash
9.9
(8.1)
(5.4)
(161.8)
Cash, cash equivalents and restricted cash, beginning of period
277.5
300.9
292.8
454.6
Cash, cash equivalents and restricted cash, end of period
$ 287.4
$ 292.8
$ 287.4
$ 292.8
Free Cash Flow Computation2
Net cash provided by operating activities
$ 955.7
$ 679.1
$ 971.2
$ 1,106.9
Less: capital and software expenditures
(72.8)
(114.5)
(283.3)
(353.9)
Free cash flow (before dividends)
$ 882.9
$ 564.6
$ 687.9
$ 753.0
Reconciliation of Cash, Cash Equivalents and Restricted Cash
January 3,
2026
December 28,
2024
Cash and cash equivalents
$ 280.1
$ 290.5
Restricted cash included in Other current assets
7.3
2.3
Cash, cash equivalents and restricted cash
$ 287.4
$ 292.8
1Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its
liquidity, as well as its ability to fund future growth and to provide a return to the shareowners, and is useful information for investors. Free cash flow does not include
deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESBUSINESS SEGMENT INFORMATION(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
NET SALES
Tools & Outdoor
$ 3,160.4
$ 3,227.6
$ 13,158.2
$ 13,304.2
Engineered Fastening1,2
524.2
492.9
1,972.2
2,061.5
Total
$ 3,684.6
$ 3,720.5
$ 15,130.4
$ 15,365.7
SEGMENT PROFIT3
Tools & Outdoor
$ 418.3
$ 298.1
$ 1,328.8
$ 1,197.4
Engineered Fastening1,2
$ 63.2
$ 52.7
$ 197.0
$ 254.9
CORPORATE OVERHEAD3
$ (61.4)
$ (61.9)
$ (270.4)
$ (270.6)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
13.2 %
9.2 %
10.1 %
9.0 %
Engineered Fastening1,2
12.1 %
10.7 %
10.0 %
12.4 %
1In the first quarter of 2025, the Industrial segment was renamed "Engineered Fastening" as a result of a more focused
portfolio following recent divestitures. The Engineered Fastening segment name change is to the name only and had no
impact on the Company's consolidated financial statements or segment results. The 2024 amounts shown above for the
Engineered Fastening segment include the results of the Infrastructure business through the date of sale of April 1, 2024.
2In December 2025, the Company announced a definitive agreement to sell its Consolidated Aerospace Manufacturing
("CAM") business. Based on management's commitment to sell this business, the assets and liabilities related to CAM were classified as held for sale on the Company's Condensed Consolidated Balance Sheets as of January 3, 2026.
For the year ended January 3, 2026, net sales and segment profit for Engineered Fastening included $413.9 million and
$31.3 million, respectively, related to the CAM business.
3Segment profit is defined as net sales minus cost of sales and SG&A (aside from corporate overhead expenses).
The corporate overhead element of SG&A, which is not allocated to the business segments for purposes of determining
segment profit, consists of the costs associated with the executive management team and expenses related to centralized
functions that benefit the entire Company but are not directly attributable to the business segments, such as legal and corporate finance functions, as well as expenses for the world headquarters facility.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER 2025
GAAP
Non-GAAP Adjustments
Non-GAAP1
Gross profit
$ 1,221.9
$ 5.9
$ 1,227.8
% of Net Sales
33.2 %
33.3 %
Selling, general and administrative
801.8
(7.9)
793.9
% of Net Sales
21.8 %
21.5 %
Earnings from continuing operations before income taxes228.0
64.1
292.1
Income taxes on continuing operations2
69.8
8.0
77.8
Net earnings from continuing operations
158.2
56.1
214.3
Diluted earnings per share of common stock - Continuing operations$ 1.04
$ 0.37
$ 1.41
FOURTH QUARTER 2024
GAAP
Non-GAAP
Adjustments
Non-GAAP1
Gross profit
$ 1,144.1
$ 16.1
$ 1,160.2
% of Net Sales
30.8 %
31.2 %
Selling, general and administrative
855.2
(18.5)
836.7
% of Net Sales
23.0 %
22.5 %
Earnings from continuing operations before income taxes125.4
49.3
174.7
Income taxes on continuing operations2
(69.5)
18.2
(51.3)
Net earnings from continuing operations
194.9
31.1
226.0
Diluted earnings per share of common stock - Continuing operations$ 1.28
$ 0.21
$ 1.49
1The Non-GAAP 2025 and 2024 information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the
Company's results and business trends aside from the material impact of certain gains and charges and ensures appropriate comparability to
operating results of prior periods. See further detail on Non-GAAP adjustments on page 17.
2Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and
exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory income
tax rates.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR-TO-DATE 2025
GAAP
Non-GAAP Adjustments
Non-GAAP1
Gross profit
$ 4,588.3
$ 50.6
$ 4,638.9
% of Net Sales
30.3 %
30.7 %
Selling, general and administrative
3,332.9
(86.6)
3,246.3
% of Net Sales
22.0 %
21.5 %
Earnings from continuing operations before income taxes417.9
396.2
814.1
Income taxes on continuing operations2
16.0
88.6
104.6
Net earnings from continuing operations
401.9
307.6
709.5
Diluted earnings per share of common stock - Continuing operations$ 2.65
$ 2.02
$ 4.67
YEAR-TO-DATE 2024
GAAP
Non-GAAP Adjustments
Non-GAAP1
Gross profit
$ 4,514.4
$ 88.8
$ 4,603.2
% of Net Sales
29.4 %
30.0 %
Selling, general and administrative
3,332.7
(81.3)
3,251.4
% of Net Sales
21.7 %
21.2 %
Earnings from continuing operations before income taxes241.1
466.0
707.1
Income taxes on continuing operations2
(45.2)
92.6
47.4
Net earnings from continuing operations
286.3
373.4
659.7
Diluted earnings per share of common stock - Continuing operations$ 1.89
$ 2.47
$ 4.36
1The Non-GAAP 2025 and 2024 information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the
Company's results and business trends aside from the material impact of certain gains and charges and ensures appropriate comparability
to operating results of prior periods. See further detail on Non-GAAP adjustments on page 17.
2Income taxes attributable to Non-GAAP adjustments are determined by calculating income taxes on pre-tax earnings, both inclusive and
exclusive of Non-GAAP adjustments, taking into consideration the nature of the Non-GAAP adjustments and the applicable statutory income tax rates.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars)
FOURTH QUARTER 2025
GAAP
Non-GAAP Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 418.3
$ 11.4
$ 429.7
Engineered Fastening
$ 63.2
$ 0.2
$ 63.4
CORPORATE OVERHEAD
$ (61.4)
$ 2.2
$ (59.2)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
13.2 %
13.6 %
Engineered Fastening
12.1 %
12.1 %
FOURTH QUARTER 2024
GAAP
Non-GAAP
Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 298.1
$ 32.1
$ 330.2
Engineered Fastening
$ 52.7
$ 0.2
$ 52.9
CORPORATE OVERHEAD
$ (61.9)
$ 2.3
$ (59.6)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
9.2 %
10.2 %
Engineered Fastening
10.7 %
10.7 %
1Non-GAAP adjustments for the Tools & Outdoor segment relate primarily to footprint actions and other costs
associated with the supply chain transformation, as further discussed on page 17.
2The Non-GAAP 2025 and 2024 business segment and corporate overhead information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the Company's results and business trends aside from the
material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDINGNON-GAAP FINANCIAL MEASURES(Unaudited, Millions of Dollars)
YEAR-TO-DATE 2025
GAAP
Non-GAAP Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 1,328.8
$ 81.6
$ 1,410.4
Engineered Fastening
$ 197.0
$ 29.3
$ 226.3
CORPORATE OVERHEAD
$ (270.4)
$ 26.3
$ (244.1)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
10.1 %
10.7 %
Engineered Fastening
10.0 %
11.5 %
YEAR-TO-DATE 2024
GAAP
Non-GAAP Adjustments1
Non-GAAP2
SEGMENT PROFIT
Tools & Outdoor
$ 1,197.4
$ 143.1
$ 1,340.5
Engineered Fastening
$ 254.9
$ 3.6
$ 258.5
CORPORATE OVERHEAD
$ (270.6)
$ 23.4
$ (247.2)
Segment Profit as a Percentage of Net Sales
Tools & Outdoor
9.0 %
10.1 %
Engineered Fastening
12.4 %
12.5 %
1Non-GAAP adjustments for the business segments relate primarily to separation benefit costs associated with a
voluntary retirement program as well as footprint actions and other costs associated with the supply chain
transformation, as further discussed on page 17. Non-GAAP adjustments for Corporate overhead primarily consist of
voluntary retirement program costs and transition services costs related to previously divested businesses.
2The Non-GAAP 2025 and 2024 business segment and corporate overhead information, as reconciled to GAAP above,
is considered relevant to aid analysis and understanding of the Company's results and business trends aside from the
material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP EARNINGS TO EBITDA(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
Net earnings from continuing operations
$ 158.2
$ 194.9
$ 401.9
$ 286.3
% of Net Sales
4.3 %
5.2 %
2.7 %
1.9 %
Interest - net
81.4
74.6
317.9
319.5
Income taxes on continuing operations
69.8
(69.5)
16.0
(45.2)
Depreciation
88.9
99.0
365.6
426.3
Amortization
34.8
40.6
146.8
163.2
EBITDA1
$ 433.1
$ 339.6
$ 1,248.2
$ 1,150.1
% of Net Sales
11.8 %
9.1 %
8.2 %
7.5 %
Non-GAAP adjustments before income taxes
64.1
49.3
396.2
466.0
Less: Accelerated depreciation included in Non-GAAP adjustments before income taxes
(0.1)
10.6
6.1
59.5
Adjusted EBITDA1
$ 497.3
$ 378.3
$ 1,638.3
$ 1,556.6
% of Net Sales
13.5 %
10.2 %
10.8 %
10.1 %
SUMMARY OF NON-GAAP ADJUSTMENTS BEFORE INCOME TAXES(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR-TO-DATE
2025
2024
2025
2024
Supply Chain Transformation Costs:
Footprint Rationalization2
$ 2.4
$ 8.5
$ 19.0
$ 66.3
Material Productivity & Operational Excellence
3.4
6.2
15.3
18.6
Voluntary retirement program3
(0.4)
-
11.5
-
Other charges
0.5
1.4
4.8
3.9
Gross profit
$ 5.9
$ 16.1
$ 50.6
$ 88.8
Supply Chain Transformation Costs:
Footprint Rationalization2
$ 6.2
$ 8.5
$ 21.3
$ 42.5
Complexity Reduction & Operational Excellence4
2.9
2.5
27.8
8.7
Transition services costs related to previously divested businesses
-
4.8
8.4
19.6
Voluntary retirement program3
(2.4)
-
31.1
(0.1)
Other charges (gains)
1.2
2.7
(2.0)
10.6
Selling, general and administrative
$ 7.9
$ 18.5
$ 86.6
$ 81.3
Income related to providing transition services to previously divested businesses
$ -
$ (4.8)
$ (10.3)
$ (19.6)
Voluntary retirement program3
-
-
6.2
-
Environmental charges5
(2.8)
(8.9)
(3.9)
143.2
Deal-related costs and other6
(4.3)
(4.6)
(11.9)
-
Other, net
$ (7.1)
$ (18.3)
$ (19.9)
$ 123.6
Loss on sale of business
$ -
$ -
$ 0.3
$ -
Asset impairment charges7
20.4
-
189.5
72.4
Restructuring charges
37.0
33.0
89.1
99.9
Non-GAAP adjustments before income taxes
$ 64.1
$ 49.3
$ 396.2
$ 466.0
1EBITDA is earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA excluding certain gains and charges, as summarized above.
EBITDA and Adjusted EBITDA, both Non-GAAP measures, are considered relevant to aid analysis and understanding of the Company's operating results and ensures
appropriate comparability to prior periods.
2Footprint Rationalization costs primarily relate to site transformation and re-configuration costs of $35.4 million and $45.2 million in 2025 and 2024, respectively, as well as
accelerated depreciation of manufacturing and distribution center equipment of $48.9 million in 2024. Facility exit costs related to site closures are reported in Restructuring
charges.
3In June 2025, the Company implemented a voluntary retirement program ("VRP") to right-size the Company's corporate and support functions to align with a more focused
portfolio following recent divestitures and more streamlined operations as part of the supply chain transformation. The costs associated with the VRP relate to separation benefits
provided to eligible employees who voluntarily retired from the Company.
4Complexity Reduction & Operational Excellence costs in 2025 primarily relate to third-party consulting fees to provide expertise in identifying business model changes and
quantifying related cost savings opportunities within the Company's Engineered Fastening business, developing a detailed program and related governance, and assisting the
Company with the implementation of actions necessary to achieve the identified objectives.
5The $143.2 million pre-tax environmental charges in 2024 related primarily to a reserve adjustment for the non-active Centredale Superfund site as a result of regulatory changes and revisions to remediation alternatives.
6Deal-related costs and other in 2025 include an $8.1 million gain on sale of a distribution center as part of the supply chain transformation and a $14.3 million gain related to a
favorable patent infringement settlement, partially offset by deal costs associated with the announced divestiture of the CAM business.
7Asset impairment charges in 2025 include: (a) $108.4 million driven by updates to the Company's brand prioritization strategy impacting the Lenox, Troy-Bilt, and Irwin trade names, (b) $43.9 million related to the write-down of certain minority investments pertaining to legacy corporate ventures, (c) $17.1 million related to the write-down of assets due to the
exit of certain Outdoor product lines, and (d) $20.1 million related to a small business in the Tools & Outdoor segment. Asset impairment charges in 2024 include: (a) $41.0 million
related to the Lenox trade name, (b) $25.5 million related to the Infrastructure business, and (c) $5.9 million related to a small business in the Engineered Fastening segment.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP REVENUE GROWTH TO NON-GAAP ORGANIC GROWTH(Unaudited)
FOURTH QUARTER 2025
GAAP
Revenue Growth
Less:
Acquisitions
Plus: Divestitures
Less:
Product Line
Transfer
Less:
Currency
Non-GAAP
Organic
Growth1
Stanley Black & Decker
-1 %
- %
- %
- %
2 %
-3 %
Tools & Outdoor
-2 %
- %
- %
- %
2 %
-4 %
North America
-4 %
- %
- %
1 %
- %
-5 %
Europe
5 %
- %
- %
1 %
7 %
-3 %
Rest of World
-2 %
- %
- %
- %
2 %
-4 %
Engineered Fastening
6 %
- %
- %
-3 %
1 %
8 %
1Non-GAAP Organic Growth, as reconciled to GAAP Revenue Growth above, is utilized to describe the change in the Company's net sales
excluding the impacts of foreign currency fluctuations, acquisitions during their initial 12 months of ownership, divestitures, and transfers of
product lines between segments. Organic growth is also referred to as organic sales growth and organic revenue growth.
View original content to download multimedia:https://www.prnewswire.com/news-releases/stanley-black--decker-reports-4q-and-full-year-2025-results-302678279.htmlSOURCE Stanley Black & Decker, Inc.
Original: Stanley Black & Decker Reports 4Q and Full Year 2025 Results
Drmicrocap
10年前
Stanley Black & Decker Reports 4Q 2015 Results
PR Newswire Stanley Black & Decker
January 28, 2016 6:00 AM
????
NEW BRITAIN, Conn., Jan. 28, 2016 /PRNewswire/ -- Stanley Black & Decker (SWK) today announced full year and fourth quarter 2015 financial results.
Full Year Revenues Totaled $11.2 Billion Reflecting 6% Organic Growth Offset By 7% Currency Impact
Full Year Operating Margin Rate Expanded 90 Basis Points To 14.2%
Full Year Diluted GAAP EPS Was $5.92, Up 10% From 2014 As Strong Operational Performance More Than Offset $220 Million Of Currency Headwinds
2015 Free Cash Flow Of $871 Million; Working Capital Turns Maintained At 9.2
4Q'15 Revenues Totaled $2.8 Billion With 1% Organic Growth
4Q'15 Operating Margin Rate Expanded 100 Basis Points To 14.2%
4Q'15 Diluted GAAP EPS Was $1.78, Up 30% From 4Q'14 As Solid Operational Performance Combined With Lower Tax, Share Count And Restructuring More Than Offset $50 Million Of Currency Headwinds
Expect 2016 Full Year Diluted EPS Of $6.00 To $6.20 On A GAAP Basis And Free Cash Flow Conversion Of Approximately 100%
4Q'15 Key Points:
Net sales for the quarter were $2.8 billion, down 5% versus prior year, as price (+1%) was more than offset by currency (-6%).
Gross margin rate for the quarter was 35.6%, up from prior year 35.2% as price, productivity, cost actions and commodity deflation more than offset unfavorable currency.
SG&A expenses were 21.5% of sales compared to 22.1% in 4Q'14 reflecting tight cost management.
Operating margin rate was 14.2% compared to 13.2% in 4Q'14, as actions to improve profitability more than offset $50 million of unfavorable currency.
Restructuring charges for the quarter were $3.7 million compared to $24.4 million in 4Q'14.
Tax rate was 12.7% compared to the 4Q'14 rate of 17.6% as a result of adjustments to tax positions relating to undistributed foreign earnings and the impact of certain net operating losses that have become realizable.
Average diluted shares outstanding for the quarter were 150.0 million versus 160.0 million a year ago, reflecting the impact of share actions.
Working capital turns for the quarter were 9.2 consistent with 4Q'14 as lower organic growth in the quarter constrained the potential for year over year working capital turns improvement.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented, "We are pleased with our full year financial results, having achieved 6% organic growth and 10% earnings per share growth amidst a very challenging operating environment. By maintaining our focus on innovation and controlling key operational levers such as price, cost and product mix, we delivered noteworthy operating leverage despite significant foreign currency headwinds. We concluded 2015 with a solid fourth quarter, expanding margins, generating significant free cash flow and posting positive organic growth in the face of ongoing weakness in some key markets.
"As we look forward, we believe we are well positioned to manage through a continued difficult environment by leveraging our world-class franchises and brands to deliver solid organic growth and strong free cash flow while maintaining our disciplined and shareholder friendly approach to capital allocation."
4Q'15 Segment Results
($ in M)
4Q'15 Segment Results
Sales
Profit
Profit
Rate
Tools & Storage
$1,831
$303.9
16.6%
Security
$538
$68.8
12.8%
Industrial
$477
$85.5
17.9%
Tools & Storage net sales decreased 3% versus 4Q'14 as volume (+2%) and price (+1%) were more than offset by unfavorable currency (-6%). All regions posted organic growth with North America +3%, Europe +6%, and the emerging markets +1%. The U.S. construction tool market remained healthy and new products and brand extensions generated share gains in North America despite downward pressure in the industrial channels and Canada. Solid commercial momentum continued in Europe as share gains from new products and an expanded retail footprint produced another quarter of above-market organic growth. Organic growth within the emerging markets remained positive reflecting the favorable impact of pricing and the continued success of our mid-price-point product releases amidst a series of challenging end markets, including Brazil, Russia and China. Overall Tools & Storage segment profit rate was 16.6%, up from the 4Q'14 rate of 16.0%, as volume leverage, price, productivity, cost management and lower commodity prices more than offset currency pressures.
Security net sales decreased 9% versus 4Q'14 as price (+1%) was more than offset by lower volumes (-5%) and currency (-5%). Higher installation revenues in a number of countries and a stable recurring revenue portfolio resulted in Europe posting organic growth of 3%, Europe's fifth consecutive quarter of flat or positive organic growth. Order rates in Europe were again strong, up double-digits, while recurring revenue attrition remained solidly within the target range of 10-12%. North America's organic revenues declined 6% due primarily to lower volumes within the commercial electronic security business as 4Q'14 benefited from a large retail installation. Similar to Europe, orders within the North American commercial electronic security business were strong. Emerging markets organic revenues declined due to the ongoing relatively weak market conditions in China. Overall Security segment profit rate was 12.8%, up 100 basis points versus prior year, primarily due to improved operating performance within Europe. The segment profit rate improved 90 basis points sequentially as a result of continued margin expansion within Europe and improved operating performance in the North America business.
Industrial net sales decreased 7% versus 4Q'14 as price (+1%) was more than offset by lower volumes (-2%) and currency (-6%). Engineered Fastening's organic revenues declined 3% as strong global automotive revenues were more than offset by lower electronics and industrial volumes. Infrastructure organic revenues were up 2% as increased Oil & Gas volumes from higher North American on-shore pipeline project activity more than offset lower Hydraulic Tools volumes due to a difficult scrap steel market. Overall Industrial segment profit rate was 17.9%, up 210 basis points from the 4Q'14 rate, as productivity gains and cost control, particularly within Engineered Fastening, more than offset the impacts of currency and lower Hydraulic Tools volumes.
President and Chief Operating Officer, James M. Loree, commented, "Our Tools & Storage team delivered 3% organic growth for the quarter, buoyed by continued strength within North American and European retail channels, despite tough comparables and significant headwinds from a weak industrial end market and within the emerging markets. With respect to the latter, the success of our mid-price point products combined with strong pricing actions allowed us to outperform underlying market growth. The 8% organic growth in Tools & Storage for the year is a testament to the strength and momentum of this world class franchise. Also noteworthy was Engineered Fastening's ability to drive outsized organic growth within automotive and generate margin expansion in the quarter despite overall lower volumes. Our Security business demonstrated another quarter of forward progress. Europe delivered positive organic growth, year-over-year margin improvement with margins approaching 10%, strong order rates and attrition at targeted levels for the quarter. Our focus within Security North America remains squarely on improving field productivity where we took another step forward in the quarter evidenced by sequential margin improvement."
2016 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, "2015 was a strong year in terms of operational execution and 2016 will require a similar effort as we expect continued challenging macroeconomic conditions. Maintaining our focus on operational excellence, and making smart investments to support organic growth while proactively mitigating significant currency headwinds position us to deliver approximately 3% organic growth and EPS of $6.00 - $6.20 (up approximately 3% at the mid-point) in 2016."
The following summarizes key 2016 planning assumptions:
Organic growth of approximately 3% (approximately +$0.45 to $0.50 EPS)
Commodity deflation, cost actions and productivity (approximately +$0.45 to $0.50 EPS)
Lower average share count, including approximately $300 million of share repurchases in 2016 (approximately +$0.13 EPS)
Foreign exchange headwinds of approximately $170 - $190 million (approximately - $0.85 to $0.95 EPS)
Restructuring charges and the tax rate will be relatively consistent with 2015 levels
Free cash flow conversion approximating 100%
Mr. Allan added, "Our 2016 outlook maintains the key elements from our three year financial outlook presented in May 2015, namely above market organic growth, operational efficiency, EPS expansion and improved cash flow return on investment, while incorporating today's global growth and foreign exchange outlook. In addition, we remain committed to our long-term capital allocation plan of returning approximately 50% of free cash flow to shareholders through dividends and opportunistic share repurchases and deploying the balance towards acquisitions."
The Company will host a conference call with investors today, January 28, 2016 at 8:00 am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for "SWK Investor Relations."
The call will be accessible by telephone within the U.S. at (877) 930-8285, from outside the U.S. at +1 (253) 336-8297, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 19339634. A replay will also be available two hours after the call and can be accessed at (855) 859-2056 or +1 (404) 537-3406 using the passcode 19339634. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Greg Waybright
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
(860) 827-3833
View photo
.Stanley Black & Decker. (PRNewsFoto/Stanley Black & Decker)
These results reflect the Company's continuing operations. In 4Q'14, the Company classified the results of the Security segment's Spain and Italy operations as held for sale based on management's intention to sell these operations. In July 2015, the Company completed the sale of these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 2014 and through the date of sale for 2015. In 3Q'13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses; these businesses were sold during 2014. The operating results of these businesses have been reported as discontinued operations through the date of sale for 2014. Total sales reported as discontinued operations were $39.4 million and $118.4 million for 2015 and 2014, respectively, and $25.2 million for 4Q'14.
