STANLEY BLACK & DECKER, INC. - FORM 8-K - EX-99.2 - FINANCIAL STATEMENTS AND SUPPORTING SCHEDULES CONTAINED IN PRESS RELEASE - April 21, 2017

Attached files

file filename
EX-99.1 - PRESS RELEASE - STANLEY BLACK & DECKER, INC.ex991q12017.htm
8-K - 8-K - STANLEY BLACK & DECKER, INC.a8kq12017.htm
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
 
 
FIRST QUARTER
 
2017
 
2016
NET SALES
$
2,805.6

 
$
2,672.1

COSTS AND EXPENSES
 
 
 
Cost of sales
1,740.3

 
1,694.5

Gross margin
1,065.3

 
977.6

% of Net Sales
38.0
%
 
36.6
%
Selling, general and administrative
684.7

 
627.8

% of Net Sales
24.4
%
 
23.5
%
Operating margin
380.6

 
349.8

% of Net sales
13.6
%
 
13.1
%
Other - net
106.2

 
46.2

Gain on sales of businesses
(269.2
)
 
—

Pension settlement
12.5

 
—

Restructuring charges
15.8

 
8.0

Income from operations
515.3

 
295.6

Interest - net
42.7

 
41.5

EARNINGS BEFORE INCOME TAXES
472.6

 
254.1

Income taxes
79.5

 
65.5

NET EARNINGS
393.1

 
188.6

Less: net loss attributable to non-controlling interests
—

 
(0.8
)
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$
393.1

 
$
189.4

 
 
 
 
EARNINGS PER SHARE OF COMMON STOCK
 
 
 
Basic
$
2.63

 
$
1.30

Diluted
$
2.59

 
$
1.28

 
 
 
 
DIVIDENDS PER SHARE
$
0.58

 
$
0.55

 
 
 
 
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands)
 
 
 
Basic
149,208

 
145,870

Diluted
151,526

 
147,619

 

 


9
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
 
 
 
April 1, 2017
 
December 31, 2016
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
378.0

 
$
1,131.8

Accounts and notes receivable, net
 
1,728.0

 
1,302.8

Inventories, net
 
1,976.7

 
1,478.0

Assets held for sale
 
—

 
523.4

Other current assets
 
285.6

 
352.5

Total current assets
 
4,368.3

 
4,788.5

Property, plant and equipment, net
 
1,538.3

 
1,451.2

Goodwill and other intangibles, net
 
11,967.5

 
8,993.5

Other assets
 
788.0

 
401.7

Total assets
 
$
18,662.1

 
$
15,634.9

LIABILITIES AND SHAREOWNERS’ EQUITY
 
 
 
 
Short-term borrowings
 
$
1,167.4

 
$
12.1

Accounts payable
 
1,928.8

 
1,640.4

Accrued expenses
 
1,118.2

 
1,101.5

Liabilities held for sale
 
—

 
53.5

Total current liabilities
 
4,214.4

 
2,807.5

Long-term debt
 
3,815.6

 
3,815.3

Other long-term liabilities
 
3,814.0

 
2,638.5

Stanley Black & Decker, Inc. shareowners’ equity
 
6,811.5

 
6,367.0

Non-controlling interests’ equity
 
6.6

 
6.6

Total liabilities and shareowners' equity
 
$
18,662.1

 
$
15,634.9



10
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
 
 
 
FIRST QUARTER
 
 
2017
 
2016
 
OPERATING ACTIVITIES
 
 
 
 
Net earnings
$
393.1

 
$
188.6

 
Depreciation and amortization
101.5

 
100.1

 
Pre-tax gain on sales of businesses
(269.2
)
 
—

 
Changes in working capital1
(410.2
)
 
(268.0
)
 
Other
39.2

 
(113.8
)
 
Net cash used in operating activities
(145.6
)
 
(93.1
)
 
INVESTING AND FINANCING ACTIVITIES
 
 
 
 
Capital and software expenditures
(64.7
)
 
(64.9
)
 
Proceeds from issuances of common stock
17.3

 
8.5

 
Proceeds from sales of businesses, net of cash sold
744.8

 
—

 
Business acquisitions, net of cash acquired
(2,435.4
)
 
(13.0
)
 
Net short-term borrowings
1,156.7

 
481.2

 
Net investment hedge settlements
20.7

 
(2.4
)
 
Cash dividends on common stock
(86.7
)
 
(79.6
)
 
Purchases of common stock for treasury
(13.5
)
 
(361.4
)
 
Effect of exchange rate changes on cash
38.1

 
17.1

 
Other
14.5

 
(5.6
)
 
Net cash used in investing and financing activities
(608.2
)
 
(20.1
)
 
Decrease in Cash and Cash Equivalents
(753.8
)
 
(113.2
)
 
Cash and Cash Equivalents, Beginning of Period
1,131.8

 
465.4

 
Cash and Cash Equivalents, End of Period
$
378.0

 
$
352.2

 
 
 
 
 
 
Free Cash Flow Computation2
 
 
 
 
Operating cash flow
$
(145.6
)
 
$
(93.1
)
 
Less: capital and software expenditures
(64.7
)
 
(64.9
)
 
Free cash flow (before dividends)
$
(210.3
)
 
$
(158.0
)
 
 
 
 
 
1 
Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue.
2 
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.
 
