STANLEY BLACK & DECKER, INC. - FORM 8-K - EX-99.2 - FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES CONTAINED IN PRESS RELEASE - July 30, 2015

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8-K - 8-K - STANLEY BLACK & DECKER, INC.a8kq22015.htm
EX-99.1 - PRESS RELEASE - STANLEY BLACK & DECKER, INC.ex991q22015.htm
Exhibit 99.2

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

 

 


8
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
 
 
 
July 4, 2015
 
January 3, 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



9
Exhibit 99.2

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.




10
Exhibit 99.2

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
 %


11

STANLEY BLACK & DECKER, INC. Reports