In the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the legacy CDIY segment was renamed Tools & Storage. The Company recast segment net sales and profit for 2014 to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 4Q'15 and 4Q'14 is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of M&A-related payments and charges. Free cash flow conversion is defined as free cash flow divided by net income.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year 2016 EPS of $6.00 - $6.20 on a GAAP basis (including restructuring charges relatively consistent with 2015 levels); (ii) generate free cash flow conversion approximating 100%; (iii) improve the Company's cash flow return on investment; and (iv) over the long term, return approximately 50% of free cash flow to shareholders through dividends and opportunistic share repurchases while deploying the balance towards acquisitions (collectively, the "Results"); are "forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent, or based, upon: (i) the Company's ability to increase working capital turns during 2016; (ii) the Company's ability to deliver organic growth of approximately 3% in 2016; (iii) the Company's ability to generate approximately $0.45 to $0.50 of EPS through cost actions, commodity deflation and productivity; (iv) foreign exchange headwinds of approximately $170 - $190 million in 2016; (v) the Company's ability to achieve a tax rate relatively consistent with the 2015 tax rate; (vi) the Company's ability to keep restructuring charges relatively consistent with 2015 levels; (vii) the Company's ability to identify and close on appropriate acquisition opportunities within desired timeframes at reasonable cost; (viii) successful integration of existing and any newly acquired businesses and formation of new business platforms; (ix) the continued acceptance of technologies used in the Company's products and services; (x) the Company's ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xi) the Company's ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xii) the proceeds realized with respect to any business or product line disposals; (xiii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiv) the success of the Company's efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xv) the Company's ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvi) the Company's ability to generate free cash flow and maintain a strong debt to capital ratio; (xvii) the Company's ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xviii) the Company's ability to obtain favorable settlement of tax audits; (xix) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible, including realizing tax credit carry forward amounts within the allowable carry forward periods; (xx) the continued ability of the Company to access credit markets under satisfactory terms; (xxi) the Company's ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxii) the Company's ability to successfully develop, market and achieve sales from new products and services; and (xxiii) the availability of cash to complete approximately $300 million of share repurchases over the course of the year when conditions are right.
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi, Canadian Dollar, Euro, British Pound, Brazilian Real or other currency fluctuations; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia, China and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company's customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company's debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company's supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
$ 2,845.4
$ 2,982.5
$ 11,171.8
$ 11,338.6
COSTS AND EXPENSES
Cost of sales
1,831.2
1,931.4
7,099.8
7,235.9
Gross margin
1,014.2
1,051.1
4,072.0
4,102.7
% of Net Sales
35.6%
35.2%
36.4%
36.2%
Selling, general and administrative
610.6
658.3
2,486.4
2,595.9
% of Net Sales
21.5%
22.1%
22.3%
22.9%
Operating margin
403.6
392.8
1,585.6
1,506.8
% of Net Sales
14.2%
13.2%
14.2%
13.3%
Other - net
53.8
60.5
222.0
239.6
Restructuring charges
3.7
24.4
47.6
18.8
Income from operations
346.1
307.9
1,316.0
1,248.4
Interest - net
39.7
42.2
165.2
163.6
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
306.4
265.7
1,150.8
1,084.8
Income taxes on continuing operations
39.1
46.7
248.6
227.1
NET EARNINGS FROM CONTINUING OPERATIONS
267.3
219.0
902.2
857.7
Less: net earnings (loss) attributable to non-controlling interests
0.1
(0.3)
(1.6)
0.5
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS
267.2
219.3
903.8
857.2
NET LOSS FROM DISCONTINUED OPERATIONS
(1.7)
(73.5)
(20.1)
(96.3)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$ 265.5
$ 145.8
$ 883.7
$ 760.9
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.83
$ 1.41
$ 6.10
$ 5.49
Discontinued operations
(0.01)
(0.47)
(0.14)
(0.62)
Total basic earnings per share of common stock
$ 1.82
$ 0.94
$ 5.96
$ 4.87
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.78
$ 1.37
$ 5.92
$ 5.37
Discontinued operations
(0.01)
(0.46)
(0.13)
(0.60)
Total diluted earnings per share of common stock
$ 1.77
$ 0.91
$ 5.79
$ 4.76
DIVIDENDS PER SHARE
$ 0.55
$ 0.52
$ 2.14
$ 2.04
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
145,908
155,799
148,234
156,090
Diluted
150,020
160,013
152,706
159,737
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
January 2,
January 3,
2016
2015
ASSETS
Cash and cash equivalents
$ 465.4
$ 496.6
Accounts and notes receivable, net
1,331.8
1,396.7
Inventories, net
1,526.4
1,562.7
Assets held for sale
-
29.5
Other current assets
338.5
463.3
Total current assets
3,662.1
3,948.8
Property, plant and equipment, net
1,450.2
1,454.1
Goodwill and other intangibles, net
9,625.8
10,027.2
Other assets
570.4
419.0
Total assets
$ 15,308.5
$ 15,849.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 7.6
$ 7.5
Accounts payable
1,533.1
1,579.2
Accrued expenses
1,261.9
1,221.9
Liabilities held for sale
-
23.4
Total current liabilities
2,802.6
2,832.0
Long-term debt
3,836.6
3,839.8
Other long-term liabilities
2,810.1
2,665.4
Stanley Black & Decker, Inc. shareowners' equity
5,811.6
6,429.1
Non-controlling interests' equity
47.6
82.8
Total liabilities and equity
$ 15,308.5
$ 15,849.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
OPERATING ACTIVITIES
Net earnings from continuing operations
$ 267.3
$ 219.0
$ 902.2
$ 857.7
Net loss from discontinued operations
(1.7)
(73.5)
(20.1)
(96.3)
Depreciation and amortization
105.6
112.4
414.0
449.8
Changes in working capital1
503.5
433.2
(98.0)
(9.8)
Other
(46.5)
70.5
(15.8)
94.5
Net cash provided by operating activities
828.2
761.6
1,182.3
1,295.9
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(131.3)
(111.6)
(311.4)
(291.0)
Proceeds from issuances of common stock
79.5
20.3
163.5
71.3
Net short-term (repayments) borrowings
(449.6)
(424.8)
1.2
(391.0)
Net investment hedge settlements
25.5
3.6
137.7
(61.4)
Cash dividends on common stock
(80.7)
(80.8)
(319.9)
(321.3)
Purchases of common stock for treasury
(9.7)
(7.5)
(649.8)
(28.2)
Acquisitions, net of cash acquired
(33.6)
-
(51.1)
(3.2)
Payments on long-term debt
-
(45.7)
(16.1)
(46.6)
Effect of exchange rate changes on cash
(52.1)
(84.0)
(132.9)
(147.1)
Other
(4.1)
(21.3)
(34.7)
(77.0)
Net cash used in investing and financing activities
(656.1)
(751.8)
(1,213.5)
(1,295.5)
Increase (Decrease) in Cash and Cash Equivalents
172.1
9.8
(31.2)
0.4
Cash and Cash Equivalents, Beginning of Period
293.3
486.8
496.6
496.2
Cash and Cash Equivalents, End of Period
$ 465.4
$ 496.6
$ 465.4
$ 496.6
Free Cash Flow Computation2
Operating cash flow
$ 828.2
$ 761.6
$ 1,182.3
$ 1,295.9
Less: capital and software expenditures
(131.3)
(111.6)
(311.4)
(291.0)
Free cash flow (before dividends)
$ 696.9
$ 650.0
$ 870.9
$ 1,004.9
Merger & Acquisition-related charges and payments4
14.6
36.1
83.3
152.2
Free cash flow, normalized (before dividends)3
$ 711.5
$ 686.1
$ 954.2
$ 1,157.1
1
Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FOURTH QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
Tools & Storage
$ 1,830.9
$ 1,880.0
$ 7,140.7
$ 7,033.0
Security
538.0
589.9
2,092.9
2,261.2
Industrial
476.5
512.6
1,938.2
2,044.4
Total
$ 2,845.4
$ 2,982.5
$ 11,171.8
$ 11,338.6
SEGMENT PROFIT
Tools & Storage
$ 303.9
$ 300.6
$ 1,170.1
$ 1,074.4
Security
68.8
69.4
239.6
259.2
Industrial
85.5
80.9
339.9
350.6
Segment Profit
458.2
450.9
1,749.6
1,684.2
Corporate Overhead
(54.6)
(58.1)
(164.0)
(177.4)
Total
$ 403.6
$ 392.8
$ 1,585.6
$ 1,506.8
Segment Profit as a Percentage of Net Sales
Tools & Storage
16.6%
16.0%
16.4%
15.3%
Security
12.8%
11.8%
11.4%
11.5%
Industrial
17.9%
15.8%
17.5%
17.1%
Segment Profit
16.1%
15.1%
15.7%
14.9%
Corporate Overhead
(1.9%)
(1.9%)
(1.5%)
(1.6%)
Total
14.2%
13.2%
14.2%
13.3%
Drmicrocap
11年前
Stanley Black & Decker Reports 3Q 2015 Results
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PR Newswire
Stanley Black & Decker
October 22, 2015 6:00 AM
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NEW BRITAIN, Conn., Oct. 22, 2015 /PRNewswire/ -- Stanley Black & Decker (SWK) today announced third quarter 2015 financial results.
•3Q'15 Revenues Totaled $2.8 Billion, As Strong Organic Growth Of 6% Was More Than Offset By 8% Currency Impact
•3Q'15 Operating Margin Rate Expanded 70 Basis Points To A Post-Merger Record 14.8% Despite $70 Million Of Currency Headwinds
•3Q'15 Diluted GAAP EPS Was $1.55 Up 1% From 3Q'14 As Strong Operational Performance More Than Offset Tax And Restructuring Headwinds
•Raising 2015 Full Year GAAP EPS Guidance Range To $5.80 To $5.95, From $5.70 To $5.90, Up 8% To 11% Versus 2014
3Q'15 Key Points:
•Net sales for the period were $2.8 billion, down 2% versus prior year, as positive volume (+5%) and price (+1%) were more than offset by currency (-8%).
•Gross margin rate for the quarter was 36.3%, down slightly from the prior year rate of 36.4% as favorable volume leverage, price, productivity, cost actions and commodity deflation substantially offset unfavorable currency.
•SG&A expenses were 21.5% of sales compared to 22.3% in 3Q'14 reflecting volume leverage and cost control.
•Operating margin rate was 14.8% compared to 14.1% in 3Q'14, as actions to improve profitability and generate solid operating leverage more than offset significant unfavorable currency.
•Restructuring charges for the quarter were $14.0 million compared to a restructuring credit of $0.2 million in 3Q'14.
•Tax rate was 24.5% compared to the 3Q'14 rate of 19.1% as a result of higher U.S. vs. foreign earnings in the third quarter of 2015 compared to the prior year and the impact of statutory expirations on certain foreign tax positions in last year's third quarter.
•Average diluted shares outstanding for the quarter were 150.8 million versus 160.6 million a year ago, reflecting the cumulative impact of our recent share repurchase actions including approximately $200 million of opportunistic share repurchases during the quarter capitalizing on recent equity market declines.
•Working capital turns for the quarter were 6.4 compared to 6.5 for 3Q'14. Free cash flow for the quarter was $171 million versus $189 million for 3Q'14.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented, "We achieved continued share gains across much of the portfolio in the third quarter and remain on track to deliver strong organic growth for the year. This organic growth momentum, combined with a sharp focus on cost management and price realization, positions us to deliver meaningful margin expansion and 8-11% EPS growth in 2015 despite severe currency pressure and volatile economic conditions in a number of our markets.
"We continue to leverage our world-class franchises and brands to deliver substantial organic growth and margin expansion, while generating strong free cash flow and maintaining a shareholder friendly capital allocation approach. Although market conditions remain challenging in the near-term, we are confident that our agile leadership team, focus on execution and robust pipeline of innovative new products will enable us to continue our strong performance trend."
3Q'15 Segment Results
($ in M)
3Q'15 Segment Results
Sales
Profit
Profit
Rate
Tools & Storage
$1,838
$307.8
16.7%
Security
$512
$60.8
11.9%
Industrial
$479
$85.4
17.8%
•Tools & Storage net sales increased 2% versus 3Q'14 as volume (+8%) and price (+1%), more than offset unfavorable currency (-7%). Organic growth remained strong across all regions with North America +11%, Europe +7% and the emerging markets +6%. Share gains from innovative new products and brand extensions combined with a healthy underlying U.S. tool market continued to fuel growth in North America despite softness in Canada and industrial channels. Europe continued its above-market organic growth performance due to share gains from new products combined with leveraging an expanded retail footprint and solid commercial momentum in what remains a muted market. The continued roll out of our mid-price-point product offerings along with pricing actions fueled solid organic growth within the emerging markets, most notably in Latin America and portions of Asia, despite continuing pressure in Russia and China. Overall Tools & Storage segment profit rate was 16.7%, up from the 3Q'14 rate of 15.7%, as volume leverage, price, productivity, cost management and lower commodity prices more than offset significant currency pressures.
•Security net sales decreased 8% versus 3Q'14 as price (+1%) was more than offset by lower volumes (-2%) and currency (-7%). Positive momentum accelerated in Europe with organic growth of 4% led by higher installation revenues and broad-based growth throughout the region. Europe's order rates remained strong, up double-digits for the quarter, with recurring revenue attrition contained within the target range of 10-12%. Organic revenues within North America were flat as growth across the mechanical businesses was offset by lower volumes within the electronics business. Emerging markets organic revenues were lower due primarily to slowing market conditions in China. Overall Security segment profit rate was 11.9%, up 150 basis points from the 2Q'15 rate and 30 basis points lower than prior year. The sequential improvement in the rate reflects continued margin expansion within Europe and improved operating performance across the North America businesses.
•Industrial net sales decreased 7% versus 3Q'14 as price (+1%) was more than offset by lower volumes (-1%) and currency (-7%). Engineered Fastening achieved 3% organic growth as strong global automotive and electronics revenues more than offset weaker industrial volumes. As expected, Infrastructure organic revenues decreased 10% due to lower Oil & Gas volumes resulting from delayed or suspended onshore pipeline construction and reduced offshore activity, as well as lower Hydraulic Tools volume due to difficult scrap steel market conditions. Overall Industrial segment profit rate was 17.8%, up from the 3Q'14 rate of 17.7%, as favorable volume leverage from Engineered Fastening, productivity gains and cost control more than offset the impacts of currency and lower Infrastructure volumes.
President and Chief Operating Officer, James M. Loree, commented, "Our results for the quarter, in which we again generated organic growth at the high end of expectations, demonstrate that our commitment to delivering sustained, above-market organic growth is taking root. The Tools & Storage team delivered impressive organic growth of 9% overcoming tough comparables and a weaker industrial end market. Strength within Engineered Fastening's automotive and electronics markets was noteworthy as was our growth within the emerging markets where we are navigating through a volatile and challenging end market backdrop. The Company's operating margin performance for the quarter was also a highlight and another post-merger record.
"Security showed stable organic revenue with impressive strength in Europe, strong order rate trends, and sequential margin improvement – all encouraging signs that this business is on a solid improvement track. The commercial actions we have taken to drive growth in both North America and Europe are beginning to manifest themselves in order rates and backlog while efforts to improve Security's field efficiency and cost structure continue to progress."
Updated 2015 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, "We are raising the range of our 2015 EPS outlook to $5.80 to $5.95 from $5.70 to $5.90 on a GAAP basis and expect our free cash flow for 2015 to approach $1 billion reflecting the impact of strong organic growth on our working capital levels. Our revised 2015 EPS outlook reflects the impacts of a stronger operational performance combined with incremental commodity deflation which are expected to more than offset a slower growth outlook for the industrial portions of our businesses and slightly higher currency headwinds, now estimated to be closer to the high end of our prior range of $200 to $220 million.
"We continue to be encouraged by our operating results in 2015, most notably our organic growth and expanding margins despite dynamic market conditions in various geographies. We will maintain our operational agility in 2016 as we expect to face continued currency headwinds of approximately $100 million for the year. As always, we will seek to identify cost, commodity deflation and pricing opportunities to partially mitigate this impact and allow us to demonstrate reasonable earnings growth in 2016."
The Company will host a conference call with investors today, October 22, at 8:00 am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for "SWK Investor Relations".
The call will be accessible by telephone within the U.S. at (877) 930-8285, from outside the U.S. at +1 (253) 336-8297, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 49376260. A replay will also be available two hours after the call and can be accessed at (855) 859-2056 or +1 (404) 537-3406 using the passcode 49376260. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Greg Waybright
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
(860) 827-3833
These results reflect the Company's continuing operations. In 4Q'14, the Company classified the results of the Security segment's Spain and Italy operations as held for sale based on management's intention to sell these operations. In July 2015, the Company completed the sale of these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 3Q'15 through the date of the sale and 3Q'14. In 3Q'13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses; these businesses were sold during 2014. The operating results of these businesses have been reported as discontinued operations for 3Q'14. Total sales reported as discontinued operations were $3.9 million and $28.4 million for 3Q'15 and 3Q'14, respectively.
In the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the legacy CDIY segment was renamed Tools & Storage. The Company recast segment net sales and profit for 3Q'14 to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 3Q'15 and 3Q'14 is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year 2015 EPS of $5.80 - $5.95 on a GAAP basis (including $50 million or $0.25 EPS in restructuring charges); (ii) generate free cash flow approaching $1.0 billion for 2015; (iii) achieve meaningful margin expansion and 8-11% EPS growth in 2015; and (iv) maintain its operational agility and demonstrate reasonable earnings growth in 2016 (collectively, the "Results"); are "forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent, or based, upon: (i) the Company's ability to deliver sufficient working capital turns expansion to achieve free cash flow approaching $1 billion for 2015; (ii) the Company's ability to deliver organic growth of approximately 6% in 2015; (iii) the Company's ability to successfully execute upon indirect cost actions and to benefit from pricing opportunities and commodity deflation; (iv) foreign exchange headwinds being at the higher end of the $200-$220 million range at the end of 2015 and approximately $100 million in 2016; (v) the Company's ability to achieve a tax rate relatively consistent with the 2014 tax rate; (vi) the Company's ability to limit restructuring charges to approximately $50 million in 2015: (vii) successful integration of existing businesses and formation of new business platforms; (viii) the continued acceptance of technologies used in the Company's products and services; (ix) the Company's ability to manage existing Sonitrol franchisee and Mac Tools relationships; (x) the Company's ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xi) the proceeds realized with respect to any business or product line disposals; (xii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiii) the success of the Company's efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xiv) the Company's ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xv) the Company's ability to generate free cash flow and maintain a strong debt to capital ratio; (xvi) the Company's ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xvii) the Company's ability to obtain favorable settlement of tax audits; (xviii) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible, including realizing tax credit carry forward amounts within the allowable carry forward periods; (xix) the continued ability of the Company to access credit markets under satisfactory terms; (xx) the Company's ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxi) the Company's ability to successfully develop, market and achieve sales from new products and services; and (xxii) the availability of cash to repurchase shares when conditions are right.
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi, Canadian Dollar, Euro, British Pound, Brazilian Real or other currency fluctuations; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia, China and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company's customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company's debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company's supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
THIRD QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
$ 2,829.5
$ 2,878.9
$ 8,326.4
$ 8,356.1
COSTS AND EXPENSES
Cost of sales
1,802.5
1,832.3
5,268.6
5,304.5
Gross margin
1,027.0
1,046.6
3,057.8
3,051.6
% of Net Sales
36.3%
36.4%
36.7%
36.5%
Selling, general and administrative
608.3
641.1
1,875.8
1,937.6
% of Net Sales
21.5%
22.3%
22.5%
23.2%
Operating margin
418.7
405.5
1,182.0
1,114.0
% of Net Sales
14.8%
14.1%
14.2%
13.3%
Other - net
54.0
60.9
168.2
179.1
Restructuring charges (credits)
14.0
(0.2)
43.9
(5.6)
Income from operations
350.7
344.8
969.9
940.5
Interest - net
41.6
40.4
125.5
121.4
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
309.1
304.4
844.4
819.1
Income taxes on continuing operations
75.7
58.3
209.5
180.4
NET EARNINGS FROM CONTINUING OPERATIONS
233.4
246.1
634.9
638.7
Less: net (loss) earnings attributable to non-controlling interests
(0.7)
(0.3)
(1.7)
0.8
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS
234.1
246.4
636.6
637.9
NET LOSS FROM DISCONTINUED OPERATIONS
(5.4)
(9.7)
(18.4)
(22.8)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$ 228.7
$ 236.7
$ 618.2
$ 615.1
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.60
$ 1.57
$ 4.28
$ 4.08
Discontinued operations
(0.04)
(0.06)
(0.12)
(0.15)
Total basic earnings per share of common stock
$ 1.57
$ 1.51
$ 4.15
$ 3.94
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.55
$ 1.53
$ 4.15
$ 3.99
Discontinued operations
(0.04)
(0.06)
(0.12)
(0.14)
Total diluted earnings per share of common stock
$ 1.52
$ 1.47
$ 4.03
$ 3.85
DIVIDENDS PER SHARE
$ 0.55
$ 0.52
$ 1.59
$ 1.52
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
145,911
156,628
148,796
156,278
Diluted
150,781
160,582
153,405
159,755
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
October 3,
January 3,
2015
2015
ASSETS
Cash and cash equivalents
$ 293.3
$ 496.6
Accounts and notes receivable, net
1,690.9
1,396.7
Inventories, net
1,867.0
1,562.7
Assets held for sale
-
29.5
Other current assets
422.1
463.3
Total current assets
4,273.3
3,948.8
Property, plant and equipment, net
1,407.6
1,454.1
Goodwill and other intangibles, net
9,739.6
10,027.2
Other assets
450.4
419.0
Total assets
$ 15,870.9
$ 15,849.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 457.0
$ 7.5
Accounts payable
1,718.9
1,579.2
Accrued expenses
1,246.4
1,221.9
Liabilities held for sale
-
23.4
Total current liabilities
3,422.3
2,832.0
Long-term debt
3,847.3
3,839.8
Other long-term liabilities
2,880.7
2,665.4
Stanley Black & Decker, Inc. shareowners' equity
5,639.0
6,429.1
Non-controlling interests' equity
81.6
82.8
Total liabilities and equity
$ 15,870.9
$ 15,849.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
THIRD QUARTER
YEAR TO DATE
2015
2014
2015
2014
OPERATING ACTIVITIES
Net earnings from continuing operations
$ 233.4
$ 246.1
$ 634.9
$ 638.7
Net loss from discontinued operations
(5.4)
(9.7)
(18.4)
(22.8)
Depreciation and amortization
103.9
112.6
308.4
337.4
Changes in working capital1
(173.1)
(168.6)
(601.5)
(443.0)
Other
80.2
68.7
30.7
24.0
Net cash provided by operating activities
239.0
249.1
354.1
534.3
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(68.5)
(60.2)
(180.1)
(179.4)
Proceeds from issuances of common stock
9.3
23.4
84.0
51.0
Net short-term borrowings (repayments)
32.1
(48.8)
450.8
33.8
Net investment hedge settlements
48.3
(29.2)
112.2
(65.0)
Cash dividends on common stock
(79.7)
(81.4)
(239.2)
(240.5)
Purchases of common stock for treasury
(192.1)
(1.3)
(640.1)
(20.7)
Effect of exchange rate changes on cash
(38.7)
(66.3)
(80.8)
(63.1)
Other
(48.3)
(14.2)
(64.2)
(59.8)
Net cash used in investing and financing activities
(337.6)
(278.0)
(557.4)
(543.7)
Decrease in Cash and Cash Equivalents
(98.6)
(28.9)
(203.3)
(9.4)
Cash and Cash Equivalents, Beginning of Period
391.9
515.7
496.6
496.2
Cash and Cash Equivalents, End of Period
$ 293.3
$ 486.8
$ 293.3
$ 486.8
Free Cash Flow Computation2
Operating cash inflow
$ 239.0
$ 249.1
$ 354.1
$ 534.3
Less: capital and software expenditures
(68.5)
(60.2)
(180.1)
(179.4)
Free cash inflow (before dividends)
$ 170.5
$ 188.9
$ 174.0
$ 354.9
Merger & Acquisition-related charges and payments4
20.4
29.5
68.7
116.1
Free cash inflow, normalized (before dividends)3
$ 190.9
$ 218.4
$ 242.7
$ 471.0
1
Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
THIRD QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
Tools & Storage
$ 1,838.2
$ 1,806.4
$ 5,309.8
$ 5,153.0
Security
512.0
554.8
1,554.9
1,671.3
Industrial
479.3
517.7
1,461.7
1,531.8
Total
$ 2,829.5
$ 2,878.9
$ 8,326.4
$ 8,356.1
SEGMENT PROFIT
Tools & Storage
$ 307.8
$ 284.1
$ 866.2
$ 773.8
Security
60.8
67.6
170.8
189.8
Industrial
85.4
91.5
254.4
269.7
Segment Profit
454.0
443.2
1,291.4
1,233.3
Corporate Overhead
(35.3)
(37.7)
(109.4)
(119.3)
Total
$ 418.7
$ 405.5
$ 1,182.0
$ 1,114.0
Segment Profit as a Percentage of Net Sales
Tools & Storage
16.7%
15.7%
16.3%
15.0%
Security
11.9%
12.2%
11.0%
11.4%
Industrial
17.8%
17.7%
17.4%
17.6%
Segment Profit
16.0%
15.4%
15.5%
14.8%
Corporate Overhead
(1.2%)
(1.3%)
(1.3%)
(1.4%)
Total
14.8%
14.1%
14.2%
13.3%
Drmicrocap
11年前
Stanley Black & Decker Reports 2Q 2015 Results
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PR Newswire
Stanley Black & Decker
July 30, 2015 6:00 AM
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NEW BRITAIN, Conn., July 30, 2015 /PRNewswire/ -- Stanley Black & Decker (SWK) today announced second quarter 2015 financial results.