 




11
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
 
 
FIRST QUARTER
 
2017
 
2016
NET SALES
 
 
 
Tools & Storage
$
1,854.5

 
$
1,706.9

Security
478.5

 
504.2

Industrial
472.6

 
461.0

Total
$
2,805.6

 
$
2,672.1

SEGMENT PROFIT
 
 
 
Tools & Storage
$
287.3

 
$
262.0

Security
50.9

 
60.2

Industrial
86.3

 
76.0

Segment Profit
424.5

 
398.2

Corporate Overhead
(43.9
)
 
(48.4
)
Total
$
380.6

 
$
349.8

Segment Profit as a Percentage of Net Sales
 
 
 
Tools & Storage
15.5
 %
 
15.3
 %
Security
10.6
 %
 
11.9
 %
Industrial
18.3
 %
 
16.5
 %
Segment Profit
15.1
 %
 
14.9
 %
Corporate Overhead
(1.6
)%
 
(1.8
)%
Total
13.6
 %
 
13.1
 %


12
Exhibit 99.2

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)
 
 
 
FIRST QUARTER 2017
 
 
 
 
Reported
 
Acquisition-
Related Charges & Other1
 
Normalized2
 
FIRST QUARTER 2016
Gross margin
 
$
1,065.3

 
$
6.8

 
$
1,072.1

 
$
977.6

% of Net Sales
 
38.0
%
 
 
 
38.2
%
 
36.6
%
Selling, general and administrative
 
684.7

 
(10.7
)
 
674.0

 
627.8

% of Net Sales
 
24.4
%
 
 
 
24.0
%
 
23.5
%
Operating margin
 
380.6

 
17.5

 
398.1

 
349.8

% of Net Sales
 
13.6
%
 
 
 
14.2
%
 
13.1
%
Earnings before income taxes
 
472.6

 
(211.2
)
 
261.4

 
254.1

Income taxes
 
79.5

 
(14.1
)
 
65.4

 
65.5

Net earnings
 
393.1

 
(197.1
)
 
196.0

 
189.4

Diluted earnings per share of common stock
 
$
2.59

 
$
(1.30
)
 
$
1.29

 
$
1.28

 
1 Acquisition-related charges and other relates primarily to integration and consulting costs and gain on sales of businesses.

2 The normalized 2017 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 acquisition-related charges and gain on sales of businesses.


13
Exhibit 99.2

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
 
 
 
 
FIRST QUARTER 2017
 
 
 
 
 
Reported
 
Acquisition-
Related
Charges1
 
Normalized2
 
FIRST QUARTER 2016
 
SEGMENT PROFIT
 
 
 
 
 
 
 
 
 
Tools & Storage
 
$
287.3

 
$
17.3

 
$
304.6

 
$
262.0

 
Security
 
50.9

 
0.2

 
51.1

 
60.2

 
Industrial
 
86.3

 
—

 
86.3

 
76.0

 
Segment Profit
 
424.5

 
17.5

 
442.0

 
398.2

 
Corporate Overhead
 
(43.9
)
 
—

 
(43.9
)
 
(48.4
)
 
Total
 
$
380.6

 
$
17.5

 
$
398.1

 
$
349.8

 
Segment Profit as a Percentage of Net Sales
 
 
 
 
 
 
 
 
 
Tools & Storage
 
15.5
 %
 
 
 
16.4
 %
 
15.3
 %
 
Security
 
10.6
 %
 
 
 
10.7
 %
 
11.9
 %
 
Industrial
 
18.3
 %
 
 
 
18.3
 %
 
16.5
 %
 
Segment Profit
 
15.1
 %
 
 
 
15.8
 %
 
14.9
 %
 
Corporate Overhead
 
(1.6
)%
 
 
 
(1.6
)%
 
(1.8
)%
 
Total
 
13.6
 %
 
 
 
14.2
 %
 
13.1
 %
 
 
 
 
 
 
 
 
 
 
1 
Acquisition-related charges relate primarily to integration and consulting costs.
2 
The normalized 2017 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 acquisition-related charges.


14

STANLEY BLACK & DECKER, INC. Reports