•2Q'15 Revenues Totaled $2.9 Billion, Flat To Prior Year, As Robust Organic Growth Of 8% Was Offset By An 8% Currency Impact
•2Q'15 Operating Margin Rate Expanded 70 Basis Points To A Post-Merger Record 14.4% Despite $50 Million Of Currency Headwinds
•2Q'15 Diluted GAAP EPS Was $1.54 Up 11% From 2Q'14 On Strong Operational Performance
•Raising 2015 Full Year GAAP EPS Guidance Range To $5.70 To $5.90 From $5.65 To $5.85, Up 6% To 10% Versus 2014, Despite $1.00 To $1.10 Per Share Of Foreign Currency EPS Pressure
2Q'15 Key Points:
•Net sales for the period were $2.9 billion, flat to prior year, as positive volume (+7%) and price (+1%) were offset by currency (-8%).
•Gross margin rate for the quarter was 36.9%, up 20 basis points from the prior year rate of 36.7% as a result of favorable volume leverage, price, productivity and cost actions which more than offset unfavorable currency.
•SG&A expenses were 22.5% of sales compared to 22.9% in 2Q'14 reflecting volume leverage and cost control.
•Operating margin rate was 14.4% up 70 basis points from 2Q'14, reflecting actions to improve profitability and generate solid operating leverage which more than offset unfavorable currency.
•Restructuring charges for the quarter were $5.0 million compared to a restructuring credit of $1.7 million in 2Q'14.
•Tax rate was 25.0% equal to the 2Q'14 rate.
•Average diluted shares outstanding for the quarter were 152.7 million versus 159.7 million a year ago, reflecting the cumulative impact of our recent share repurchase program, including the repurchase of approximately $100 million of shares during the quarter.
•Working capital turns for the quarter were 7.0, up 0.2 turns from 2Q'14. Free cash flow for the quarter was $247 million versus $376 million for 2Q'14 reflecting an increased level of working capital to support higher organic growth.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented, "Our results from the second quarter and first half of 2015, combined with our recently increased dividend, reflect the continued successful execution of the strategy we communicated at our Investor Day in May: leveraging our world-class franchises and brands to deliver substantial organic growth and margin expansion, while generating strong free cash flow and maintaining a shareholder friendly capital allocation program. Organic growth and operating leverage were strong across most of the business, innovation is robust, and the organization remains agile, giving us confidence in our ability to navigate the uncertain currency and macro conditions we expect to continue to face in the back half of this year, and positioning us to meet our updated full year financial commitments."
2Q'15 Segment Results
($ in M)
2Q'15 Segment Results
Sales
Profit
Profit
Rate
Tools & Storage
$1,840
$301.6
16.4%
Security
$533
$55.2
10.4%
Industrial
$494
$94.3
19.1%
•Tools & Storage net sales increased 4% versus 2Q'14 as volume (+10%) and price (+1%), were partially offset by currency (-7%). Organic growth was strong across the board with North America, Europe and emerging markets up 14%, 7% and 5%, respectively. North America, which posted its fourth consecutive quarter of double-digit organic growth, continued to benefit from healthy underlying tool demand, share gains from new products and brand extensions, along with a favorable outdoor season. Europe maintained its trend of strong organic growth as new products, an expanded retail footprint, and solid commercial momentum continued to generate share gains in many markets amid a challenged growth environment. Emerging markets organic growth resulted from mid-price-point product launches and pricing actions, most notably in Latin America, which offset steep declines in Russia and slow market conditions in China. Overall Tools & Storage segment profit rate was a post-merger record 16.4%, up from the 2Q'14 rate of 15.6%, as volume leverage, price, productivity and cost management more than offset currency pressures.
•Security net sales decreased 7% versus 2Q'14 as organic growth of 1%, driven by slightly positive volume and price, was significantly impacted by currency (-8%). Organic growth within North America & emerging markets ("NA & EM") was flat as organic growth across the NA businesses was offset by declines in EM due to a slow China market. Europe's organic growth accelerated in the quarter (+3%), as higher installation revenues led to the region's third consecutive quarter of flat or positive organic growth, with growth in all major countries. Order rates in Europe were also strong, up double digits for the quarter, with attrition remaining within the target range of 10-12%. Overall Security segment profit rate was 10.4%, 170 basis points below 2Q'14. The year-over-year decrease in the rate relates primarily to the impact of project mix within the NA electronics business and sluggish EM volumes which more than offset improved operating performance within Europe and the NA mechanical business.
In addition, the Company completed the sale of Security Europe's Spain and Italy operations in July. The results of these operations have been reported as discontinued operations beginning in 4Q'14.
•Industrial net sales decreased 4% versus 2Q'14 as volume (+3%) and price (+1%) were more than offset by currency (-8%). Engineered Fastening achieved 4% organic growth driven by strong global automotive and electronics revenues, which more than offset weaker North American industrial volumes. Infrastructure organic revenues increased 3% as higher Oil & Gas volume, which benefited from a large international equipment sale during the quarter, more than offset lower Hydraulic Tools volume due to difficult market dynamics related to scrap steel. Overall Industrial segment profit rate was 19.1%, up 140 basis points from the 2Q'14 rate of 17.7%, as favorable volume leverage from Engineered Fastening and Oil & Gas, productivity gains and cost control more than offset the impact from currency and lower Hydraulic Tools volume.
President and Chief Operating Officer, James M. Loree, commented, "Our second quarter represented the fourth successive quarter of organic growth at or above 6% -- a sign that our efforts to build a culture geared towards organic growth are gaining traction. This impressive growth was once again led by our Tools & Storage platform, which has averaged 10% organic growth over this time period, while emerging markets in total despite weakness in China and Engineered Fastening also showed strength.
"Security's top-line performance was solid and we are encouraged by order rate trends, which reflect the impact of commercial actions aimed at driving growth in both North America and Europe. We were particularly pleased with the organic growth and operating margin results in Europe, which continues to perform to expectations, as well as within the North America mechanical access business. Security's overall margin performance fell short of our expectations for the quarter, however, as we have previously communicated, the multi-year growth and margin rate recovery trajectory of this business will not necessarily be linear. We still believe Security will achieve its growth and profitability objectives and remain committed to completing our assessment of its strategic fit by the second half of 2016. "
Updated 2015 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, "We are raising the range of our 2015 EPS outlook to $5.70 to $5.90 from $5.65 to $5.85 on a GAAP basis. We are maintaining our free cash flow outlook of at least $1 billion, however, we are closely monitoring the relatively higher working capital levels experienced in the first half of the year to ensure our working capital is adequate to service the higher organic growth expectations, which could modestly pressure free cash flow. Our current 2015 EPS outlook reflects the strong first half performance and improved full-year organic outlook within Tools & Storage and to a lesser extent our Engineered Fastening business, combined with additional indirect cost actions which, in the aggregate, are expected to more than offset Security's slower improvement. It is also important to note that since the beginning of the fourth quarter of 2014 we have reduced our share count by the equivalent of ~$1 billion of shares utilizing a combination of cash as well as equity derivatives, achieving our share repurchase plan announced in late 2013.
"We are encouraged by our overall first half performance despite difficult currency and market conditions and remain confident that 2015 will be another step forward in achieving our 2018 financial objectives that we communicated in May."
The Company will host a conference call with investors today, July 30, at 8:00 am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for "SWK Investor Relations".
The call will be accessible by telephone within the U.S. at (877) 930-8285, from outside the U.S. at +1 (253) 336-8297, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 77039075. A replay will also be available two hours after the call and can be accessed at (855) 859-2056 or +1 (404) 537-3406 using the passcode 77039075. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact:
Greg Waybright
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
(860) 827-3833
These results reflect the Company's continuing operations. In 4Q'14, the Company classified the results of the Security segment's Spain and Italy operations as held for sale based on management's intention to sell these operations. In July 2015, the Company completed the sale of these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 2Q'15 and 2Q'14. In 3Q'13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses; these businesses were sold during 2014. The operating results of these businesses have been reported as discontinued operations for 2Q'14. Total sales reported as discontinued operations were $17.6 million and $33.4 million for 2Q'15 and 2Q'14, respectively.
In the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the legacy CDIY segment was renamed Tools & Storage. The Company recast segment net sales and profit for 2Q'14 to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 2Q'15 and 2Q'14 is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year 2015 EPS of $5.70 - $5.90 on a GAAP basis (including $50 million or $0.25 EPS in restructuring charges); (ii) generate free cash flow of at least $1.0 billion for 2015; (iii) maintain Security margin rates relatively flat to the prior year during 2015; and (iv) achieve its 2018 financial objectives as communicated at the Investor Day conference in May (collectively, the "Results"); are "forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent, or based, upon: (i) the Company's ability to deliver sufficient working capital turns expansion to achieve at least $1 billion of free cash flow for 2015; (ii) the Company's ability to deliver organic growth of approximately 6% (iii) the Company's ability to successfully execute upon indirect cost actions and to benefit from pricing and cost deflation; (iv) the Company's ability to sufficiently lower its average share count in 2015; (v) foreign exchange headwinds being approximately $200-$220 million in 2015; (vi) the Company's ability to achieve a tax rate relatively consistent with the 2014 tax rate; (vii) the Company's ability to limit restructuring charges to approximately $50 million in 2015: (viii) successful integration of acquisitions completed during the year, as well as integration of existing businesses and formation of new business platforms; (ix) the continued acceptance of technologies used in the Company's products and services; (x) the Company's ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xi) the Company's ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xii) the proceeds realized with respect to any business or product line disposals; (xiii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiv) the success of the Company's efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xv) the Company's ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvi) the Company's ability to generate free cash flow and maintain a strong debt to capital ratio; (xvii) the Company's ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xviii) the Company's ability to obtain favorable settlement of tax audits; (xix) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible, including realizing tax credit carry forward amounts within the allowable carry forward periods; (xx) the continued ability of the Company to access credit markets under satisfactory terms; (xxi) the Company's ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxii) the Company's ability to successfully develop, market and achieve sales from new products and services; and (xxiii) the availability of cash to repurchase shares when conditions are right.
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Euro, Canadian Dollar, Chinese Renminbi or other currency fluctuations; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company's customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company's debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company's supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
SECOND QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
$ 2,866.9
$ 2,860.1
$ 5,496.9
$ 5,477.2
COSTS AND EXPENSES
Cost of sales
1,809.7
1,811.5
3,466.1
3,472.2
Gross margin
1,057.2
1,048.6
2,030.8
2,005.0
% of Net Sales
36.9%
36.7%
36.9%
36.6%
Selling, general and administrative
644.5
655.9
1,267.5
1,296.5
% of Net Sales
22.5%
22.9%
23.1%
23.7%
Operating margin
412.7
392.7
763.3
708.5
% of Net Sales
14.4%
13.7%
13.9%
12.9%
Other - net
50.5
57.3
114.2
118.2
Restructuring charges (credits)
5.0
(1.7)
29.9
(5.4)
Income from operations
357.2
337.1
619.2
595.7
Interest - net
43.2
40.3
83.9
81.0
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
314.0
296.8
535.3
514.7
Income tax expense on continuing operations
78.5
74.1
133.8
122.1
NET EARNINGS FROM CONTINUING OPERATIONS
235.5
222.7
401.5
392.6
Less: net (loss) earnings attributable to non-controlling interests
(0.2)
0.9
(1.0)
1.1
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS
235.7
221.8
402.5
391.5
NET LOSS FROM DISCONTINUED OPERATIONS
(8.5)
(5.3)
(13.0)
(13.1)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$ 227.2
$ 216.5
$ 389.5
$ 378.4
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.59
$ 1.42
$ 2.68
$ 2.51
Discontinued operations
(0.06)
(0.03)
(0.09)
(0.08)
Total basic earnings per share of common stock
$ 1.53
$ 1.38
$ 2.59
$ 2.42
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.54
$ 1.39
$ 2.60
$ 2.46
Discontinued operations
(0.06)
(0.03)
(0.08)
(0.08)
Total diluted earnings per share of common stock
$ 1.49
$ 1.36
$ 2.51
$ 2.37
DIVIDENDS PER SHARE
$ 0.52
$ 0.50
$ 1.04
$ 1.00
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
148,059
156,316
150,339
156,097
Diluted
152,663
159,666
154,881
159,354
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
July 4,
January 3,
2015
2015
ASSETS
Cash and cash equivalents
$ 391.9
$ 496.6
Accounts and notes receivable, net
1,645.9
1,396.7
Inventories, net
1,839.6
1,562.7
Assets held for sale
19.1
29.5
Other current assets
448.3
463.3
Total current assets
4,344.8
3,948.8
Property, plant and equipment, net
1,419.2
1,454.1
Goodwill and other intangibles, net
9,798.7
10,027.2
Other assets
436.1
419.0
Total assets
$ 15,998.8
$ 15,849.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 440.5
$ 7.5
Accounts payable
1,764.6
1,579.2
Accrued expenses
1,158.9
1,221.9
Liabilities held for sale
21.0
23.4
Total current liabilities
3,385.0
2,832.0
Long-term debt
3,823.2
3,839.8
Other long-term liabilities
2,924.1
2,665.4
Stanley Black & Decker, Inc. shareowners' equity
5,784.2
6,429.1
Non-controlling interests' equity
82.3
82.8
Total liabilities and equity
$ 15,998.8
$ 15,849.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
SECOND QUARTER
YEAR TO DATE
2015
2014
2015
2014
OPERATING ACTIVITIES
Net earnings from continuing operations
$ 235.5
$ 222.7
$ 401.5
$ 392.6
Net loss from discontinued operations
(8.5)
(5.3)
(13.0)
(13.1)
Depreciation and amortization
102.0
114.4
204.5
224.8
Changes in working capital1
(50.5)
55.9
(428.4)
(274.4)
Other
34.1
49.5
(49.5)
(44.7)
Net cash provided by operating activities
312.6
437.2
115.1
285.2
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(65.7)
(61.4)
(111.6)
(119.2)
Proceeds from issuances of common stock
31.7
14.4
74.7
27.6
Net short-term (repayments) borrowings
(180.2)
(199.7)
418.7
82.6
Net investment hedge settlements
33.5
(29.5)
63.9
(35.8)
Cash dividends on common stock
(76.8)
(78.4)
(159.5)
(159.1)
Purchases of common stock for treasury
(100.0)
-
(448.0)
(19.4)
Effect of exchange rate changes on cash
3.5
10.3
(42.1)
3.2
Other
(2.2)
(9.8)
(15.9)
(45.6)
Net cash used in investing and financing activities
(356.2)
(354.1)
(219.8)
(265.7)
(Decrease) Increase in Cash and Cash Equivalents
(43.6)
83.1
(104.7)
19.5
Cash and Cash Equivalents, Beginning of Period
435.5
432.6
496.6
496.2
Cash and Cash Equivalents, End of Period
$ 391.9
$ 515.7
$ 391.9
$ 515.7
Free Cash Flow Computation2
Operating cash inflow
$ 312.6
$ 437.2
$ 115.1
$ 285.2
Less: capital and software expenditures
(65.7)
(61.4)
(111.6)
(119.2)
Free cash inflow (before dividends)
$ 246.9
$ 375.8
$ 3.5
$ 166.0
Merger & Acquisition-related charges and payments4
28.5
34.8
48.3
86.6
Free cash inflow, normalized (before dividends)3
$ 275.4
$ 410.6
$ 51.8
$ 252.6
1
Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
SECOND QUARTER
YEAR TO DATE
2015
2014
2015
2014
NET SALES
Tools & Storage
$ 1,839.5
$ 1,771.8
$ 3,471.6
$ 3,346.6
Security
533.3
571.6
1,042.9
1,116.5
Industrial
494.1
516.7
982.4
1,014.1
Total
$ 2,866.9
$ 2,860.1
$ 5,496.9
$ 5,477.2
SEGMENT PROFIT
Tools & Storage
$ 301.6
$ 276.9
$ 558.4
$ 489.7
Security
55.2
69.4
110.0
122.2
Industrial
94.3
91.5
169.0
178.2
Segment Profit
451.1
437.8
837.4
790.1
Corporate Overhead
(38.4)
(45.1)
(74.1)
(81.6)
Total
$ 412.7
$ 392.7
$ 763.3
$ 708.5
Segment Profit as a Percentage of Net Sales
Tools & Storage
16.4%
15.6%
16.1%
14.6%
Security
10.4%
12.1%
10.5%
10.9%
Industrial
19.1%
17.7%
17.2%
17.6%
Segment Profit
15.7%
15.3%
15.2%
14.4%
Corporate Overhead
(1.3%)
(1.6%)
(1.3%)
(1.5%)
Total
14.4%
13.7%
13.9%
12.9%
Drmicrocap
11年前
Stanley Black & Decker Reports 1Q 2015 Results
PR Newswire
Stanley Black & Decker
April 23, 2015 6:00 AM
NEW BRITAIN, Conn., April 23, 2015 /PRNewswire/ -- Stanley Black & Decker (SWK) today announced first quarter 2015 financial results.
•1Q'15 Revenues Increased 1% To $2.6 Billion; Robust Organic Growth Of 8% Mostly Offset By 7% Currency Impact
•1Q'15 Operating Margin Expanded 120 Basis Points To 13.3% Despite $50 Million Of Currency Headwinds
•1Q'15 Diluted GAAP EPS Was $1.07 Consistent With 1Q'14 As Strong Operational Performance Was Offset By Higher Planned Restructuring Charges And A Higher Tax Rate
•Executed Actions That Reduced Share Count By Approximately 8 Million Shares During The Quarter
•Reiterating 2015 Full Year GAAP EPS Guidance Range Of $5.65 To $5.85, Up 5% To 9%, Despite $60 To $70 Million ($0.30 To $0.35 Per Share) In New, Incremental Foreign Currency OM Pressure
•Year Over Year Currency-Related EPS Headwinds Included In Full Year Guidance Now Total $1.00 To $1.10 (19% To 20% Of Prior Year EPS)
•2015 Free Cash Flow Still Expected To Be At Least $1.0 Billion
1Q'15 Key Points:
•Net sales for the period were $2.6 billion, up 1% versus prior year, as positive volume (+7%) and price (+1%) were substantially offset by currency (-7%).
•Gross margin rate for the quarter was 37.0%, up 50 basis points from the prior year rate of 36.5% as a result of favorable volume, price, productivity and cost actions which more than offset unfavorable currency.
•SG&A expenses were 23.7% of sales compared to 24.5% in 1Q'14 reflecting volume leverage and cost control.
•Operating margin rate was 13.3% up 120 basis points from 1Q'14, reflecting actions to improve profitability and generate operating leverage which more than offset unfavorable currency.
•Restructuring charges for the quarter were $24.9 million compared to a restructuring credit of $3.7 million in 1Q'14.
•Tax rate was 25.0%, slightly higher than anticipated and 300 basis points higher than last year's rate due to the timing of certain tax benefits and earnings mix.
•Average diluted shares outstanding for the quarter were 156.5 million versus 160.0 million in 4Q'14 and 159.0 million a year ago, reflecting the impact of our share repurchase program.
•Working capital turns for the quarter were 6.6, up 0.6 turns from 1Q'14. Free cash flow for the quarter, in line with normal seasonality, was an outflow of $243 million versus an outflow of $210 million for 1Q'14.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented, "As we entered 2015, our annual objectives remained focused on delivering solid organic growth, meaningful operating leverage and strong free cash flow coupled with capital allocation actions designed to drive sustainable value for shareholders. We posted strong organic growth and operating leverage in our Tools & Storage and Engineered Fastening businesses in the face of a challenging currency environment, and continued to execute on our plan to improve operating performance in Security. Our long-term strategy and financial objectives remain intact, and we are well-positioned to meet our commitments for the balance of the year despite intensified currency headwinds and a continued volatile macro environment."
1Q'15 Segment Results
($ in M)
1Q'15 Segment Results
Sales
Profit
Profit
Rate
Tools & Storage
$1,632
$256.8
15.7%
Security
$510
$54.8
10.8%
Industrial
$488
$74.7
15.3%
•Tools & Storage net sales increased 3% versus 1Q'14 as volume (+9%) and price (+1%), were partially offset by currency (-7%). Organic growth was particularly strong in North America (+15%) and Europe (+9%). North America continued to benefit from healthy underlying tool demand across the construction and industrial channels as well as share gains from new products and brand extensions aided by strong execution at the customer level. Europe's trend of strong organic growth continued as new products, an expanded retail footprint and solid commercial momentum continued to generate share gains in many markets, in spite of a challenged overall economic recovery. Emerging markets organic growth was relatively flat, as strong growth from mid-price point product launches and pricing actions, most notably in Latin America, offset steep declines in Russia and softness in China. Overall segment profit rate was 15.7%, up from the 1Q'14 rate of 13.5%, as volume leverage, price, productivity and cost management more than offset currency pressures.
•Security net sales decreased 6% versus 1Q'14 as organic growth of 2% driven by volume (+1%) and price (+1%), was significantly impacted by currency (-8%). Organic growth within North America and emerging markets ("NA & EM") of 2% resulted from strong automatic doors revenues and improved performance in the NA commercial locks business which returned to growth after five quarters of organic declines. Europe's organic growth rate was 1%, the second consecutive quarter of flat or positive organic growth, led by higher installation revenues. Europe order rates were up 3% for the quarter with attrition remaining within the target range of 10-12%.
Overall Security segment profit rate was 10.8%, a 110 basis point increase from the 1Q'14 rate of 9.7%. The year-over-year improvement in the rate was due primarily to improved performance within Europe.
•Industrial net sales decreased 2% versus 1Q'14 as volume (+6%) was more than offset by currency (-8%). Engineered Fastening achieved double digit organic growth (+12%) driven by strong global automotive and electronics revenues. Infrastructure organic revenues declined 15% due to decreasing Oil & Gas revenues from delayed or suspended pipeline construction activity offset by modest growth within Hydraulic Tools. Overall Industrial segment profit rate was 15.3%, consistent with the prior quarter but down from the 1Q'14 rate of 17.4%, as lower Oil & Gas volumes and currency more than offset favorable volume leverage from Engineered Fastening, productivity gains and cost control.
President and Chief Operating Officer, James M. Loree, commented, "The first quarter of 2015 represented another strong quarter of organic growth and margin expansion for Stanley Black & Decker. The formation of our new Tools & Storage platform is proceeding as planned, with the larger and stronger business poised for long-term profitable growth. Our Engineered Fastening business maintained its impressive performance during the quarter and while emerging markets remain challenging, we continue to be optimistic about our ability to generate above market growth in these regions due to our prior investments in support of our mid-price point product launches.
"Security continues to perform to expectations, delivering positive organic revenue growth and an expanded operating margin rate versus the prior year. Our plans to exit Europe's Spain and Italy operations are proceeding on track, and this action, as well as the other global organizational and operational enhancements we have made, give us confidence in our ability to show both top and bottom line improvement as planned within Security during 2015."
Updated 2015 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, "We are maintaining our 2015 EPS outlook of $5.65 - $5.85 on a GAAP basis (including $50 million or $0.25 EPS, in restructuring charges) and our free cash flow outlook of at least $1 billion. Our current 2015 EPS outlook reflects the strong first quarter performance and improved organic growth outlook, which combined with an acceleration of planned share repurchases, are expected to offset the impact of the significant weakening of various foreign currencies versus the U.S. dollar. Specific to shares, since the beginning of the fourth quarter of 2014 we have reduced our share count by the equivalent of ~$900 million of shares utilizing $326 million of cash as well as equity derivatives, putting us well on our way to completing our share repurchase plan announced in late 2013. We are clearly encouraged by our first quarter performance despite difficult currency conditions and remain confident that 2015 will be another step forward in achieving our long-term financial objectives."
The Company will host a conference call with investors today, April 23, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for "SWK Investor Relations".
The call will be accessible by telephone at 1 (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3935-9357. A replay will also be available two hours after the call and can be accessed at 1 (888) 843-7419 or +1 (630) 652-3042 using the passcode 3935-9357#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
Contact: Greg Waybright
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
(860) 827-3833
..
View photo
.Stanley Black & Decker
These results reflect the Company's continuing operations. In 4Q'14, the Company classified the results of the Security segment's Spain and Italy operations as held for sale based on management's intention to sell these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 1Q'15 and 1Q'14. In 3Q'13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses; these businesses were sold during 2014. The operating results of these businesses have been reported as discontinued operations for 1Q'14. Total sales reported as discontinued operations were $17.9 million and $31.4 million for 1Q'15 and 1Q'14, respectively.
In the first quarter of 2015, the Company combined the Construction & Do-It-Yourself ("CDIY") business with certain complementary elements of the Industrial and Automotive Repair ("IAR") and Healthcare businesses (formerly part of the Industrial and Security segments, respectively) to form one Tools & Storage business. As a result of this change, the legacy CDIY segment was renamed Tools & Storage. The Company recast segment net sales and profit for 1Q'14 to align with this change in organizational structure. There is no impact to the consolidated financial statements of the Company as a result of this change.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 1Q'15 and 1Q'14 is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year 2015 EPS of $5.65 - $5.85 on a GAAP basis (including $50 million or $0.25 EPS in restructuring charges); (ii) generate free cash flow of at least $1.0 billion for 2015 ; and (iii) continue to show both top and bottom line improvement within Security during 2015; (collectively, the "Results"); are "forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent, or based, upon: (i) the Company's ability to capitalize on operational improvements in both Security Europe and North America as well as execute on its divestiture of Security's operations in Spain and Italy; (ii) the Company's ability to invest in its business strategically and focus on operational excellence to deliver organic growth of approximately 5% during 2015; (iii) the Company's ability to successfully execute upon cost actions within Security and other businesses and to benefit from pricing and commodity deflation; (iv) the Company's ability to sufficiently lower its average share count in 2015; (v) foreign exchange headwinds being approximately $200-220 million in 2015; (vi) the Company's ability to achieve a tax rate relatively consistent with the 2014 tax rate; (vii); the Company's ability to limit one-time restructuring charges to approximately $50 million in 2015; (viii) successful integration of acquisitions completed during the year, as well as integration of existing businesses and formation of new business platforms; (ix) the continued acceptance of technologies used in the Company's products and services; (x) the Company's ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xi) the Company's ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xii) the proceeds realized with respect to any business or product line disposals; (xiii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiv) the success of the Company's efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xv) the Company's ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvi) the Company's ability to generate free cash flow and maintain a strong debt to capital ratio; (xvii) the Company's ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xviii) the Company's ability to obtain favorable settlement of tax audits; (xix) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xx) the continued ability of the Company to access credit markets under satisfactory terms; (xxi) the Company's ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxii) the Company's ability to successfully develop, market and achieve sales from new products and services; and (xxiii) the availability of cash to repurchase shares when conditions are right.
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Euro, Canadian Dollar, Chinese Renminbi or other currency fluctuations; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company's customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company's debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company's supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FIRST QUARTER
2015
2014
NET SALES
$ 2,630.0
$ 2,617.1
COSTS AND EXPENSES
Cost of sales
1,656.4
1,660.7
Gross margin
973.6
956.4
% of Net Sales
37.0%
36.5%
Selling, general and administrative
623.0
640.6
% of Net Sales
23.7%
24.5%
Operating margin
350.6
315.8
% of Net Sales
13.3%
12.1%
Other - net
63.7
60.9
Restructuring charges (credits)
24.9
(3.7)
Income from operations
262.0
258.6
Interest - net
40.7
40.7
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
221.3
217.9
Income tax expense on continuing operations
55.3
48.0
NET EARNINGS FROM CONTINUING OPERATIONS
166.0
169.9
Less: net (loss) earnings attributable to non-controlling interests
(0.8)
0.2
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS
166.8
169.7
NET LOSS FROM DISCONTINUED OPERATIONS
(4.5)
(7.8)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$ 162.3
$ 161.9
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.10
$ 1.09
Discontinued operations
(0.03)
(0.05)
Total basic earnings per share of common stock
$ 1.07
$ 1.04
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$ 1.07
$ 1.07
Discontinued operations
(0.03)
(0.05)
Total diluted earnings per share of common stock
$ 1.04
$ 1.02
DIVIDENDS PER SHARE
$ 0.52
$ 0.50
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
152,172
155,905
Diluted
156,537
158,951
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
April 4,
January 3,
2015
2015
ASSETS
Cash and cash equivalents
$ 435.5
$ 496.6
Accounts and notes receivable, net
1,612.8
1,396.7
Inventories, net
1,742.2
1,562.7
Assets held for sale
24.9
29.5
Other current assets
509.3
463.3
Total current assets
4,324.7
3,948.8
Property, plant and equipment, net
1,411.5
1,454.1
Goodwill and other intangibles, net
9,788.6
10,027.2
Other assets
418.9
419.0
Total assets
$ 15,943.7
$ 15,849.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings
$ 606.2
$ 7.5
Accounts payable
1,674.8
1,579.2
Accrued expenses
1,144.2
1,221.9
Liabilities held for sale
21.6
23.4
Total current liabilities
3,446.8
2,832.0
Long-term debt
3,855.7
3,839.8
Other long-term liabilities
2,944.0
2,665.4
Stanley Black & Decker, Inc. shareowners' equity
5,615.2
6,429.1
Non-controlling interests' equity
82.0
82.8
Total liabilities and equity
$ 15,943.7
$ 15,849.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FIRST QUARTER
2015
2014
OPERATING ACTIVITIES
Net earnings from continuing operations
$ 166.0
$ 169.9
Net loss from discontinued operations
(4.5)
(7.8)
Depreciation and amortization
102.5
110.4
Changes in working capital1
(377.9)
(330.3)
Other
(83.6)
(94.2)
Net cash used in operating activities
(197.5)
(152.0)
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(45.9)
(57.8)
Proceeds from issuances of common stock
43.0
13.2
Net short-term borrowings
598.9
282.3
Net investment hedge settlements
30.4
(6.3)
Cash dividends on common stock
(82.7)
(80.7)
Purchases of common stock for treasury
(348.0)
(19.4)
Effect of exchange rate changes on cash
(45.6)
(7.1)
Other
(13.7)
(35.8)
Net cash provided by investing and financing activities
136.4
88.4
Decrease in Cash and Cash Equivalents
(61.1)
(63.6)
Cash and Cash Equivalents, Beginning of Period
496.6
496.2
Cash and Cash Equivalents, End of Period
$ 435.5
$ 432.6
Free Cash Flow Computation2
Operating cash outflow
$ (197.5)
$ (152.0)
Less: Capital and software expenditures
(45.9)
(57.8)
Free cash outflow (before dividends)
$ (243.4)
$ (209.8)
Merger & Acquisition-related charges and payments4
19.8
51.8
Free cash outflow, normalized (before dividends)3
$ (223.6)
$ (158.0)
1
The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company's common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FIRST QUARTER
2015
2014
NET SALES
Tools & Storage
$ 1,632.1
$ 1,574.8
Security
509.6
544.9
Industrial
488.3
497.4
Total
$ 2,630.0
$ 2,617.1
SEGMENT PROFIT
Tools & Storage
$ 256.8
$ 212.8
Security
54.8
52.8
Industrial
74.7
86.7
Segment Profit
386.3
352.3
Corporate Overhead
(35.7)
(36.5)
Total
$ 350.6
$ 315.8
Segment Profit as a Percentage of Net Sales
Tools & Storage
15.7%
13.5%
Security
10.8%
9.7%
Industrial
15.3%
17.4%
Segment Profit
14.7%
13.5%
Corporate Overhead
(1.4%)
(1.4%)
Total
13.3%
12.1%
Drmicrocap
11年前
Stanley Black & Decker Reports 4Q And Full Year 2014 Results
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Business Wire
Stanley Black & Decker
January 29, 2015 6:00 AM
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NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker (SWK) today announced fourth quarter and full year 2014 financial results.
• 4Q’14 Revenues Increased 3% To $3.0 Billion; Organic Growth Of 7%
• 4Q’14 Operating Margin Expanded 170 Basis Points To 13.2%; Excluding Charges, Operating Margin Expanded 50 Basis Points To 13.7%
• 4Q’14 Diluted GAAP EPS Was $1.37; Excluding Charges, 4Q’14 Diluted EPS Was $1.56
• Full Year Revenues Increased 4% to $11.3 Billion; Organic Growth Of 5%
• Full Year Operating Margin Expanded 220 Basis Points To 13.3%; Excluding Charges, Operating Margin Expanded 90 Basis Points To 13.6%
• Full Year Diluted GAAP EPS Was $5.37; Excluding Charges, Diluted EPS Was $5.67
• 2014 Free Cash Flow Record Of $1.0 Billion; Working Capital Turns Reached 9.2
• Expect 2015 Full Year EPS Of $5.65 To $5.85 On A GAAP Basis (Inclusive Of $0.25 In Restructuring Charges) And Free Cash Flow Of At Least $1.0 Billion
4Q’14 Key Points:
• Net sales for the period were $3.0 billion, up 3% versus the prior year, primarily attributable to volume (+6%) and price (+1%), partially offset by currency (-4%).
• The gross margin rate for the quarter was 35.2%. Excluding charges the gross margin rate was 35.3%, down 50 basis points from the prior year rate of 35.8%, as favorable volume, price, productivity and cost actions were more than offset by unfavorable currency and lower Security margins.
• SG&A expenses were 22.1% of sales. Excluding charges, SG&A expenses were 21.6% of sales, compared to 22.6% in 4Q’13.
• Operating margin rate was 13.2%. Excluding charges, operating margin rate was 13.7%, up 50 basis points from 4Q’13, as actions taken to improve profitability and generate operating leverage more than offset unfavorable currency.
• The tax rate was 17.6%. Excluding charges, the tax rate was 18.3%, 360 basis points lower than last year’s rate due primarily to the favorable shift of earnings to lower taxed jurisdictions, the passage of U.S. tax legislation and settlement of various income tax audits in the fourth quarter.
• Working capital turns for the quarter were 9.2, up 1.1 turns from 4Q’13. Free cash flow for the quarter was $636 million consistent with 4Q’13.
Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We were very pleased with our performance in the fourth quarter and for the full year. Our commitment to well balanced capital allocation priorities combined with our focus on key operational levers produced favorable organic growth, operating leverage and free cash flow results despite adverse currency and volatile macro environments.
“As we look to 2015 we continue to enjoy strong operating momentum amidst similar operating conditions and, as a consequence, are well positioned to manage through another challenging environment. Our long-term strategy and financial objectives remain intact, and we are confident in our ability to continue to generate strong underlying organic revenue, earnings and cash flow growth while producing meaningful returns for shareholders.”
4Q’14 Segment Results
($ in M) 4Q' 14 Segment Results
Sales Profit Charges1 Profit
Ex-Charges1
Profit Rate Profit Rate
Ex-Charges1
CDIY $1,496 $244.5 $0.3 $244.8 16.3% 16.4%
Industrial $891 $136.7 $2.2 $138.9 15.3% 15.6%
Security $595 $69.7 $3.1 $72.8 11.7% 12.2%
1 See Merger And Acquisition (M&A) One-Time Charges On Page 5
• CDIY net sales increased 7% versus 4Q’13 as a result of volume (+10%) and price (+1%), partially offset by currency (-4%). Organic growth was strong in all regions led by North America (+14%). North America realized share gains and benefitted from continued brisk underlying tool demand across all channels driven primarily by new products and a robust holiday sell-in and sell-through season. Europe (+7%) maintained its trend of strong organic growth as new products and an expanded retail footprint continued to generate market share gains, in spite of a challenged economic backdrop. Organic growth accelerated within the emerging markets (+7%) led by Latin America, despite persistently volatile economic conditions across all emerging markets. Excluding charges, overall segment profit rate was 16.4%, up from the 4Q’13 rate of 14.8%, as volume leverage, price, productivity and cost management more than offset currency pressures.
• Industrial net sales increased 1% versus 4Q’13 as a result of volume (+5%) and modestly positive price, partially offset by currency (-4%). Engineered Fastening achieved 10% organic growth driven by both strong global automotive and electronic revenues. Organic sales for the Industrial and Automotive Repair (“IAR”) business were up 5% with solid performances in both the North American and European tools businesses. Infrastructure organic growth was down 10% as strong hydraulic tools growth was negated by lower oil & gas revenues due to the recent contraction in oil prices and resulting slowdown in pipeline construction. Overall Industrial segment profit rate excluding charges was 15.6%, relatively consistent with the 4Q’13 rate of 15.8%, reflecting favorable volume leverage, productivity gains and cost control, offset by currency.
• Security net sales decreased 1% versus 4Q’13 as organic growth of 3% driven by volume (+2%) and price (+1%), was offset by currency (-4%). Organic growth within North America and emerging markets (“NA & EM”) of 5% was primarily a result of strong performances within the commercial electronics and automatic doors businesses. Europe’s organic growth rate was flat, a significant improvement versus prior quarters. Europe order rates were up mid-single digits for the quarter with attrition rates for the year stabilized within the target range of 10-12%.
Overall Security segment profit rate excluding charges was 12.2%, a slight increase from the 3Q’14 rate of 12.1% and down 80 basis points from the 4Q’13 rate of 13.0%. The year-over-year decrease in Security’s segment rate for the quarter resulted primarily from the expected temporary project mix impact within North America which more than offset a 110 basis point improvement within Europe. The Security segment profit rate excluding charges for the full year of 11.7% was flat with the prior year.
President and Chief Operating Officer, James M. Loree, commented, “The fourth quarter represented another solid quarter of organic growth, margin expansion and cash flow generation for the Company. Our CDIY and Industrial segments maintained their impressive performance for the year from both an organic growth and operating leverage perspective, led by developed markets, while growth in the emerging markets continued to outpace the underlying volatile and slowing markets due in large part to the initial successes of our mid-price point product launches.
“We continued to see positive signs within the European Security business as its operating margin rate, which improved sequentially and increased 110 basis points above the prior year, and order growth met expectations for the quarter. Additionally, in the fourth quarter we announced our decision to divest Security’s operations in Spain and Italy, allowing us to focus our efforts on the regions with stronger structural characteristics and thus the highest growth and margin potential. The combination of this action and other operational improvements in both Europe and North America, give us confidence that we can continue to show both top and bottom line improvement within Security during 2015.”
2015 Outlook
Donald Allan Jr., Senior Vice President and CFO, commented, “In 2015 we expect to build off the momentum we generated during 2014 towards achieving our long-term financial objectives. Investing in our business strategically and focusing on operational excellence will position us to deliver organic growth of approximately 3-4% during 2015 in a continuously challenging global macroeconomic climate and drive operating leverage, resulting in 2015 EPS of $5.65 - $5.85 on a GAAP basis which includes $50 million or $0.25 EPS in restructuring charges.
“We have made the decision to provide our guidance for 2015 on a GAAP basis given the significant reduction in annual restructuring and other one-time charges, which were more pronounced in prior years due to sizable M&A activity during 2010 - 2013.”
The following summarizes the key 2015 planning assumptions:
• Organic growth of approximately 3-4% (approximately +$0.45 - $0.55)
• Cost actions within Security and other businesses, pricing and commodity deflation (approximately +$0.50)
• Lower average share count due to repurchases of shares weighted to the second half of 2015 (approximately +$0.09 - $0.12)
• Foreign exchange headwinds of approximately $140 million (approximately - $0.70 - $0.75)
• The tax rate will be relatively consistent with the 2014 rate
• Free cash flow is expected to be at least $1 billion
Mr. Allan added, “We also remain committed to our near-term capital allocation plan of modest debt deleveraging, completed at the end of 2014, reducing our share count by the equivalent of approximately $1 billion of shares and supporting a strong and growing dividend. These actions combined with our near-term operational improvements are expected to result in continued improvement to our cash flow return on investment during 2015.”
Merger And Acquisition (M&A) One-Time Charges
4Q’14: Total one-time charges in 4Q’14 of $39.9 million primarily relate to integration and consulting costs. Gross margin includes $0.3 million of these one-time charges while SG&A includes $14.1 million. $5.6 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. Also included in one-time charges are $1.1 million in Other, net as well as $24.4 million in net Restructuring charges.
2014: Total one-time charges in 2014 of $53.9 million primarily relate to integration and consulting costs. Gross margin includes $1.8 million of these one-time charges while SG&A includes $31.6 million. $14.7 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. Also included in one-time charges are $1.7 million in Other, net as well as $18.8 million in net Restructuring charges.
The Company will host a conference call with investors today, Thursday, January 29, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for “SWK Investor Relations”.
The call will be accessible by telephone at 1 (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3868-1018. A replay will also be available two hours after the call and can be accessed at 1 (888) 843-7419 or +1 (630) 652-3042 using the passcode 3868-1018#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
These results reflect the Company’s continuing operations. In 4Q’14, the Company classified the results of the Security segment’s Spain and Italy operations as held for sale based on management’s intention to sell these operations. The operating results of Security Spain and Italy have been reported as discontinued operations for 2014 and 2013. In 3Q’13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses. The businesses within the Security and Industrial segments were sold during 2014. The operating results of these businesses, including the related losses on sale, have been reported as discontinued operations for 2013 and through the date of sale for 2014. Total sales reported as discontinued operations were $25.2 million and $34.8 million for 4Q’14 and 4Q’13, respectively, and $118.4 million and $150.1 million for 2014 and 2013, respectively.
The Company recast 2013 segment net sales and profit between the CDIY and Industrial segments to align reporting with the current management of the Company’s operations in the emerging markets to be comparable with the current year presentation. There is no impact to the consolidated financial statements of the Company as a result of this segment realignment.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. The normalized statement of operations and business segment information, as reconciled to GAAP on pages 13 to 16 for 2014 and 2013, are considered relevant to aid analysis of the Company’s operating performance and earnings results aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, the Niscayah and Infastech acquisitions and other smaller acquisitions of the Company. Normalized free cash flow, as reconciled from the associated GAAP measures on page 11 for 2014 and 2013 is considered a meaningful pro forma metric to aid the understanding of the Company’s cash flow performance aside from the material impact of the M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company’s ability to: (i) achieve full year 2015 EPS of $5.65 - $5.85 on a GAAP basis (including $50 million or $0.25 EPS in restructuring charges); (ii) generate free cash flow of at least $1.0 billion for 2015 ; (iii) continue to show both top and bottom line improvement within Security during 2015; (iv) reduce its share count by the equivalent of approximately $1.0 billion of shares and support a strong and growing dividend; and (v) improve our cash flow return on investment through 2015 (collectively, the “Results”); are “forward looking statements” and subject to risk and uncertainty.
The Company’s ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company’s Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company’s other filings with the Securities and Exchange Commission, and those set forth below.
The Company’s ability to deliver the Results is dependent, or based, upon: (i) the Company’s ability to capitalize on operational improvements in both Security Europe and North America as well as execute on its divestiture of Security’s operations in Spain and Italy; (ii) the Company’s ability to invest in its business strategically and focus on operational excellence to deliver organic growth of approximately 3-4% ( approximately $0.45 - $0.55) during 2015; (iii) the Company’s ability to execute upon cost actions within Security and other businesses and to benefit from pricing and commodity deflation (approximately +$0.50); (iv) the Company’s ability to lower average share count due to repurchases of shares mostly in the second half of 2015 (approximately +$0.09 - $0.12); (v) foreign exchange headwinds being approximately $140 million (approximately - $0.70 - $0.75) in 2015; (vi) the Company’s ability to achieve a tax rate relatively consistent with the 2014 tax rate; (vii); the Company’s ability to limit one-time restructuring charges to approximately $50 million in 2015; (viii) successful integration of acquisitions completed during the year, as well as integration of existing businesses; (ix) the continued acceptance of technologies used in the Company’s products and services; (x) the Company’s ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xi) the Company’s ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xii) the proceeds realized with respect to any business or product line disposals; (xiii) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xiv) the success of the Company’s efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xv) the Company’s ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvi) the Company’s ability to generate free cash flow and maintain a strong debt to capital ratio; (xvii) the Company’s ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xviii) the Company’s ability to obtain favorable settlement of tax audits; (xix) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xx) the continued ability of the Company to access credit markets under satisfactory terms; (xxi) the Company’s ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxii) the Company’s ability to successfully develop, market and achieve sales from new products and services; and (xxiii) the availability of cash to repurchase shares when conditions are right.
The Company’s ability to deliver the Results is also dependent upon: (i) the success of the Company’s marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company’s manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company’s ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company’s efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Euro, Canadian Dollar, Chinese Renminbi or other currency fluctuations; (vi) the geographic distribution of the Company’s earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company’s ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company’s customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company’s debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company’s supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER YEAR TO DATE
2014 2013 2014 2013
NET SALES $ 2,982.5 $ 2,880.6 $ 11,338.6 $ 10,889.5
COSTS AND EXPENSES
Cost of sales 1,931.4 1,853.8 7,235.9 6,985.8
Gross margin 1,051.1 1,026.8 4,102.7 3,903.7
% of Net Sales 35.2 % 35.6 % 36.2 % 35.8 %
Selling, general and administrative 658.3 696.9 2,595.9 2,690.6
% of Net Sales 22.1 % 24.2 % 22.9 % 24.7 %
Operating margin 392.8 329.9 1,506.8 1,213.1
% of Net Sales 13.2 % 11.5 % 13.3 % 11.1 %
Other - net 60.5 98.2 239.6 304.5
Restructuring charges 24.4 133.2 18.8 173.7
Income from operations 307.9 98.5 1,248.4 734.9
Interest - net 42.2 38.3 163.6 147.3
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 265.7 60.2 1,084.8 587.6
Income tax expense (benefit) on continuing operations 46.7 (10.2 ) 227.1 68.6
NET EARNINGS FROM CONTINUING OPERATIONS 219.0 70.4 857.7 519.0
Less: net (loss) earnings attributable to non-controlling interests (0.3 ) (0.1 ) 0.5 (1.0 )
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS 219.3 70.5 857.2 520.0
NET LOSS FROM DISCONTINUED OPERATIONS (73.5 ) (14.4 ) (96.3 ) (29.7 )
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS $ 145.8 $ 56.1 $ 760.9 $ 490.3
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.41 $ 0.45 $ 5.49 $ 3.35
Discontinued operations (0.47 ) (0.09 ) (0.62 ) (0.19 )
Total basic earnings per share of common stock $ 0.94 $ 0.36 $ 4.87 $ 3.16
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.37 $ 0.44 $ 5.37 $ 3.28
Discontinued operations (0.46 ) (0.09 ) (0.60 ) (0.19 )
Total diluted earnings per share of common stock $ 0.91 $ 0.35 $ 4.76 $ 3.09
DIVIDENDS PER SHARE $ 0.52 $ 0.50 $ 2.04 $ 1.98
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 155,799 155,512 156,090 155,237
Diluted 160,013 159,200 159,737 158,776
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
January 3,
December 28,
2015 2013
ASSETS
Cash and cash equivalents $ 496.6 $ 496.2
Accounts and notes receivable, net 1,396.7 1,578.5
Inventories, net 1,562.7 1,473.3
Assets held for sale 29.5 136.9
Other current assets 463.3 331.7
Total current assets 3,948.8 4,016.6
Property, plant and equipment, net 1,454.1 1,478.6
Goodwill and other intangibles, net 10,027.2 10,600.0
Other assets 114.6 439.9
Total assets $ 15,544.7 $ 16,535.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $ 7.5 $ 402.6
Accounts payable 1,579.2 1,552.9
Accrued expenses 1,221.9 1,219.5
Liabilities held for sale 23.4 61.0
Total current liabilities 2,832.0 3,236.0
Long-term debt 3,839.8 3,799.4
Other long-term liabilities 2,343.8 2,619.2
Stanley Black & Decker, Inc. shareowners' equity 6,446.3 6,799.2
Non-controlling interests' equity 82.8 81.3
Total liabilities and equity $ 15,544.7 $ 16,535.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2014 2013 2014 2013
OPERATING ACTIVITIES
Net earnings from continuing operations $ 219.0 $ 70.4 $ 857.7 $ 519.0
Net loss from discontinued operations (73.5 ) (14.4 ) (96.3 ) (29.7 )
Depreciation and amortization 112.4 118.6 449.8 441.3
Changes in working capital1 433.2 384.9 (9.8 ) 13.3
Other 56.2 172.2 80.2 (75.9 )
Net cash provided by operating activities 747.3 731.7 1,281.6 868.0
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (111.6 ) (95.0 ) (291.0 ) (340.3 )
(Payments) proceeds from sales of businesses / assets (1.3 ) 1.0 11.5 97.5
Acquisitions, net of cash acquired - (7.3 ) (3.2 ) (933.9 )
Premium paid on debt extinguishment - (42.8 ) - (42.8 )
Proceeds from long-term borrowings - 726.7 - 726.7
Proceeds from issuances of common stock 34.6 15.9 85.6 154.6
Net short-term (repayments) borrowings (424.8 ) (810.8 ) (391.0 ) 388.7
Net investment hedge settlements 3.6 (3.4 ) (61.4 ) 3.6
Cash dividends on common stock (80.8 ) (77.7 ) (321.3 ) (312.7 )
Purchases of common stock for treasury (7.5 ) (6.6 ) (28.2 ) (39.2 )
Premium paid for equity option - (83.2 ) - (83.2 )
Payment on long-term debt (45.7 ) (300.5 ) (46.6 ) (302.2 )
Payment on forward share purchase contract - - - (350.0 )
Effect of exchange rate changes on cash (84.0 ) (11.6 ) (147.1 ) (44.9 )
Other (20.0 ) (9.3 ) (88.5 ) (9.7 )
Net cash used in investing and financing activities (737.5 ) (704.6 ) (1,281.2 ) (1,087.8 )
Increase (Decrease) in Cash and Cash Equivalents 9.8 27.1 0.4 (219.8 )
Cash and Cash Equivalents, Beginning of Period 486.8 469.1 496.2 716.0
Cash and Cash Equivalents, End of Period $ 496.6 $ 496.2 $ 496.6 $ 496.2
Free Cash Flow Computation2
Operating cash inflow $ 747.3 $ 731.7 $ 1,281.6 $ 868.0
Less: capital and software expenditures (111.6 ) (95.0 ) (291.0 ) (340.3 )
Free cash inflow (before dividends) $ 635.7 $ 636.7 $ 990.6 $ 527.7
Merger & Acquisition-related charges and payments4 36.1 69.4 152.2 351.7
Free cash inflow, normalized (before dividends)3 $ 671.8 $ 706.1 $ 1,142.8 $ 879.4
1
The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important
measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include
deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions,
among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the
understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4
Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions,
including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2014 2013 2014 2013
NET SALES
Construction & DIY $ 1,496.4 $ 1,397.4 $ 5,559.3 $ 5,271.4
Industrial 891.4 881.3 3,498.8 3,302.6
Security 594.7 601.9 2,280.5 2,315.5
Total $ 2,982.5 $ 2,880.6 $ 11,338.6 $ 10,889.5
SEGMENT PROFIT
Construction & DIY $ 244.5 $ 202.8 $ 871.5 $ 777.1
Industrial 136.7 135.1 553.5 456.7
Security 69.7 66.8 259.2 233.3
Segment Profit 450.9 404.7 1,684.2 1,467.1
Corporate Overhead (58.1 ) (74.8 ) (177.4 ) (254.0 )
Total $ 392.8 $ 329.9 $ 1,506.8 $ 1,213.1
Segment Profit as a Percentage of Net Sales
Construction & DIY 16.3 % 14.5 % 15.7 % 14.7 %
Industrial 15.3 % 15.3 % 15.8 % 13.8 %
Security 11.7 % 11.1 % 11.4 % 10.1 %
Segment Profit 15.1 % 14.0 % 14.9 % 13.5 %
Corporate Overhead (1.9 %) (2.6 %) (1.6 %) (2.3 %)
Total 13.2 % 11.5 % 13.3 % 11.1 %
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER 2014
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
Gross margin $ 1,051.1 $ 0.3 $ 1,051.4
% of Net Sales 35.2 % 35.3 %
Selling, general and administrative 658.3 (14.1 ) $ 644.2
% of Net Sales 22.1 % 21.6 %
Operating margin 392.8 14.4 407.2
% of Net Sales 13.2 % 13.7 %
Earnings from continuing operations before income taxes 265.7 39.9 305.6
Income taxes on continuing operations 46.7 9.1 55.8
Net earnings from continuing operations 219.3 30.8 250.1
Diluted earnings per share of common stock $ 1.37 $ 0.19 $ 1.56
1
Merger and acquisition-related charges relate primarily to integration and consulting costs.
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
and Other
Charges2
Normalized3
Gross margin $ 1,026.8 $ 3.1 $ 1,029.9
% of Net Sales 35.6 % 35.8 %
Selling, general and administrative 696.9 (45.8 ) 651.1
% of Net Sales 24.2 % 22.6 %
Operating margin 329.9 48.9 378.8
% of Net Sales 11.5 % 13.2 %
Earnings from continuing operations before income taxes 60.2 212.2 272.4
Income tax (benefit) expense on continuing operations (10.2 ) 69.9 59.7
Net earnings from continuing operations 70.5 142.3 212.8
Diluted earnings per share of common stock $ 0.44 $ 0.89 $ 1.34
2
Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech
acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment
charges. Other charges relate to the loss on extinguishment of debt.
3
The normalized 2014 and 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s
margin and earnings results aside from the material impact of the merger & acquisition-related and other charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR TO DATE 2014
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
Gross margin $ 4,102.7 $ 1.8 $ 4,104.5
% of Net Sales 36.2 % 36.2 %
Selling, general and administrative 2,595.9 (31.6 ) 2,564.3
% of Net Sales 22.9 % 22.6 %
Operating margin 1,506.8 33.4 1,540.2
% of Net Sales 13.3 % 13.6 %
Earnings from continuing operations before income taxes 1,084.8 53.9 1,138.7
Income taxes on continuing operations 227.1 5.2 232.3
Net earnings from continuing operations 857.2 48.7 905.9
Diluted earnings per share of common stock $ 5.37 $ 0.30 $ 5.67
1
Merger and acquisition-related charges relate primarily to integration and consulting costs, as well as employee-related matters.
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related and Other
Charges2
Normalized3
Gross margin $ 3,903.7 $ 29.5 $ 3,933.2
% of Net Sales 35.8 % 36.1 %
Selling, general and administrative 2,690.6 (135.7 ) 2,554.9
% of Net Sales 24.7 % 23.5 %
Operating margin 1,213.1 165.2 1,378.3
% of Net Sales 11.1 % 12.7 %
Earnings from continuing operations before income taxes 587.6 390.3 977.9
Income taxes on continuing operations 68.6 120.0 188.6
Net earnings from continuing operations 520.0 270.3 790.3
Diluted earnings per share of common stock $ 3.28 $ 1.70 $ 4.98
2
Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech
acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment
charges. Other charges relate to the loss on extinguishment of debt.
3
The normalized 2014 and 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s
margin and earnings results aside from the material impact of the merger & acquisition-related and other charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
FOURTH QUARTER 2014
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 244.5 $ 0.3 $ 244.8
Industrial 136.7 2.2 138.9
Security 69.7 3.1 72.8
Segment Profit 450.9 5.6 456.5
Corporate Overhead (58.1 ) 8.8 (49.3 )
Total $ 392.8 $ 14.4 $ 407.2
Segment Profit as a Percentage of Net Sales
Construction & DIY 16.3 % 16.4 %
Industrial 15.3 % 15.6 %
Security 11.7 % 12.2 %
Segment Profit 15.1 % 15.3 %
Corporate Overhead (1.9 %) (1.7 %)
Total 13.2 % 13.7 %
1
Merger and acquisition-related charges relate primarily to integration and consulting costs.
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 202.8 $ 3.8 $ 206.6
Industrial 135.1 4.0 139.1
Security 66.8 11.4 78.2
Segment Profit 404.7 19.2 423.9
Corporate Overhead (74.8 ) 29.7 (45.1 )
Total $ 329.9 $ 48.9 $ 378.8
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.5 % 14.8 %
Industrial 15.3 % 15.8 %
Security 11.1 % 13.0 %
Segment Profit 14.0 % 14.7 %
Corporate Overhead (2.6 %) (1.6 %)
Total 11.5 % 13.2 %
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility
closure-related charges, employee-related charges and integration costs.
3
The normalized 2014 and 2013 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the
Company's segment profit results aside from the material impact of the merger and acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2014
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 871.5 $ 1.0 $ 872.5
Industrial 553.5 6.8 560.3
Security 259.2 6.9 266.1
Segment Profit 1,684.2 14.7 1,698.9
Corporate Overhead (177.4 ) 18.7 (158.7 )
Total $ 1,506.8 $ 33.4 $ 1,540.2
Segment Profit as a Percentage of Net Sales
Construction & DIY 15.7 % 15.7 %
Industrial 15.8 % 16.0 %
Security 11.4 % 11.7 %
Segment Profit 14.9 % 15.0 %
Corporate Overhead (1.6 %) (1.4 %)
Total 13.3 % 13.6 %
1
Merger and acquisition-related charges relate primarily to integration and consulting costs, as well as employee-related matters.
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 777.1 $ 13.0 $ 790.1
Industrial 456.7 24.8 481.5
Security 233.3 38.0 271.3
Segment Profit 1,467.1 75.8 1,542.9
Corporate Overhead (254.0 ) 89.4 (164.6 )
Total $ 1,213.1 $ 165.2 $ 1,378.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.7 % 15.0 %
Industrial 13.8 % 14.6 %
Security 10.1 % 11.7 %
Segment Profit 13.5 % 14.2 %
Corporate Overhead (2.3 %) (1.5 %)
Total 11.1 % 12.7 %
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility
closure-related charges, employee-related charges and integration costs.
3
The normalized 2014 and 2013 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the
Company's segment profit results aside from the material impact of the merger and acquisition-related charges.
Contact:
Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
Drmicrocap
12年前
Stanley Black & Decker Reports 3Q 2014 Results
Stanley Black & Decker October 22, 2014 6:00 AM
NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker ( SWK) today announced third quarter 2014 financial results.
3Q’14 Revenues Up 5% To $2.9 Billion; Organic Growth Of 6% Operating Margin Expanded 230 Basis Points To 13.8%; Excluding Charges, Operating Margin Expanded 120 Basis Points To 14.1% 3Q’14 Diluted GAAP EPS Was $1.50; Excluding Charges, 3Q’14 Diluted EPS Was $1.55 CDIY Achieved 10% Organic Growth; Record Operating Margin Of 16.5%, Excluding Charges Increasing 2014 Full Year Free Cash Flow Guidance To Approximately $800 Million From At Least $675 Million Reiterating Mid-Point While Tightening 2014 Full Year EPS Guidance Range Of $5.40 To $5.46 On A GAAP Basis ($5.52 To $5.58, Excluding Charges) 3Q’14 Key Points:
Net sales for the period were $2.9 billion, up 5% versus the prior year, primarily attributable to volume (+5%) and price (+1%), partially offset by currency (-1%). The gross margin rate for the quarter was 36.2%. Excluding charges the gross margin rate was also 36.2%, up 20 basis points from the prior year rate of 36.0%, as favorable volume, price, productivity and cost actions more than offset unfavorable currency and lower Security margins. SG&A expenses were 22.4% of sales. Excluding charges, SG&A expenses were 22.1% of sales, compared to 23.1% in 3Q’13. Operating margin rate was 13.8%. Excluding charges, operating margin rate was 14.1%, up 120 basis points from 3Q’13, as actions taken to improve profitability and generate operating leverage more than offset slightly higher than expected unfavorable currency. The tax rate was 19.1%. Excluding charges, the tax rate was 18.8% due to a larger portion of earnings in lower taxed jurisdictions and changes in required foreign tax reserves due to statute expirations. Working capital turns for the quarter were 6.4, up 0.5 turns from 3Q’13. Free cash flow for the quarter was $189 million, a $178 million increase over 3Q’13. Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “Our strong third quarter results demonstrate the benefits of our focus on driving organic growth, margin expansion and operating leverage through new product vitality accompanied by diligent price and cost management. These efforts have allowed us to maintain operating momentum while overcoming persistent challenges relating to currency and a volatile macro backdrop, particularly within emerging markets. During the quarter, our CDIY and Industrial businesses posted impressive top and bottom line results, and Security continued to make progress on its multi-year business transformation. Strong underlying growth, earnings and cash flow momentum position us well for the future.”
3Q’14 Segment Results
($ in M) 3Q' 14 Segment Results
Sales Profit Charges1
Profit
Ex-
Charges1
Profit Rate Profit Rate
Ex-
Charges1
CDIY $1,454 $239.7 $0.1 $239.8 16.5% 16.5%
Industrial $866 $136.2 $1.2 $137.4 15.7% 15.9%
Security $582 $63.9 $0.3 $64.2 11.0% 11.0%
1 See Merger And Acquisition (M&A) One-Time Charges On Page 5
CDIY net sales increased 9% versus 3Q’13 as a result of volume (+9%) and price (+1%), partially offset by currency (-1%). Organic growth in North America (+12%) recovered from a second quarter negatively impacted by poor weather while Europe continued its momentum, growing 11% organically. North American volume benefitted from strong underlying tool demand driven by new products as well as expanded retail offerings and partnerships. In addition, outdoor product volume was stronger than expected as some of the volume lost in the second quarter due to cold weather was recovered this quarter. Europe maintained its strong quarterly organic growth momentum attributable to continued market share gains from new product introductions and an expanded retail footprint. Organic growth within the emerging markets was up 2% as Latin America, Russia and Turkey, among others, remain challenged. Excluding charges, overall segment profit rate was a record 16.5%, up from the 3Q’13 rate of 15.1%, as volume leverage, price, productivity and cost management more than offset currency pressures. Industrial net sales increased 5% versus 3Q’13 as a result of volume (+4%) and price (+1%). Organic sales for the Industrial and Automotive Repair (“IAR”) business were up 7% with strength in both North America and Europe. Engineered Fastening achieved 5% organic growth driven primarily by strong global automotive revenues in excess of global light vehicle production. Infrastructure organic growth was down 1% as solid hydraulic tools growth was offset by the expected slowdown in on-shore oil & gas activity and project delays due to the geopolitical situations in Russia, Ukraine and the Middle East. Overall Industrial segment profit rate excluding charges was 15.9%, up 170 basis points from the 3Q’13 rate of 14.2% reflecting favorable volume leverage, productivity gains, and cost control, partially offset by currency. Security net sales decreased 3% versus 3Q’13 as lower volume (-3%) and currency (-1%) were partially offset by price (+1%). Organic growth within North America and emerging markets (“NA & EM”) increased 1% as commercial electronics and automatic doors provided uplift. Europe declined 7% organically due to continued lower installation and recurring revenues in various regions, most notably Southern Europe. Europe order rates were up high single digits for the quarter and attrition levels improved sequentially remaining within the target range of 10%-12%. Security segment profit rate excluding charges was 11.0%, consistent with the 2Q’14 rate and down 120 basis points from the 3Q’13 rate of 12.2%. The year-over-year decrease in the rate resulted from volume deleveraging and lower recurring revenue mix in Europe as well as project mix within North America. Southern Europe’s results adversely impacted the year over year rate decline for the overall Security segment by approximately 70 basis points.
President and Chief Operating Officer, James M. Loree, commented, “We again posted a solid quarter of organic growth and margin expansion along with strong cash flow. CDIY organic growth accelerated in the third quarter, contributing to record operating margin, and Industrial posted strong results as a result of robust sales and operating leverage in Engineered Fastening and IAR. Company-wide, emerging markets growth was positive for the quarter despite a choppy and slowing environment. Our mid-price point product launches position us for continued share gain in these somewhat slower markets.
“There were encouraging signs with respect to the Security business. Europe’s OM and order growth rates increased sequentially despite the ongoing challenges present in Southern Europe, while the momentum in CSS North America’s Vertical Solutions continued to grow. To ensure on-going progress, we expect to complete our review of the strategic alternatives for Southern Europe during 4Q’14 while implementing selected leadership adjustments within NA and EM to tighten execution and facilitate the global rollout of the Vertical Solutions.”
Updated 2014 Outlook And Initial 2015 Commentary
Donald Allan Jr., Senior Vice President and CFO, commented, “We are reiterating the mid-point while tightening our previously communicated 2014 EPS outlook range to $5.52 - $5.58 on an adjusted basis or $5.40 - $5.46 on a GAAP basis. The mid-point of our full year EPS outlook remains unchanged as we expect the stronger than expected operational performance including our continued focus on indirect cost control and price management to offset the unfavorable impact of the current challenging macro environment, which is causing further currency pressure. We now estimate the full year currency impact to be approximately $75 million, up from our prior estimate of $60 million. In addition, we are raising our 2014 free cash flow estimate to approximately $800 million from the prior estimate of at least $675 million as we expect lower one-time restructuring payments, solid working capital performance, and slightly lower levels of capital expenditures.
“While it is premature to provide detail guidance for 2015 at this time, the continued strengthening of the U.S. dollar and slowing emerging market economic growth is a known headwind of approximately $50 - $75 million to 2015 operating margin growth. However, we have a demonstrated track record of responding to these types of currency and macro economic pressures with surgical cost reduction actions. In this regard, we are currently considering several initiatives which would largely, if not completely, offset these headwinds. Such actions, if taken, would likely require additional restructuring charges of $10 - $25 million in excess of our current 2014 estimate of $25 million.”
The Company remains committed to its capital allocation plan of modest debt deleveraging in 2014, returning up to $1 billion of capital to shareholders through 2015, and supporting a strong and growing dividend. These actions combined with near-term operational improvements are expected to improve cash flow return on investment by approximately 250 basis points through 2015.
Merger And Acquisition (M&A) One-Time Charges
Total one-time charges in 3Q’14 of $8.4 million (net of a $0.2 million restructuring credit) primarily relate to integration and consulting costs. Gross margin includes $0.1 million of these one-time charges while SG&A includes $8.1 million. $1.6 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. Also included in one-time charges are $0.4 million in Other, net.
The Company will host a conference call with investors today, Wednesday, October 22, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for “SWK Investor Relations”.
The call will be accessible by telephone at 1 (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3821-2772. A replay will also be available two hours after the call and can be accessed at 1 (888) 843-7419 or +1 (630) 652-3042 using the passcode 3821-2772#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
These results reflect the Company’s continuing operations. In 3Q’13, the Company classified two small businesses within the Security and Industrial segments as held for sale based on management's intention to sell these businesses. The business within the Industrial segment was sold in February 2014. The operating results of the business within the Industrial segment, including the loss on sale, have been reported as discontinued operations for 3Q’13. The operating results of the business within the Security segment have been reported as discontinued operations for 3Q’14 and 3Q’13. Total sales reported as discontinued operations were $5.2 million and $8.9 million for 3Q’14 and 3Q’13, respectively.
The Company recast 2013 segment net sales and profit between the CDIY and Industrial segments to align reporting with the current management of the Company’s operations in the emerging markets to be comparable with the current year presentation. There is no impact to the consolidated financial statements of the Company as a result of this segment realignment.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. The normalized statement of operations and business segment information, as reconciled to GAAP on pages 12 to 15 for 2014 and 2013, are considered relevant to aid analysis of the Company’s operating performance and earnings results aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, the Niscayah and Infastech acquisitions and other smaller acquisitions of the Company. Normalized free cash flow, as reconciled from the associated GAAP measures on page 10 for 2014 and 2013 is considered a meaningful pro forma metric to aid the understanding of the Company’s cash flow performance aside from the material impact of the M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company’s ability to: (i) achieve full year 2014 diluted EPS of $5.52 - $5.58 ($5.40 - $5.46 on a GAAP basis); (ii) generate approximately $800 million of free cash flow for 2014 ; (iii) return up to $1 billion of capital to shareholders through 2015 and deliver a strong and growing dividend; and (iv) improve our cash flow return on investment by 250 basis points through 2015 (collectively, the “Results”); are “forward looking statements” and subject to risk and uncertainty.
The Company’s ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company’s Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company’s other filings with the Securities and Exchange Commission, and those set forth below.
The Company’s ability to deliver the Results is dependent, or based, upon: (i) the Company’s ability to execute its integration plans and achieve synergies primarily from the Infastech acquisition sufficient to generate $0.10 of EPS accretion in 2014; (ii) the Company’s ability to generate organic net sales increases of approximately 3-4% in 2014; (iii) the Company’s ability to continue to identify and execute upon sales opportunities to increase its CDIY, IAR and Security businesses in the emerging markets while minimizing associated costs; (iv) the Company’s ability to achieve a tax rate of approximately 21% in 2014; (v) the Company’s ability to hold margins in the Security business to a modest decrease for 2014; (vi) the Company’s ability to execute cost reduction actions and control indirect expenses; (vii) the Company’s ability to limit one-time restructuring charges to $25 million in 2014; (viii) full year 2014 operating margin currency impact of approximately $75 million; (ix) successful integration of acquisitions completed in 2012 and 2013, and any additional acquisitions completed during the year, as well as integration of existing businesses; (x) the continued acceptance of technologies used in the Company’s products and services; (xi) the Company’s ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xii) the Company’s ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xiii) the proceeds realized with respect to any business or product line disposals; (xiv) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xv) the success of the Company’s efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xvi) the Company’s ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases and/or currency impacts; (xvii) the Company’s ability to generate free cash flow and maintain a strong debt to capital ratio; (xviii) the Company’s ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xix) the Company’s ability to obtain favorable settlement of tax audits; (xx) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xxi) the continued ability of the Company to access credit markets under satisfactory terms; (xxii) the Company’s ability to negotiate satisfactory price and payment terms under which the Company buys and sells goods, services, materials and products; (xxiii) the Company’s ability to successfully develop, market and achieve sales from new products and services; and (xxiv) the availability of cash to repurchase shares when conditions are right.
The Company’s ability to deliver the Results is also dependent upon: (i) the success of the Company’s marketing and sales efforts, including the ability to develop and market new and innovative products at the right price points in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company’s manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company’s ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company’s efforts to mitigate any adverse earnings impact resulting from increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi or other currency fluctuations; (vi) the geographic distribution of the Company’s earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company’s ability to achieve the Results will also be affected by external factors. These external factors include: challenging global geopolitical and macroeconomic environment; the economic environment of emerging markets, particularly Latin America, Russia and Turkey; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company’s customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; the impact of poor weather conditions on sales; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company’s debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company’s supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
THIRD QUARTER YEAR TO DATE
2014 2013 2014 2013
NET SALES $ 2,902.2 $ 2,758.3 $ 8,427.2 $ 8,091.7
COSTS AND EXPENSES
Cost of sales 1,852.1 1,770.7 5,363.6 5,189.9
Gross margin 1,050.1 987.6 3,063.6 2,901.8
% of Net Sales 36.2 % 35.8 % 36.4 % 35.9 %
Selling, general and administrative 650.2 669.6 1,960.8 2,011.5
% of Net Sales 22.4 % 24.3 % 23.3 % 24.9 %
Operating margin 399.9 318.0 1,102.8 890.3
% of Net Sales 13.8 % 11.5 % 13.1 % 11.0 %
Other - net 61.8 66.6 182.0 208.8
Restructuring (credits) charges (0.2 ) 28.5 (5.6 ) 40.6
Income from operations 338.3 222.9 926.4 640.9
Interest - net 40.4 36.1 121.6 109.1
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 297.9 186.8 804.8 531.8
Income taxes on continuing operations 56.8 17.3 177.3 80.3
NET EARNINGS FROM CONTINUING OPERATIONS 241.1 169.5 627.5 451.5
Less: net (loss) earnings attributable to non-controlling interests (0.3 ) (0.3 ) 0.8 (0.9 )
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS 241.4 169.8 626.7 452.4
NET LOSS FROM DISCONTINUED OPERATIONS (4.7 ) (3.8 ) (11.6 ) (18.2 )
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS $ 236.7 $ 166.0 $ 615.1 $ 434.2
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.54 $ 1.10 $ 4.01 $ 2.91
Discontinued operations (0.03 ) (0.02 ) (0.07 ) (0.12 )
Total basic earnings per share of common stock $ 1.51 $ 1.07 $ 3.94 $ 2.80
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.50 $ 1.07 $ 3.92 $ 2.85
Discontinued operations (0.03 ) (0.02 ) (0.07 ) (0.11 )
Total diluted earnings per share of common stock $ 1.47 $ 1.04 $ 3.85 $ 2.74
DIVIDENDS PER SHARE $ 0.52 $ 0.50 $ 1.52 $ 1.48
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 156,628 155,043 156,278 155,140
Diluted 160,582 158,925 159,755 158,717
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
September 27, December 28,
2014 2013
ASSETS
Cash and cash equivalents $ 486.8 $ 496.2
Accounts and notes receivable, net 1,861.1 1,633.0
Inventories, net 1,758.0 1,485.2
Assets held for sale 4.7 10.1
Other current assets 341.5 344.2
Total current assets 4,452.1 3,968.7
Property, plant and equipment, net 1,448.1 1,485.3
Goodwill and other intangibles, net 10,355.9 10,632.9
Other assets 477.7 448.2
Total assets $ 16,733.8 $ 16,535.1
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $ 432.7 $ 402.6
Accounts payable 1,713.5 1,575.9
Accrued expenses 1,236.4 1,236.2
Liabilities held for sale 4.7 6.3
Total current liabilities 3,387.3 3,221.0
Long-term debt 3,856.8 3,799.4
Other long-term liabilities 2,445.7 2,634.2
Stanley Black & Decker, Inc. shareowners' equity 6,960.8 6,799.2
Non-controlling interests' equity 83.2 81.3
Total liabilities and equity $ 16,733.8 $ 16,535.1
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
THIRD QUARTER YEAR TO DATE
2014 2013 2014 2013
OPERATING ACTIVITIES
Net earnings from continuing operations $ 241.1 $ 169.5 $ 627.5 $ 451.5
Net loss from discontinued operations (4.7 ) (3.8 ) (11.6 ) (18.2 )
Depreciation and amortization 112.6 108.8 337.4 322.7
Changes in working capital1 (168.6 ) (244.2 ) (443.0 ) (371.6 )
Other 68.7 69.3 24.0 (248.1 )
Net cash provided by operating activities 249.1 99.6 534.3 136.3
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (60.2 ) (88.7 ) (179.4 ) (245.3 )
Proceeds from sale of business / assets 5.8 1.0 12.8 96.5
Acquisitions, net of cash acquired - (16.7 ) (3.2 ) (926.6 )
Proceeds from issuances of common stock 23.4 32.3 51.0 138.7
Net short-term (repayments) borrowings (48.8 ) (70.9 ) 33.8 1,199.5
Net investment hedge settlements (29.2 ) 5.3 (65.0 ) 7.0
Cash dividends on common stock (81.4 ) (77.5 ) (240.5 ) (235.0 )
Purchases of common stock for treasury (1.3 ) (7.8 ) (20.7 ) (32.6 )
Payment on forward share purchase contract - - - (350.0 )
Other (86.3 ) 30.8 (132.5 ) (35.4 )
Net cash used in investing and financing activities (278.0 ) (192.2 ) (543.7 ) (383.2 )
Decrease in Cash and Cash Equivalents (28.9 ) (92.6 ) (9.4 ) (246.9 )
Cash and Cash Equivalents, Beginning of Period 515.7 561.7 496.2 716.0
Cash and Cash Equivalents, End of Period $ 486.8 $ 469.1 $ 486.8 $ 469.1
Free Cash Flow Computation2
Operating cash inflow $ 249.1 $ 99.6 $ 534.3 $ 136.3
Less: capital and software expenditures (60.2 ) (88.7 ) (179.4 ) (245.3 )
Free cash inflow (outflow) (before dividends) $ 188.9 $ 10.9 $ 354.9 $ (109.0 )
Merger & Acquisition-related charges and payments4 29.5 65.6 116.1 282.3
Free cash inflow, normalized (before dividends)3 $ 218.4 $ 76.5 $ 471.0 $ 173.3
1 The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2,3 Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized free cash flow, as reconciled above, is considered a meaningful pro forma metric to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
4 Merger & Acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
THIRD QUARTER YEAR TO DATE
2014 2013 2014 2013
NET SALES
Construction & DIY $ 1,453.5 $ 1,332.0 $ 4,062.9 $ 3,874.0
Industrial 866.2 825.9 2,607.4 2,421.3
Security 582.5 600.4 1,756.9 1,796.4
Total $ 2,902.2 $ 2,758.3 $ 8,427.2 $ 8,091.7
SEGMENT PROFIT
Construction & DIY $ 239.7 $ 198.4 $ 627.0 $ 574.3
Industrial 136.2 114.6 416.8 321.6
Security 63.9 61.4 180.5 173.5
Segment Profit 439.8 374.4 1,224.3 1,069.4
Corporate Overhead (39.9 ) (56.4 ) (121.5 ) (179.1 )
Total $ 399.9 $ 318.0 $ 1,102.8 $ 890.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 16.5 % 14.9 % 15.4 % 14.8 %
Industrial 15.7 % 13.9 % 16.0 % 13.3 %
Security 11.0 % 10.2 % 10.3 % 9.7 %
Segment Profit 15.2 % 13.6 % 14.5 % 13.2 %
Corporate Overhead (1.4 %) (2.0 %) (1.4 %) (2.2 %)
Total 13.8 % 11.5 % 13.1 % 11.0 %
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
THIRD QUARTER 2014
Reported Merger &
Acquisition-
Related
Charges1
Normalized3
Gross margin $ 1,050.1 $ 0.1 $ 1,050.2
% of Net Sales 36.2 % 36.2 %
Selling, general and administrative 650.2 (8.1 ) $ 642.1
% of Net Sales 22.4 % 22.1 %
Operating margin 399.9 8.2 408.1
% of Net Sales 13.8 % 14.1 %
Earnings from continuing operations before income taxes 297.9 8.4 306.3
Income taxes on continuing operations 56.8 0.7 57.5
Net earnings from continuing operations 241.4 7.7 249.1
Diluted earnings per share of common stock $ 1.50 $ 0.05 $ 1.55
1 Merger and acquisition-related charges relate primarily to integration and consulting costs.
THIRD QUARTER 2013
Reported Merger &
Acquisition
-Related and
Other
Charges2
Normalized3
Gross margin $ 987.6 $ 5.3 $ 992.9
% of Net Sales 35.8 % 36.0 %
Selling, general and administrative 669.6 (31.9 ) 637.7
% of Net Sales 24.3 % 23.1 %
Operating margin 318.0 37.2 355.2
% of Net Sales 11.5 % 12.9 %
Earnings from continuing operations before income taxes 186.8 67.2 254.0
Income taxes on continuing operations 17.3 16.0 33.3
Net earnings from continuing operations 169.8 51.3 221.1
Diluted earnings per share of common stock $ 1.07 $ 0.32 $ 1.39
2 Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
3 The normalized 2014 and 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related and other charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR TO DATE 2014
Reported Merger &
Acquisition-
Related
Charges1
Normalized3
Gross margin $ 3,063.6 $ 1.5 $ 3,065.1
% of Net Sales 36.4 % 36.4 %
Selling, general and administrative 1,960.8 (19.7 ) 1,941.1
% of Net Sales 23.3 % 23.0 %
Operating margin 1,102.8 21.2 1,124.0
% of Net Sales 13.1 % 13.3 %
Earnings from continuing operations before income taxes 804.8 16.4 821.2
Income taxes on continuing operations 177.3 (3.2 ) 174.1
Net earnings from continuing operations 626.7 19.6 646.3
Diluted earnings per share of common stock $ 3.92 $ 0.13 $ 4.05
1 Merger and acquisition-related charges relate primarily to integration and consulting costs, as well as employee-related matters.
YEAR TO DATE 2013
Reported Merger &
Acquisition-
Related and
Other
Charges2
Normalized3
Gross margin $ 2,901.8 $ 26.4 $ 2,928.2
% of Net Sales 35.9 % 36.2 %
Selling, general and administrative 2,011.5 (90.3 ) 1,921.2
% of Net Sales 24.9 % 23.7 %
Operating margin 890.3 116.7 1,007.0
% of Net Sales 11.0 % 12.4 %
Earnings from continuing operations before income taxes 531.8 178.6 710.4
Income taxes on continuing operations 80.3 50.0 130.3
Net earnings from continuing operations 452.4 128.6 581.0
Diluted earnings per share of common stock $ 2.85 $ 0.81 $ 3.66
2 Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as a restructuring reversal due to the termination of a previously approved restructuring action.
3 The normalized 2014 and 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related and other charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
THIRD QUARTER 2014
Reported Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 239.7 $ 0.1 $ 239.8
Industrial 136.2 1.2 137.4
Security 63.9 0.3 64.2
Segment Profit 439.8 1.6 441.4
Corporate Overhead (39.9 ) 6.6 (33.3 )
Total $ 399.9 $ 8.2 $ 408.1
Segment Profit as a Percentage of Net Sales
Construction & DIY 16.5 % 16.5 %
Industrial 15.7 % 15.9 %
Security 11.0 % 11.0 %
Segment Profit 15.2 % 15.2 %
Corporate Overhead (1.4 %) (1.1 %)
Total 13.8 % 14.1 %
1 Merger and acquisition-related charges relate primarily to integration and consulting costs.
THIRD QUARTER 2013
Reported Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 198.4 $ 3.1 $ 201.5
Industrial 114.6 2.3 116.9
Security 61.4 11.9 73.3
Segment Profit 374.4 17.3 391.7
Corporate Overhead (56.4 ) 19.9 (36.5 )
Total $ 318.0 $ 37.2 $ 355.2
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.9 % 15.1 %
Industrial 13.9 % 14.2 %
Security 10.2 % 12.2 %
Segment Profit 13.6 % 14.2 %
Corporate Overhead (2.0 %) (1.3 %)
Total 11.5 % 12.9 %
2 Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
3 The normalized 2014 and 2013 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company's segment profit results aside from the material impact of the merger and acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2014
Reported Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 627.0 $ 0.7 $ 627.7
Industrial 416.8 4.6 421.4
Security 180.5 3.8 184.3
Segment Profit 1,224.3 9.1 1,233.4
Corporate Overhead (121.5 ) 12.1 (109.4 )
Total $ 1,102.8 $ 21.2 $ 1,124.0
Segment Profit as a Percentage of Net Sales
Construction & DIY 15.4 % 15.4 %
Industrial 16.0 % 16.2 %
Security 10.3 % 10.5 %
Segment Profit 14.5 % 14.6 %
Corporate Overhead (1.4 %) (1.3 %)
Total 13.1 % 13.3 %
1 Merger and acquisition-related charges relate primarily to integration and consulting costs, as well as employee-related matters.
YEAR TO DATE 2013
Reported Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 574.3 $ 9.2 $ 583.5
Industrial 321.6 20.8 342.4
Security 173.5 27.1 200.6
Segment Profit 1,069.4 57.1 1,126.5
Corporate Overhead (179.1 ) 59.6 (119.5 )
Total $ 890.3 $ 116.7 $ 1,007.0
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.8 % 15.1 %
Industrial 13.3 % 14.1 %
Security 9.7 % 11.2 %
Segment Profit 13.2 % 13.9 %
Corporate Overhead (2.2 %) (1.5 %)
Total 11.0 % 12.4 %
2 Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
3 The normalized 2014 and 2013 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company's segment profit results aside from the material impact of the merger and acquisition-related charges.
Company EarningsFinance
Contact:
Contact:
Stanley Black & Decker
Greg Waybright, (860) 827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
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12年前
Stanley Black & Decker Reports 4Q and Full Year 2013 Results
Business Wire Stanley Black & Decker
15 hours ago
NEW BRITAIN, Conn.--(BUSINESS WIRE)--
Stanley Black & Decker ( SWK ) today announced fourth quarter and full year 2013 financial results.
4Q13 Revenues Increased 9% To $2.9 Billion; Organic Growth Reached 4% As Organic Growth Initiatives Contributed 2 Points
4Q13 Diluted GAAP EPS Was $0.41; Excluding Charges, 4Q13 Diluted EPS Was $1.32
Full Year Revenues Increased 8% To $11.0 Billion; Organic Growth Was 3%
Full Year Diluted GAAP EPS Was $3.26; Excluding Charges, Full Year Diluted EPS Was $4.98
Full Year 2013 Free Cash Flow Of $502 Million; $854 Million Excluding Charges & Payments; Working Capital Turns Reached 8.0
4Q13 Key Points:
Net sales were $2.9 billion, up 9% versus prior year, attributable to volume (+4%) and acquisitions (+6%), partially offset by currency (-1%); price was flat for the quarter.
The gross margin rate for the quarter was 35.5%. Excluding charges, the gross margin rate was 35.6%, down slightly from the prior year rate of 36.0%, as the favorable impact of volume, productivity and cost synergies was more than offset by emerging market currency pressures and lower Security margins.
SG&A expenses were 24.2% of sales. Excluding charges, SG&A expenses were 22.6% of sales, relatively unchanged from the 4Q12 level of 22.5%.
Operating margin was 11.3% of sales. Excluding charges, operating margin was 13.0% of sales, down 50 basis points from prior year.
The tax rate was a benefit of 20.6%. Excluding charges, the rate was 22.1%, in line with expectations.
Working capital turns for the quarter were 8.0, up 0.4 turns from 4Q12. Free cash flow was $698 million, excluding $69 million of charges and payments.
Stanley Black & Deckers Chairman and CEO, John F. Lundgren, commented, During 2013 we made significant progress driving organic growth throughout the organization and the fourth quarter was no exception as the momentum continued from our organic growth initiatives. CDIY and Industrial delivered strong top and bottom line growth in spite of FX headwinds and on-going challenging global market conditions. The Security segments margin recovery is underway with notable improvement in North America and actions to improve Europes margins in place.
As we move into 2014 it is important to note that our long-term strategy and financial objectives remain intact. We are, however, focused on executing previously announced operating and capital allocation actions to boost returns in the near term. These actions demonstrate our commitment to drive sustainable improvements to the Companys cash flow return on investment and drive shareholder value.
4Q13 Segment Results
($ in M) 4Q' 13 Segment Results
Sales Profit Charges 1
Profit
Ex-
Charges 1
Profit
Rate
Profit Rate
Ex-
Charges 1
CDIY $1,456 $209.2 $3.8 $213.0 14.4% 14.6%
Industrial $824 $128.7 $4.0 $132.7 15.6% 16.1%
Security $626 $64.5 $11.6 $76.1 10.3% 12.2%
1 M&A charges primarily pertaining to synergy attainment & facility closures
CDIY segment net sales increased 6% vs. 4Q12 as a result of volume (+7%) and acquisitions (+1%), partially offset by price (-1%) and currency (-1%). Solid organic growth was experienced in all regions led by emerging markets and Europe. European volumes were strong, up 7% with growth in nearly all key countries driven by customer share gains and new product introductions. Emerging markets also grew 8% in the face of difficult market dynamics within certain regions, particularly Latin America. Similar to the prior quarter, solid organic volumes were achieved in North America, up 5%, primarily due to new product introductions, retail promotions and continued strength in the residential construction market. Excluding charges, overall segment profit was 14.6% up 10 bps from the 4Q12 rate of 14.5% as volume and productivity offset investments in organic growth initiatives and currency.
Industrial segment net sales rose 27%. Unit volumes increased approximately 8%, currency was down 1% and acquisitions added 20%. Pricing was flat for the quarter. Organic sales for Industrial and Automotive Repair (IAR) increased a robust 5% primarily as a result of volume increases in North America and Europe. Consistent with prior quarters, volume growth in North America continued to be driven by the MRO vending organic growth initiative and strength within Mac Tools mobile distribution, as well as new product introductions, which more than offset the impact of budgetary cuts on IARs US Government business. European growth was driven primarily by the timing of promotional events. Engineered Fastening posted record fourth quarter revenues for its legacy Emhart business. Organic growth was 5% driven by the global automotive revenues which once again outpaced global light vehicle production. In addition, Infastech continues to progress as planned and is on track to deliver financial commitments. Oil & Gas posted another strong quarter of impressive organic growth (+39%) driven primarily by a continued rebound by North America onshore operations combined with another strong offshore growth performance.
Overall Industrial segment profit excluding charges was 16.1%, consistent with the 4Q12 rate, as the impact of volume and productivity was offset by organic growth investments and currency.
As expected, net sales in Security decreased 2% versus 4Q12 due to volume (-4%) partially offset by price (+1%) and currency (+1%). Organic growth within the CSS North America business was relatively flat. CSS Europe declined 8% organically due primarily to continued softness in certain regions, most notably France and Southern Europe. While CSS Europe order rates remain strong in the low double digits, the conversion of backlog in the quarter did not overcome the attrition rates that remained consistent with the third quarter.
Mechanical Access organic sales were down slightly driven by declines within the commercial mechanical lock business due to the year over year impact of the distributor model transition, partially offset by growth within the automatic door business due to successful door conversion wins, new product introductions and emerging market growth.
Security segment profit rate excluding charges was 12.2%, consistent with the 3Q13 rate. During the quarter, the North America profit rate improved sequentially as a result of CSS operational field productivity. This improvement was offset by continued attrition and field inefficiencies in the Security Europe business. The 400 basis point year over year decline was attributable to the confluence of issues which have been previously communicated. The fourth quarter should represent the last quarter with steep year over year margin rate declines as the fixes take hold and the issues anniversary.
President and Chief Operating Officer, James M. Loree, commented, We remain encouraged by the strong results of CDIY and our Industrial businesses, which have leveraged the growth investments made to date. Growth in these businesses within the developed markets of North America and Europe was exceptional. Organic growth achieved within the emerging markets in the quarter and for the full year was also noteworthy given difficult and volatile regional market conditions and related currency pressures which continue to mount particularly within Latin America. As for Security, we continue to execute the actions we previously communicated to improve revenues and operating margins in both North America and Europe.
As we look forward in 2014, we have strong momentum in about 80% of the portfolio. In Security, the remaining 20%, we have taken cost and other actions to effect a turnaround. We have already seen benefits in Security North America and Europe will gradually improve throughout the year.
Reiteration Of 2014 Outlook
Donald Allan Jr., Senior Vice President and CFO commented, As previously communicated in mid-December our adjusted 2014 EPS will be in the range of $5.30 to $5.50. On a GAAP basis EPS is estimated to be in the range of $5.18 to $5.38 as M&A charges will shrink dramatically in 2014 resulting in convergence of GAAP and adjusted income. We also believe that our 2014 organic growth will approximate 4% including the benefits from our organic growth initiatives. Our 2014 outlook assumes that we will improve Security margins by approximately 150 basis points and that we experience no further significant degradation in currencies beyond current rates. Free cash flow will approximate $675 million inclusive of approximately $250 million of one-time payments primarily relating to restructuring actions.
In addition to continuing to drive organic growth and improving security margins, enhancing our operating leverage is a key priority for 2014. The financial drag from the growth investments made in 2013 is mostly behind us and we will tightly manage SG&A expenses. We also remain committed to our capital allocation plan which provides for a strong and growing dividend as well as the return of $1.5 billion to $2.0 billion of capital to stakeholders over the next two years through debt deleveraging and repurchasing up to $1 billion in stock. The combined impact of these actions is expected to have a significant favorable impact on the Companys cash flow return on investment over the next couple of years.
Merger And Acquisition (M&A) One-Time Charges
4Q13: Total one-time charges in 4Q13 related to M&A charges and cost containment actions, as well as the charges related to the extinguishment of debt were $214.9 million. Gross margin includes $3.1 million of these one-time charges, primarily for integration-related matters, and SG&A includes $46.0 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee-related matters. $19.4 million of these costs that impact the Companys operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $30.3 million are included in Other, net, primarily related to the extinguishment of debt and deal costs. Lastly, one-time charges of $135.5 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.
2013: Total one-time charges in 2013 related to M&A charges and cost containment actions, as well as the charges related to the extinguishment of debt were $393.5 million. Gross margin includes $29.5 million of these one-time charges, primarily for integration-related matters, and SG&A includes $136.3 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee-related matters. $76.5 million of these costs that impact the Companys operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $51.6 million are included in Other, net, primarily related to the extinguishment of debt and deal costs. Lastly, one-time charges of $176.1 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.
The company will host a conference call with investors today, Friday, January 24, 2014, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for SWK Investor Relations.
The call will be accessible by telephone within the US at (800) 708-4540, from outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com . To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3640-8064. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3640-8064#.
The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com .
These results reflect the Companys continuing operations. The Company sold its Hardware & Home Improvement business (HHI), including the residential portion of Tong Lung in December of 2012. The sale of this business occurred in a First and Second Closing. The First closing, which excluded the residential portion of Tong Lung, occurred on December 17, 2012. The Second closing in which the residential portion of Tong Lung was sold occurred on April 8, 2013. The operating results of HHI have been reported as discontinued operations in 2012. The operating results of the residential portion of Tong Lung have been reported as discontinued operations for 2012 and through the date of sale in 2013. In addition, in 3Q13 the Company classified two small businesses as discontinued operations. The operating results of those businesses have been reported as discontinued operations for all periods presented. Total sales reported as discontinued operations were $38.4 million in 2013 and $973.2 million in 2012.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Companys common stock and business acquisitions, among other items. The normalized statements of operations, cash flows and business segment information, as reconciled to GAAP on pages 13-18 for 2013 and 2012, are considered relevant to aid analysis of the Companys operating performance, earnings results and cash flows aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, the Niscayah and Infastech acquisitions and other smaller acquisitions of the Company. Normalized cash flow and free cash flow, as reconciled from the associated GAAP measures on pages 15-16 for 2013 and 2012 are considered meaningful pro forma metrics to aid the understanding of the Companys cash flow performance aside from the material impact of the M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release and related analyst presentation that are not historical, including but not limited to those regarding the Companys ability to: (i) achieve full year 2014 diluted EPS of $5.30 - $5.50 ($5.18 - $5.38 on a GAAP basis) and 1Q 2014 EPS excluding charges and payments of $0.95-$0.98; (ii) deliver organic growth of approximately 4% in 2014; (iii) generate approximately $675 million of free cash flow for 2014 which includes approximately $250 million of one-time payments; (iv) return $1.5 billion to $2.0 billion of capital to stakeholders over the next two years through debt deleveraging and the repurchase of up to $1 billion in stock (collectively, the Results); are forward looking statements and subject to risk and uncertainty.
The Companys ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Companys Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Companys other filings with the Securities and Exchange Commission, and those set forth below.
The Companys ability to deliver the Results is dependent, or based, upon: (i) the Companys ability to execute its integration plans and achieve synergies primarily from the Infastech acquisition sufficient to generate $0.10 of EPS accretion in 2014; (ii) the Companys ability to generate organic net sales increases of approximately 4% in 2014; (iii) the Companys ability to continue to identify and execute upon sales opportunities to increase its CDIY, IAR and Security businesses in the emerging markets while minimizing associated costs; (iv) the Companys ability to achieve a tax rate of approximately 21-22% in 2014; (v) the Companys ability to limit the increase in interest and other expense to approximately $0.10-$0.15 of EPS in 2014; (vi) the Companys ability to improve margins in the Security business by at least 150 basis points in 2014; (vii) the Companys ability to generate approximately $0.20 of EPS accretion in 2014 through cost reductions in its CDIY and Industrial segments and its corporate functions; (viii) the Companys ability to limit one-time charges primarily associated with the Infastech acquisition to $25 million in 2014; (ix) the Companys ability to minimize tax liabilities associated with the HHI divestiture; (x) successful integration of acquisitions completed in 2012 and 2013, and any additional acquisitions completed during the year, as well as integration of existing businesses; (xi) the continued acceptance of technologies used in the Companys products and services; (xii) the Companys ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xiii) the Companys ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xiv) the proceeds realized with respect to any business or product line disposals; (xv) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xvi) the success of the Companys efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xvii) the Companys ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases; (xviii) the Companys ability to generate free cash flow and maintain a strong debt to capital ratio; (xix) the Companys ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xx) the Companys ability to obtain favorable settlement of tax audits; (xxi) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xxii) the continued ability of the Company to access credit markets under satisfactory terms; (xxiii) the Companys ability to negotiate satisfactory payment terms under which the Company buys and sells goods, services, materials and products; (xxiv) the Companys ability to successfully develop, market and achieve sales from new products and services; and (xxv) the availability of cash to repurchase shares when conditions are right.
The Companys ability to deliver the Results is also dependent upon: (i) the success of the Companys marketing and sales efforts, including the ability to develop and market new and innovative products in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Companys manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Companys ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Companys efforts to mitigate any cost increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi or other currency appreciation; (vi) the geographic distribution of the Companys earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Companys ability to achieve the Results will also be affected by external factors. These external factors include: challenging global macroeconomic environment; the continued economic growth of emerging markets, particularly Latin America; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Companys customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Companys debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Companys supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER YEAR TO DATE
2013
2012 2013 2012
NET SALES $ 2,906.0 $ 2,659.5 $ 11,001.2 $ 10,147.9
COSTS AND EXPENSES
Cost of sales 1,875.3 1,713.4 7,068.3 6,452.4
Gross margin 1,030.7 946.1 3,932.9 3,695.5
% of Net Sales 35.5 % 35.6 % 35.7 % 36.4 %
Selling, general and administrative 703.1 636.6 2,714.6 2,499.9
% of Net sales 24.2 % 23.9 % 24.7 % 24.6 %
Operating margin 327.6 309.5 1,218.3 1,195.6
% of Net sales 11.3 % 11.6 % 11.1 % 11.8 %
Other - net 99.2 83.0 308.0 345.3
Restructuring charges 135.5 57.4 176.1 174.0
Income from operations
92.9 169.1 734.2 676.3
Interest - net 38.5 36.1 147.6 134.1
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 54.4 133.0 586.6 542.2
Income tax (benefit) expense on continuing operations (11.2 ) (4.7 ) 69.3 78.2
NET EARNINGS FROM CONTINUING OPERATIONS 65.6 137.7 517.3 464.0
Less: net (loss) earnings attributable to non-controlling interests (0.1 ) 0.4 (1.0 ) (0.8 )
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS 65.7 137.3 518.3 464.8
(Loss) earnings from discontinued operations before income taxes (9.0 ) 390.8 (42.0 ) 488.8
Income tax expense (benefit) on discontinued operations 0.6 36.0 (14.0 ) 69.8
NET (LOSS) EARNINGS FROM DISCONTINUED OPERATIONS (9.6 ) 354.8 (28.0 ) 419.0
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS $ 56.1 $ 492.1 $ 490.3 $ 883.8
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 0.42 $ 0.85 $ 3.34 $ 2.85
Discontinued operations (0.06 ) 2.20 (0.18 ) 2.57
Total basic earnings per share of common stock ... $ 0.36 $ 3.05 $ 3.16 $ 5.41
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 0.41 $ 0.83 $ 3.26 $ 2.79
Discontinued operations (0.06 ) 2.16 (0.18 ) 2.51
Total diluted earnings per share of common stock $ 0.35 $ 2.99 $ 3.09 $ 5.30
DIVIDENDS PER SHARE $ 0.50 $ 0.49 $ 1.98 $ 1.80
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 155,512 161,212 155,237 163,067
Diluted 159,200 164,553 158,776 166,701
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
December 28, December 29,
2013 2012
ASSETS
Cash and cash equivalents $ 496.2 $ 716.0
Accounts and notes receivable, net 1,633.0 1,525.8
Inventories, net 1,485.8 1,304.6
Assets held for sale 10.1 171.7
Other current assets 338.0 393.2
Total current assets 3,963.1 4,111.3
Property, plant and equipment, net 1,485.3 1,329.9
Goodwill and other intangibles, net 10,632.9 9,947.0
Other assets 454.4 455.8
Total assets $ 16,535.7 $ 15,844.0
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $ 402.6 $ 11.5
Accounts payable 1,575.9 1,345.9
Accrued expenses 1,245.4 1,680.0
Liabilities held for sale 6.3 37.3
Total current liabilities 3,230.2 3,074.7
Long-term debt 3,799.4 3,526.5
Other long-term liabilities 2,643.3 2,515.7
Stanley Black & Decker, Inc. shareowners' equity 6,781.5 6,667.1
Non-controlling interests' equity 81.3 60.0
Total liabilities and equity $ 16,535.7 $ 15,844.0
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2013 2012 2013 2012
OPERATING ACTIVITIES
Net earnings from continuing operations $ 65.6 $ 137.7 $ 517.3 $ 464.0
Net (loss) earnings from discontinued operations (9.6 ) 354.8 (28.0 ) 419.0
Net gains on HHI sale - (358.9 ) (4.7 ) (358.9 )
Depreciation and amortization 118.6 114.7 441.3 445.3
Changes in working capital1 384.0 338.5 12.4 52.5
Other 173.1 (38.7 ) (70.3 ) (55.7 )
Net cash provided by operating activities 731.7 548.1 868.0 966.2
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (103.5 ) (126.5 ) (365.6 ) (386.0 )
Acquisitions, net of cash acquired (7.3 ) (12.2 ) (933.9 ) (707.3 )
Proceeds from sale of business / assets 1.0 1,261.6 97.5 1,270.2
Proceeds from long-term borrowings 726.7 794.1 726.7 1,523.5
Premium paid on debt extinguishment (42.8 ) - (42.8 ) (91.0 )
Proceeds from issuances of common stock 15.9 23.5 154.6 126.4
Net short-term (repayments) borrowings (810.8 ) (1,335.4 ) 388.7 (19.1 )
Cash dividends on common stock (77.7 ) (82.7 ) (312.7 ) (304.0 )
Payments on long-term debt (300.5 ) (200.3 ) (302.2 ) (1,422.3 )
Purchases of common stock for treasury (6.6 ) (856.0 ) (39.2 ) (1,073.8 )
Premium paid for equity option (83.2 ) (29.5 ) (83.2 ) (29.5 )
Payment on forward stock purchase contract - - (350.0 ) -
Other (15.8 ) (38.2 ) (25.7 ) (44.2 )
Net cash used in investing and financing activities (704.6 ) (601.6 ) (1,087.8 ) (1,157.1 )
Increase (Decrease) in Cash and Cash Equivalents 27.1 (53.5 ) (219.8 ) (190.9 )
Cash and Cash Equivalents, Beginning of Period 469.1 769.5 716.0 906.9
Cash and Cash Equivalents, End of Period $ 496.2 $ 716.0 $ 496.2 $ 716.0
(1 ) The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
FOURTH QUARTER YEAR TO DATE
2013 2012 2013 2012
NET SALES
Construction & DIY $ 1,455.4 $ 1,370.8 $ 5,481.1 $ 5,189.9
Industrial 824.4 648.7 3,097.5 2,557.8
Security 626.2 640.0 2,422.6 2,400.2
Total $ 2,906.0 $ 2,659.5 $ 11,001.2 $ 10,147.9
SEGMENT PROFIT
Construction & DIY $ 209.2 $ 188.7 $ 798.0 $ 720.9
Industrial 128.7 100.1 436.2 414.3
Security 64.5 88.3 238.0 312.7
Segment Profit
402.4 377.1 1,472.2 1,447.9
Corporate Overhead (74.8 ) (67.6 ) (253.9 ) (252.3 )
Total
$ 327.6 $ 309.5 $ 1,218.3 $ 1,195.6
Segment Profit as a Percentage of Net Sales
Construction & DIY
14.4 % 13.8 % 14.6 % 13.9 %
Industrial 15.6 % 15.4 % 14.1 % 16.2 %
Security 10.3 % 13.8 % 9.8 % 13.0 %
Segment Profit
13.8 % 14.2 % 13.4 % 14.3 %
Corporate Overhead (2.6 %) (2.5 %) (2.3 %) (2.5 %)
Total
11.3 % 11.6 % 11.1 % 11.8 %
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized2
Gross margin
$ 1,030.7 $ 3.1 $ 1,033.8
% of Net Sales
35.5 % 35.6 %
Selling, general and administrative
703.1 (46.0 ) 657.1
% of Net Sales
24.2 % 22.6 %
Operating margin 327.6 49.1 376.7
% of Net Sales 11.3 % 13.0 %
Earnings from continuing operations before income taxes 54.4 214.9 269.3
Income tax (benefit) expense on continuing operations (11.2 ) 70.8 59.6
Net earnings from continuing operations 65.7 144.1 209.8
Diluted earnings per share of common stock $ 0.41 $ 0.91 $ 1.32
(1 ) Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
(2 ) The normalized 2013 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges3
Normalized4
Gross margin $ 946.1 $ 11.3 $ 957.4
% of Net Sales 35.6 % 36.0 %
Selling, general and administrative 636.6 (38.5 ) 598.1
% of Net Sales 23.9 % 22.5 %
Operating margin 309.5 49.8 359.3
% of Net Sales 11.6 % 13.5 %
Earnings from continuing operations before income taxes 133.0 131.4 264.4
Income taxes (benefit) on continuing operations (4.7 ) 36.4 31.7
Net earnings from continuing operations 137.3 95.0 232.3
Diluted earnings per share of common stock $ 0.83 $ 0.58 $ 1.41
(3 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
(4 ) The normalized 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized3
Gross margin $ 3,932.9 29.5 $ 3,962.4
% of Net Sales 35.7 % 36.0 %
Selling, general and administrative 2,714.6 (136.3 ) 2,578.3
% of Net Sales 24.7 % 23.4 %
Operating margin 1,218.3 165.8 1,384.1
% of Net Sales 11.1 % 12.6 %
Earnings from continuing operations before income taxes 586.6 393.5 980.1
Income taxes on continuing operations 69.3 120.8 190.1
Net earnings from continuing operations 518.3 272.7 791.0
Diluted earnings per share of common stock $ 3.26 $ 1.72 $ 4.98
(1 ) Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related and
Other
Charges2
Normalized3
Gross margin $ 3,695.5 29.6 $ 3,725.1
% of Net Sales 36.4 % 36.7 %
Selling, general and administrative 2,499.9 (138.4 ) 2,361.5
% of Net Sales 24.6 % 23.3 %
Operating margin 1,195.6 168.0 1,363.6
% of Net Sales 11.8 % 13.4 %
Earnings from continuing operations before income taxes 542.2 442.2 984.4
Income taxes on continuing operations 78.2 113.0 191.2
Net earnings from continuing operations 464.8 329.2 794.0
Diluted earnings per share of common stock $ 2.79 $ 1.97 $ 4.76
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 731.7 56.3 $ 788.0
Less: capital and software expenditures (103.5 ) 13.1 (90.4 )
Free Cash Inflow (before dividends) $ 628.2 $ 697.6
(1 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 548.1 144.3 $ 692.4
Less: capital and software expenditures (126.5 ) 30.4 (96.1 )
Free Cash Inflow (before dividends) $ 421.6 $ 596.3
(2 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
(3, 4 ) Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 868.0 280.0 $ 1,148.0
Less: capital and software expenditures (365.6 ) 71.7 (293.9 )
Free Cash Inflow (before dividends) $ 502.4 $ 854.1
(1 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as cost containment charges.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 966.2 356.5 $ 1,322.7
Less: capital and software expenditures (386.0 ) 122.4 (263.6 )
Free Cash Inflow (before dividends) $ 580.2 $ 1,059.1
(2 ) Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
(3, 4 ) Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
FOURTH QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 209.2 $ 3.8 $ 213.0
Industrial 128.7 4.0 132.7
Security 64.5 11.6 76.1
Segment Profit
402.4 19.4 421.8
Corporate Overhead (74.8 ) 29.7 (45.1 )
Total
$ 327.6 $ 49.1 $ 376.7
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.4 % 14.6 %
Industrial 15.6 % 16.1 %
Security 10.3 % 12.2 %
Segment Profit 13.8 % 14.5 %
Corporate Overhead (2.6 %) (1.6 %)
Total 11.3 % 13.0 %
(1 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
FOURTH QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 188.7 $ 10.7 $ 199.4
Industrial 100.1 4.3 104.4
Security 88.3 15.4 103.7
Segment Profit 377.1 30.4 407.5
Corporate Overhead (67.6 ) 19.4 (48.2 )
Total $ 309.5 $ 49.8 $ 359.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 13.8 % 14.5 %
Industrial 15.4 % 16.1 %
Security 13.8 % 16.2 %
Segment Profit 14.2 % 15.3 %
Corporate Overhead (2.5 %) (1.8 %)
Total 11.6 % 13.5 %
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 798.0 $ 13.0 $ 811.0
Industrial 436.2 24.8 461.0
Security 238.0 38.7 276.7
Segment Profit
1,472.2 76.5 1,548.7
Corporate Overhead (253.9 ) 89.3 (164.6 )
Total
$ 1,218.3 $ 165.8 $ 1,384.1
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.6 % 14.8 %
Industrial 14.1 % 14.9 %
Security 9.8 % 11.4 %
Segment Profit 13.4 % 14.1 %
Corporate Overhead (2.3 %) (1.5 %)
Total 11.1 % 12.6 %
(1 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 720.9 $ 41.7 $ 762.6
Industrial 414.3 7.9 422.2
Security 312.7 41.3 354.0
Segment Profit 1,447.9 90.9 1,538.8
Corporate Overhead (252.3 ) 77.1 (175.2 )
Total $ 1,195.6 $ 168.0 $ 1,363.6
Segment Profit as a Percentage of Net Sales
Construction & DIY 13.9 % 14.7 %
Industrial 16.2 % 16.5 %
Security 13.0 % 14.7 %
Segment Profit 14.3 % 15.2 %
Corporate Overhead (2.5 %) (1.7 %)
Total 11.8 % 13.4 %
(2 ) Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs.
(3 ) The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges.
Contact:
Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
Drmicrocap
13年前
Stanley Black & Decker Reports 3Q 2013 Results
Business WirePress Release: Stanley Black & Decker – Wed, Oct 16, 2013 6:00 AM EDT..
Stanley Black & Decker (SWK) today announced third quarter 2013 financial results.
• 3Q’13 Revenues Increased 10% To $2.8 Billion; Organic Growth 4%
• Organic Growth Initiatives Continue To Gain Traction Driving One-Half Of The Organic Growth (2 Points)
• 3Q’13 Diluted GAAP EPS Was $1.07; Excluding Charges, 3Q’13 Diluted EPS Was $1.39
• 2013 FY EPS Guidance Range, Excluding Charges, Revised To $4.90 - $5.00 ($3.75 - $3.95 On A GAAP Basis) From $5.40 - $5.65 as a result of slower margin rate recovery within the Security segment, weakening emerging markets and the impact of the U.S. government shutdown on organic growth
• Free Cash Flow Excluding Charges And Payments Revised To Approximately $800 Million Vs. Prior Estimate Of Approximately $1 Billion
3Q’13 Key Points:
• Net sales for the period were $2.8 billion, up 10% versus the prior year, attributable to volume (+5%) and acquisitions (+7%), partially offset by price (-1%) and currency (-1%).
• The gross margin rate for the quarter was 35.8%. Excluding charges, the gross margin rate was 36.0%, down from the prior year rate of 36.7%, as the favorable impact of volume and cost synergies was more than offset by Security margins.
• SG&A expenses were 24.3% of sales. Excluding charges, SG&A expenses were 23.1% of sales, compared to a 3Q’12 level of 22.7%, primarily reflecting investments in organic growth initiatives.
• Operating margin was 11.5% of sales. Excluding charges, operating margin was 12.9% of sales, down 110 basis points from the 3Q’12 operating margin of 14.0%.
• The tax rate was 9.2%. Excluding charges, the tax rate was 13.1%, reflecting the realization of certain tax credits and the higher level of earnings in lower-taxed foreign jurisdictions.
• Diluted GAAP EPS was $1.07. Excluding charges, 3Q’13 diluted EPS was $1.39.
Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We continue to make significant progress driving organic growth throughout the organization. Our focused organic growth initiatives have resulted in a strong third quarter performance and maintained the momentum we achieved in the second quarter.
“Growth was robust across the portfolio with our CDIY and Industrial segments posting another strong organic growth quarter, and with the exception of Europe, Security also achieved solid, mid-single digit organic growth. Within Security, we are gaining further traction with our verticals initiative based on recent order activity and are encouraged by the sequential growth and margin improvements in this segment during the quarter. However, the achievement of high teen margins, which we believe represent the appropriate level given the characteristics of this business, is taking longer than anticipated.
“Progress from our organic growth initiatives combined with the overall strength and diversity of our portfolio and underlying strategic framework position us well to deliver on our previously stated long-term financial objectives.”
3Q’13 Segment Results
($ in M) 3Q' 13 Segment Results
Sales Profit Charges1 Profit
Ex-Charges1
Profit Rate Profit Rate
Ex-Charges1
CDIY $1,388 $203.9 $3.1 $207.0 14.7% 14.9%
Industrial $771 $109.2 $2.3 $111.5 14.2% 14.5%
Security $600 $61.4 $11.9 $73.3 10.2% 12.2%
1 M&A charges primarily pertaining to synergy attainment & facility closures
• In the CDIY segment, net sales increased 5% vs. 3Q’12 as a result of volume (+6%) and acquisitions (+1%), partially offset by price (-1%) and currency (-1%). Similar to the prior quarter, strong organic volumes were achieved in North America, primarily driven by new product introductions, retail promotions and continued strength in the residential construction market, as well as within the emerging markets which grew 10%. While the emerging markets continue to be a source of strength, current macroeconomic conditions have caused growth rates to decelerate somewhat. European volumes were solid; up 3% organically, with growth in all regions. In particular, the UK performed well reflecting share gains in the face of continued soft economic conditions. Excluding charges, overall segment profit was 14.9%, relatively consistent with the 2Q’13 rate but down from the 3Q’12 rate of 15.5% as investments in organic growth initiatives and currency pressures offset volume and productivity.
• Net sales in the Industrial segment rose 25%. Unit volumes increased approximately 4%, currency was down 1% and acquisitions added 22%. Pricing was flat for the quarter. Oil & Gas posted another strong quarter of impressive organic growth (+32%) driven primarily by continued strength within its North American onshore operations. Organic sales for Industrial and Automotive Repair (IAR) increased 2% primarily as a result of volume increases in North America and the emerging markets. Similar to CDIY, although strong, IAR’s emerging markets growth fell short of expectations due to the weakening of these markets. Consistent with the prior quarter, volume growth in North America was driven by the MRO vending growth initiative as well as strength within Mac Tools mobile distribution, which more than offset the impact of spending cuts on IAR’s US Government business and the results of IAR’s European operations. Engineered Fastening organic growth was relatively flat in the face of a difficult equipment sales comparison, even as organic fastener volume was up 6%. The integration of Infastech continues to progress as planned and is on track to deliver its planned synergies.
Overall Industrial segment profit excluding charges was 14.5% down from the 3Q’12 rate of 15.4% due primarily to investments in organic growth initiatives and the mix impact of Infastech’s modestly below line average margins.
• Net sales in Security increased 3% versus 3Q’12 due to pricing (+1%) acquisitions (+1%) and currency (+1%). Volume was relatively flat. Organic growth within the CSS North America business was up an encouraging 6% driven by higher installation and service volumes supported by early successes with the vertical markets organic growth initiative. CSS Europe declined 4% organically due primarily to continued softness in various regions, most notably France and the Nordics.
Mechanical Access organic sales were up 4% driven by strong growth within the automatic door business due to successful door conversion wins and new product introductions. The commercial mechanical lock business also experienced growth during the quarter driven by gains in emerging markets.
Security segment profit rate excluding charges was 12.2%, up 170 basis points from the 2Q’13 rate and 380 basis points lower than the 3Q’12 rate. The sequential improvement in the rate is primarily attributable to North America volume improvements due in part to organic growth investments, the elimination of costs associated with the commercial lock business model shift, and progress relating to field technician productivity. As previously communicated, the year over year decline in the rate resulted from field technician costs required to install and service the growing second half North American backlog, investments in organic growth initiatives, European volume declines and temporary negative rate pressure in the commercial lock business due to the business model shift.
President and Chief Operating Officer, James M. Loree, commented, “While the slower macro backdrop has created some challenges as global economic growth rates have notched downward, we are encouraged by the fact that most of our businesses continue to post solid organic performances aided by our substantial growth investments. As we move into 2014 we are entering the period in which these investments will become accretive to operating margin.
“As for Security, notable progress was made during the quarter outside of Europe on both organic growth (+4%) and operating margin rate (~15%) and we expect to see continued progress in 2014. European Security made less tangible progress on organic growth (down 4%) and rate (~7%); however, its management team made significant underlying headway on talent upgrades and basic business model fixes that will bear fruit as we enter 2014. Substantial improvements have been made in both North America and Europe with the latter being manifested about six months behind our expectations. Therefore, we fully expect Security to regain its appropriate position as a revenue and earnings growth driver in 2014 and beyond.”
Revision Of 2013 Outlook
As a result of a slower than expected margin rate recovery within our Security operations as well as overall lower than previously anticipated organic growth related to macro issues affecting emerging markets and the U.S. government budget impasse, the Company is revising its outlook for full year 2013 EPS and free cash flow to approximately $4.90 - $5.00 per share and $800 million, respectively, excluding charges and payments, based on the following:
• Approximately half of the full year EPS outlook reduction relates to the aforementioned slower than expected pace of the Security margin improvement.
• The balance of the reduction relates to lower organic growth expectations within our CDIY and Industrial segments. This is primarily attributable to growth pressure within the emerging markets due to the current volatile macroeconomic environment, and the uncertainty created by the U.S. government’s sequestration and shut-down, and its impact on business, consumer confidence and spending levels.
• Partially offsetting these items will be a lower tax rate of ~20% versus our prior estimated tax rate of ~23%.
• These factors combined with lower than expected working capital performance create a reduction to our free cash flow estimate for the year.
• FY’13 organic growth is now expected to approximate 3% versus the prior expectation range of 4%-5%.
• All other assumptions remain unchanged from our prior guidance
Including all charges, the Company expects GAAP EPS to be in the range of $3.75 - $3.95 in 2013. For the full year of 2013 the Company estimates one-time pre-tax charges to be approximately $225 - $250 million.
Donald Allan Jr., Senior Vice President and CFO commented, “As the year progresses, our strong organic growth performance within many of our businesses continues to be a bright spot for Stanley Black & Decker. However, the year-to-date performance of our Security business has created pressure on our results which has, along with lower organic growth expectations within certain businesses and geographies, caused us to revise our full year 2013 earnings and free cash flow outlook. The actions we have taken and are executing to address the Security segment’s margin performance will enable us to increase Security margins to levels that are more closely aligned to historical results. We remain focused and committed to attaining our long-term financial goals and 2016/2017 vision enabled by our disciplined focus on organic growth initiatives, our commitment to allocating capital in ways that provide excellent returns for our shareholders, and our proven capabilities of driving efficiencies and streamlining our operations via the Stanley Fulfillment System.
“Assuming that the level of volatility and current uncertainty in the markets we serve does not worsen in 2014 and based on our path to recovery in Security, we see conditions in 2014 that support our long-term 4%-6% organic growth expectations and 2014 EPS growth, excluding charges, ranging from 7% - 9%.”
Merger And Acquisition (M&A) One-Time Charges
Total one-time charges in 3Q’13 related to M&A were $67.2 million. Gross margin includes $5.3 million of these one-time charges, primarily for integration-related matters, and SG&A includes $31.9 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee-related matters. $17.3 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $1.5 million are included in Other, net, primarily related to deal costs, and $28.5 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.
The company will host a conference call with investors today, Wednesday, October 16, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the Apple App Store by searching for “SWK Investor Relations”.
The call will be accessible by telephone at (800) 447-0521, from outside the U.S. at +1 (847) 413-3238, and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 3574-6661. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3574-6661#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
These results reflect the Company’s continuing operations. The Company sold its Hardware & Home Improvement business (HHI), including the residential portion of Tong Lung in December of 2012. The sale of this business occurred in a First and Second Closing. The First closing, which excluded the residential portion of Tong Lung, occurred on December 17, 2012. The Second closing in which the residential portion of Tong Lung was sold occurred on April 8, 2013. The operating results of the residential portion of Tong Lung and HHI have been reported as discontinued operations for 3Q’12. In addition, in 3Q’13 the Company has reported two small businesses as discontinued operations. Total sales reported as discontinued operations were $7.8 million and $268.8 million for 3Q’13 and 3Q’12, respectively.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. The normalized statement of operations, cash flows and business segment information, as reconciled to GAAP on pages 13-18 for 2013 and 2012, are considered relevant to aid analysis of the Company’s operating performance, earnings results and cash flows aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, the Niscayah and Infastech acquisitions and other smaller acquisitions of the Company. Normalized cash flow and free cash flow, as reconciled from the associated GAAP measures on pages 15-16 for 2013 and 2012 are considered meaningful pro forma metrics to aid the understanding of the Company’s cash flow performance aside from the material impact of the M&A-related payments and charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release that are not historical, including but not limited to those regarding the Company’s ability to: (i) achieve full year 2013 diluted EPS of $4.90 - $5.00 ($3.75 - $3.95 on a GAAP basis); (ii) generate approximately $800 million in free cash flow for 2013, excluding charges and payments; (iii) achieve its 2016/2017 vision; and (iv) achieve long term organic growth of 4% - 6% and 2014 EPS growth ranging from 7% - 9% (collectively, the “Results”); are “forward looking statements” and subject to risk and uncertainty.
The Company’s ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company’s Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company’s other filings with the Securities and Exchange Commission, and those set forth below.
The Company’s ability to deliver the Results is dependent, or based, upon: (i) the Company’s ability to achieve $50 million of synergies in 2013 from Black & Decker merger and another $50 million from the acquisition of Niscayah; (ii) the Company’s ability to execute its integration plans and achieve synergies from the Infastech acquisition sufficient to generate $.20 of EPS accretion in 2013; (iii) the Company’s ability to generate organic net sales increases of approximately 3% in 2013; (iv) the Company’s ability to generate a modest increase in operating margin vs. the prior year in the CDIY segment and to minimize any decrease in operating margin vs. the prior year in the Security and Industrial segments; (v) the Company’s ability to continue to identify and execute upon acquisitions and sales opportunities to increase its CDIY, IAR and Security businesses in the emerging markets while minimizing associated costs; (vi) the Company’s ability to achieve a tax rate of approximately 20% in 2013; (vii) the Company’s ability to limit interest expense to approximately $145 million and other-net to approximately $250 million in 2013; (viii) the Company’s ability to minimize tax liabilities associated with the HHI divestiture; (ix) successful integration of acquisitions completed in 2012 and 2013, and any additional acquisitions completed during the year, as well as integration of existing businesses; (x) the continued acceptance of technologies used in the Company’s products and services; (xi) the Company’s ability to manage existing Sonitrol franchisee and Mac Tools relationships; (xii) the Company’s ability to minimize costs associated with any sale or discontinuance of a business or product line, including any severance, restructuring, legal or other costs; (xiii) the proceeds realized with respect to any business or product line disposals; (xiv) the extent of any asset impairments with respect to any businesses or product lines that are sold or discontinued; (xv) the success of the Company’s efforts to manage freight costs, steel and other commodity costs as well as capital expenditures; (xvi) the Company’s ability to sustain or increase prices in order to, among other things, offset or mitigate the impact of steel, freight, energy, non-ferrous commodity and other commodity costs and any inflation increases; (xvii) the Company’s ability to generate free cash flow and maintain a strong debt to capital ratio; (xviii) the Company’s ability to identify and effectively execute productivity improvements and cost reductions, while minimizing any associated restructuring charges; (xix) the Company’s ability to obtain favorable settlement of routine tax audits; (xx) the ability of the Company to generate earnings sufficient to realize future income tax benefits during periods when temporary differences become deductible; (xxi) the continued ability of the Company to access credit markets under satisfactory terms; (xxii) the Company’s ability to negotiate satisfactory payment terms under which the Company buys and sells goods, services, materials and products; and (xxiii) the Company’s ability to successfully develop, market and achieve sales from new products and services.
The Company’s ability to deliver the Results is also dependent upon: (i) the success of the Company’s marketing and sales efforts, including the ability to develop and market new and innovative products in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company’s manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company’s ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company’s efforts to mitigate any cost increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi or other currency appreciation; (vi) the geographic distribution of the Company’s earnings; (vii) the commitment to and success of the Stanley Fulfillment System; and (viii) successful implementation with expected results of cost reduction programs.
The Company’s ability to achieve the Results will also be affected by external factors. These external factors include: challenging global macroeconomic environment; the continued economic growth of emerging markets, particularly Latin America; pricing pressure and other changes within competitive markets; the continued consolidation of customers particularly in consumer channels; inventory management pressures on the Company’s customers; the impact the tightened credit markets may have on the Company or its customers or suppliers; the extent to which the Company has to write off accounts receivable or assets or experiences supply chain disruptions in connection with bankruptcy filings by customers or suppliers; increasing competition; changes in laws, regulations and policies that affect the Company, including, but not limited to trade, monetary, tax and fiscal policies and laws; the timing and extent of any inflation or deflation; currency exchange fluctuations; the impact of dollar/foreign currency exchange and interest rates on the competitiveness of products and the Company’s debt program; the strength of the U.S. and European economies; the extent to which world-wide markets associated with homebuilding and remodeling stabilize and rebound; the impact of events that cause or may cause disruption in the Company’s supply, manufacturing, distribution and sales networks such as war, terrorist activities, and political unrest; and recessionary or expansive trends in the economies of the world in which the Company operates. The Company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date hereof.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
THIRD QUARTER YEAR TO DATE
2013 2012 2013 2012
NET SALES $ 2,759.3 $ 2,517.2 $ 8,095.2 $ 7,488.4
COSTS AND EXPENSES
Cost of sales 1,771.6 1,605.3 5,193.0 4,739.0
Gross margin 987.7 911.9 2,902.2 2,749.4
% of Net Sales 35.8 % 36.2 % 35.9 % 36.7 %
Selling, general and administrative 669.6 609.2 2,011.5 1,863.3
% of Net sales 24.3 % 24.2 % 24.8 % 24.9 %
Operating margin 318.1 302.7 890.7 886.1
% of Net sales
11.5 % 12.0 % 11.0 % 11.8 %
Other - net 66.6 112.7 208.8 262.3
Restructuring charges 28.5 52.9 40.6 116.6
Income from operations 223.0 137.1 641.3 507.2
Interest - net 36.1 34.2 109.1 98.0
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 186.9 102.9 532.2 409.2
Income taxes on continuing operations 17.3 12.9 80.5 82.9
NET EARNINGS FROM CONTINUING OPERATIONS 169.6 90.0 451.7 326.3
Less: net loss attributable to non-controlling interests (0.3 ) (0.2 ) (0.9 ) (1.2 )
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
TO COMMON SHAREOWNERS 169.9 90.2 452.6 327.5
(Loss) earnings from discontinued operations before income taxes (23.4 ) 40.8 (33.0 ) 98.1
Income tax (benefit) expense on discontinued operations (19.5 ) 15.8 (14.6 ) 33.8
NET (LOSS) EARNINGS FROM DISCONTINUED OPERATIONS (3.9 ) 25.0 (18.4 ) 64.3
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS $ 166.0 $ 115.2 $ 434.2 $ 391.8
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.10 $ 0.55 $ 2.92 $ 2.00
Discontinued operations (0.02 ) 0.15 (0.12 ) 0.39
Total basic earnings per share of common stock $ 1.07 $ 0.71 $ 2.80 $ 2.39
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations $ 1.07 $ 0.54 $ 2.85 $ 1.95
Discontinued operations (0.02 ) 0.15 (0.12 ) 0.38
Total diluted earnings per share of common stock $ 1.04 $ 0.69 $ 2.74 $ 2.34
DIVIDENDS PER SHARE $ 0.50 $ 0.49 $ 1.48 $ 1.31
AVERAGE SHARES OUTSTANDING (in thousands)
Basic 155,043 162,990 155,140 163,835
Diluted 158,925 166,043 158,717 167,568
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
September 28, December 29,
2013 2012
ASSETS
Cash and cash equivalents $ 469.1 $ 716.0
Accounts and notes receivable, net 1,936.4 1,525.8
Inventories, net 1,629.5 1,304.6
Assets held for sale 15.0 171.7
Other current assets 381.2 393.2
Total current assets 4,431.2 4,111.3
Property, plant and equipment, net 1,455.4 1,329.9
Goodwill and other intangibles, net 10,688.8 9,947.0
Other assets 448.3 455.8
Total assets $ 17,023.7 $ 15,844.0
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $ 1,220.1 $ 11.5
Accounts payable 1,625.9 1,345.9
Accrued expenses 1,097.8 1,680.0
Liabilities held for sale 5.0 37.3
Total current liabilities 3,948.8 3,074.7
Long-term debt 3,396.9 3,526.5
Other long-term liabilities 2,659.7 2,515.7
Stanley Black & Decker, Inc. shareowners' equity 6,936.9 6,667.1
Non-controlling interests' equity 81.4 60.0
Total liabilities and equity $ 17,023.7 $ 15,844.0
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
THIRD QUARTER YEAR TO DATE
2013 2012 2013 2012
OPERATING ACTIVITIES
Net earnings from continuing operations $ 169.6 $ 90.0 $ 451.7 $ 326.3
Net (loss) earnings from discontinued operations (3.9 ) 25.0 (18.4 ) 64.3
Depreciation and amortization 108.8 105.8 322.7 330.6
Changes in working capital1 (244.2 ) (174.8 ) (371.6 ) (286.0 )
Other 69.3 105.2 (248.1 ) (17.1 )
Net cash provided by operating activities 99.6 151.2 136.3 418.1
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (94.2 ) (89.0 ) (262.1 ) (259.5 )
Proceeds from sale of business / assets 1.0 2.3 96.5 8.6
Acquisitions, net of cash acquired (16.7 ) (106.4 ) (926.6 ) (695.1 )
Proceeds from long-term borrowings - 729.4 - 729.4
Premium paid on debt extinguishment - (91.0 ) - (91.0 )
Proceeds from issuances of common stock 32.3 27.4 138.7 102.9
Net short-term (repayments) borrowings (70.9 ) 527.4 1,199.5 1,316.3
Cash dividends on common stock (77.5 ) (82.5 ) (235.0 ) (221.3 )
Payments on long-term debt (0.6 ) (900.9 ) (1.7 ) (1,222.0 )
Purchases of common stock for treasury (7.8 ) - (32.6 ) (217.8 )
Payment on forward stock purchase contract - - (350.0 ) -
Other 42.2 23.8 (9.9 ) (6.0 )
Net cash (used in) provided by investing and financing activities (192.2 ) 40.5 (383.2 ) (555.5 )
(Decrease) Increase in Cash and Cash Equivalents (92.6 ) 191.7 (246.9 ) (137.4 )
Cash and Cash Equivalents, Beginning of Period 561.7 577.8 716.0 906.9
Cash and Cash Equivalents, End of Period $ 469.1 $ 769.5 $ 469.1 $ 769.5
1
The change in working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
THIRD QUARTER YEAR TO DATE
2013 2012 2013 2012
NET SALES
Construction & DIY $ 1,387.5 $ 1,315.7 $ 4,025.7 $ 3,819.1
Industrial 771.4 618.0 2,273.1 1,909.1
Security 600.4 583.5 1,796.4 1,760.2
Total $ 2,759.3 $ 2,517.2 $ 8,095.2 $ 7,488.4
SEGMENT PROFIT
Construction & DIY $ 203.9 $ 186.9 $ 588.8 $ 532.2
Industrial 109.2 94.6 307.5 314.2
Security 61.4 83.1 173.5 224.4
Segment Profit 374.5 364.6 1,069.8 1,070.8
Corporate Overhead (56.4 ) (61.9 ) (179.1 ) (184.7 )
Total $ 318.1 $ 302.7 $ 890.7 $ 886.1
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.7 % 14.2 % 14.6 % 13.9 %
Industrial 14.2 % 15.3 % 13.5 % 16.5 %
Security 10.2 % 14.2 % 9.7 % 12.7 %
Segment Profit 13.6 % 14.5 % 13.2 % 14.3 %
Corporate Overhead (2.0 %) (2.5 %) (2.2 %) (2.5 %)
Total 11.5 % 12.0 % 11.0 % 11.8 %
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
THIRD QUARTER 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized3
Gross margin $ 987.7 $ 5.3 $ 993.0
% of Net Sales 35.8 % 36.0 %
Selling, general and administrative 669.6 (31.9 ) 637.7
% of Net Sales 24.3 % 23.1 %
Operating margin 318.1 37.2 355.3
% of Net Sales 11.5 % 12.9 %
Earnings from continuing operations before income taxes 186.9 67.2 254.1
Income taxes on continuing operations 17.3 16.0 33.3
Net earnings from continuing operations 169.9 51.3 221.2
Diluted earnings per share of common stock $ 1.07 $ 0.32 $ 1.39
1
Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
THIRD QUARTER 2012
Reported
Merger &
Acquisition-
Related and
Other
Charges2
Normalized3
Gross margin $ 911.9 $ 11.7 $ 923.6
% of Net Sales 36.2 % 36.7 %
Selling, general and administrative 609.2 (38.9 ) 570.3
% of Net Sales 24.2 % 22.7 %
Operating margin 302.7 50.6 353.3
% of Net Sales 12.0 % 14.0 %
Earnings from continuing operations before income taxes 102.9 157.3 260.2
Income taxes on continuing operations 12.9 44.6 57.5
Net earnings from continuing operations 90.2 112.7 202.9
Diluted earnings per share of common stock $ 0.54 $ 0.68 $ 1.22
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
3
The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related and
Other
Charges1
Normalized3
Gross margin $ 2,902.2 26.4 $ 2,928.6
% of Net Sales 35.9 % 36.2 %
Selling, general and administrative 2,011.5 (90.3 ) 1,921.2
% of Net Sales 24.8 % 23.7 %
Operating margin 890.7 116.7 1,007.4
% of Net Sales 11.0 % 12.4 %
Earnings from continuing operations before income taxes 532.2 178.6 710.8
Income taxes on continuing operations 80.5 50.0 130.5
Net earnings from continuing operations 452.6 128.6 581.2
Diluted earnings per share of common stock $ 2.85 $ 0.81 $ 3.66
1
Merger and acquisition-related and other charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs, as well as a restructuring reversal due to the termination of a previously approved restructuring action.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related and
Other
Charges2
Normalized3
Gross margin $ 2,749.4 18.3 $ 2,767.7
% of Net Sales 36.7 % 37.0 %
Selling, general and administrative 1,863.3 (99.8 ) 1,763.5
% of Net Sales 24.9 % 23.5 %
Operating margin 886.1 118.1 1,004.2
% of Net Sales 11.8 % 13.4 %
Earnings from continuing operations before income taxes 409.2 310.9 720.1
Income taxes on continuing operations 82.9 76.5 159.4
Net earnings from continuing operations 327.5 234.4 561.9
Diluted earnings per share of common stock $ 1.95 $ 1.40 $ 3.35
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges. Other charges relate to the loss on extinguishment of debt.
3
The normalized 2013 and 2012 information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s margin and earnings results aside from the material impact of the merger & acquisition-related charges as well as charges associated with the loss on extinguishment of debt.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
THIRD QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 99.6 52.7 $ 152.3
Less: capital and software expenditures (94.2 ) 12.9 (81.3 )
Free Cash Inflow (before dividends) $ 5.4 $ 71.0
1
Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
THIRD QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 151.2 83.5 $ 234.7
Less: capital and software expenditures (89.0 ) 23.2 (65.8 )
Free Cash Inflow (before dividends) $ 62.2 $ 168.9
2
Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
3, 4
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges and
Payments1
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 136.3 223.7 $ 360.0
Less: capital and software expenditures (262.1 ) 58.6 (203.5 )
Free Cash (Outflow) Inflow (before dividends) $ (125.8 ) $ 156.5
1
Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges and
Payments2
Normalized4
Free Cash Flow Computation3
Net cash provided by operating activities $ 418.1 212.2 $ 630.3
Less: capital and software expenditures (259.5 ) 92.0 (167.5 )
Free Cash Inflow (before dividends) $ 158.6 $ 462.8
2
Merger and acquisition-related charges and payments relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges, integration costs, as well as cost containment charges.
3, 4
Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items. Normalized cash flow and free cash flow, as reconciled above, are considered meaningful pro forma metrics to aid the understanding of the Company's cash flow performance aside from the material impact of merger and acquisition-related activities.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
THIRD QUARTER 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 203.9 $ 3.1 $ 207.0
Industrial 109.2 2.3 111.5
Security 61.4 11.9 73.3
Segment Profit 374.5 17.3 391.8
Corporate Overhead (56.4 ) 19.9 (36.5 )
Total $ 318.1 $ 37.2 $ 355.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.7 % 14.9 %
Industrial 14.2 % 14.5 %
Security 10.2 % 12.2 %
Segment Profit 13.6 % 14.2 %
Corporate Overhead (2.0 %) (1.3 %)
Total 11.5 % 12.9 %
1
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
THIRD QUARTER 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 186.9 $ 17.2 $ 204.1
Industrial 94.6 0.6 95.2
Security 83.1 10.3 93.4
Segment Profit 364.6 28.1 392.7
Corporate Overhead (61.9 ) 22.5 (39.4 )
Total $ 302.7 $ 50.6 $ 353.3
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.2 % 15.5 %
Industrial 15.3 % 15.4 %
Security 14.2 % 16.0 %
Segment Profit 14.5 % 15.6 %
Corporate Overhead (2.5 %) (1.6 %)
Total 12.0 % 14.0 %
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
3
The normalized 2013 and 2012 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s segment profit results aside from the material impact of the merger and acquisition-related charges.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR TO DATE 2013
Reported
Merger &
Acquisition-
Related
Charges1
Normalized3
SEGMENT PROFIT
Construction & DIY $ 588.8 $ 9.2 $ 598.0
Industrial 307.5 20.8 328.3
Security 173.5 27.1 200.6
Segment Profit 1,069.8 57.1 1,126.9
Corporate Overhead (179.1 ) 59.6 (119.5 )
Total $ 890.7 $ 116.7 $ 1,007.4
Segment Profit as a Percentage of Net Sales
Construction & DIY 14.6 % 14.9 %
Industrial 13.5 % 14.4 %
Security 9.7 % 11.2 %
Segment Profit 13.2 % 13.9 %
Corporate Overhead (2.2 %) (1.5 %)
Total 11.0 % 12.4 %
1
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah and Infastech acquisitions, including facility closure-related charges, employee-related charges and integration costs.
YEAR TO DATE 2012
Reported
Merger &
Acquisition-
Related
Charges2
Normalized3
SEGMENT PROFIT
Construction & DIY $ 532.2 $ 31.0 $ 563.2
Industrial 314.2 3.6 317.8
Security 224.4 25.9 250.3
Segment Profit 1,070.8 60.5 1,131.3
Corporate Overhead (184.7 ) 57.6 (127.1 )
Total $ 886.1 $ 118.1 $ 1,004.2
Segment Profit as a Percentage of Net Sales
Construction & DIY 13.9 % 14.7 %
Industrial 16.5 % 16.6 %
Security 12.7 % 14.2 %
Segment Profit 14.3 % 15.1 %
Corporate Overhead (2.5 %) (1.7 %)
Total 11.8 % 13.4 %
2
Merger and acquisition-related charges relate primarily to the Black & Decker merger and Niscayah acquisition, including facility closure-related charges, employee-related charges and integration costs.
3
The normalized 2013 and 2012 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis of the Company’s segment profit results aside from the material impact of the merger and acquisition-related charges.
.
.
Contact:.
.
Stanley Black & Decker
Greg Waybright, 860-827-3833
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