Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - STANLEY BLACK & DECKER, INC. | ex991q42017.htm |
| 8-K - 8-K - STANLEY BLACK & DECKER, INC. | a8kq42017.htm |
Exhibit 99.2
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
Fourth Quarter | Year-to-Date | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
NET SALES | $ | 3,413.5 | $ | 2,920.4 | $ | 12,747.2 | $ | 11,406.9 | |||||||
COSTS AND EXPENSES | |||||||||||||||
Cost of sales | 2,165.1 | 1,843.8 | 7,969.2 | 7,139.7 | |||||||||||
Gross margin | 1,248.4 | 1,076.6 | 4,778.0 | 4,267.2 | |||||||||||
% of Net Sales | 36.6 | % | 36.9 | % | 37.5 | % | 37.4 | % | |||||||
Selling, general and administrative | 793.3 | 683.8 | 2,980.1 | 2,623.9 | |||||||||||
% of Net Sales | 23.2 | % | 23.4 | % | 23.4 | % | 23.0 | % | |||||||
Operating margin | 455.1 | 392.8 | 1,797.9 | 1,643.3 | |||||||||||
% of Net sales | 13.3 | % | 13.5 | % | 14.1 | % | 14.4 | % | |||||||
Other - net | 57.7 | 46.3 | 289.7 | 196.9 | |||||||||||
Loss (gain) on sales of businesses | 1.0 | — | (264.1 | ) | — | ||||||||||
Pension settlement | (0.6 | ) | — | 12.2 | — | ||||||||||
Restructuring charges | 8.6 | 21.7 | 51.5 | 49.0 | |||||||||||
Income from operations | 388.4 | 324.8 | 1,708.6 | 1,397.4 | |||||||||||
Interest - net | 46.6 | 42.5 | 182.5 | 171.3 | |||||||||||
EARNINGS BEFORE INCOME TAXES | 341.8 | 282.3 | 1,526.1 | 1,226.1 | |||||||||||
Income taxes | 60.7 | 26.5 | 300.5 | 261.2 | |||||||||||
NET EARNINGS | 281.1 | 255.8 | 1,225.6 | 964.9 | |||||||||||
Less: net (loss) earnings attributable to non-controlling interests | (0.4 | ) | 0.3 | (0.4 | ) | (0.4 | ) | ||||||||
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS | $ | 281.5 | $ | 255.5 | $ | 1,226.0 | $ | 965.3 | |||||||
EARNINGS PER SHARE OF COMMON STOCK | |||||||||||||||
Basic | $ | 1.88 | $ | 1.74 | $ | 8.19 | $ | 6.61 | |||||||
Diluted | $ | 1.84 | $ | 1.71 | $ | 8.04 | $ | 6.51 | |||||||
DIVIDENDS PER SHARE | $ | 0.63 | $ | 0.58 | $ | 2.42 | $ | 2.26 | |||||||
WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands) | |||||||||||||||
Basic | 150,080 | 147,145 | 149,629 | 146,041 | |||||||||||
Diluted | 153,412 | 149,440 | 152,449 | 148,207 | |||||||||||
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Exhibit 99.2
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
December 30, 2017 | December 31, 2016 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 637.5 | $ | 1,131.8 | ||||
Accounts and notes receivable, net | 1,635.9 | 1,302.8 | ||||||
Inventories, net | 2,018.4 | 1,478.0 | ||||||
Assets held for sale | — | 523.4 | ||||||
Other current assets | 274.3 | 352.5 | ||||||
Total current assets | 4,566.1 | 4,788.5 | ||||||
Property, plant and equipment, net | 1,742.5 | 1,451.2 | ||||||
Goodwill and other intangibles, net | 12,283.5 | 8,993.5 | ||||||
Other assets | 487.8 | 401.7 | ||||||
Total assets | $ | 19,079.9 | $ | 15,634.9 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 5.3 | $ | 4.3 | ||||
Current maturities of long-term debt | 983.4 | 7.8 | ||||||
Accounts payable | 2,021.0 | 1,640.4 | ||||||
Accrued expenses | 1,352.1 | 1,101.5 | ||||||
Liabilities held for sale | — | 53.5 | ||||||
Total current liabilities | 4,361.8 | 2,807.5 | ||||||
Long-term debt | 2,843.0 | 3,815.3 | ||||||
Other long-term liabilities | 3,575.2 | 2,638.5 | ||||||
Stanley Black & Decker, Inc. shareowners’ equity | 8,297.1 | 6,367.0 | ||||||
Non-controlling interests’ equity | 2.8 | 6.6 | ||||||
Total liabilities and shareowners' equity | $ | 19,079.9 | $ | 15,634.9 | ||||
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Exhibit 99.2
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
Fourth Quarter | Year-to-Date | ||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
OPERATING ACTIVITIES | |||||||||||||||||
Net earnings | $ | 281.1 | $ | 255.8 | $ | 1,225.6 | $ | 964.9 | |||||||||
Depreciation and amortization | 122.7 | 102.8 | 460.7 | 408.0 | |||||||||||||
Loss (gain) on sales of businesses | 1.0 | — | (264.1 | ) | — | ||||||||||||
Changes in working capital1 | 523.1 | 450.5 | (261.1 | ) | 57.2 | ||||||||||||
Other | 22.9 | 26.1 | 257.5 | 55.1 | |||||||||||||
Net cash provided by operating activities | 950.8 | 835.2 | 1,418.6 | 1,485.2 | |||||||||||||
INVESTING AND FINANCING ACTIVITIES | |||||||||||||||||
Capital and software expenditures | (164.5 | ) | (125.3 | ) | (442.4 | ) | (347.0 | ) | |||||||||
Premium paid on equity option | — | — | (25.1 | ) | — | ||||||||||||
Proceeds from issuances of common stock | 43.3 | 367.2 | 90.8 | 418.5 | |||||||||||||
Proceeds from issuance of preferred stock | — | — | 727.5 | — | |||||||||||||
Proceeds from sales of businesses, net of cash sold | 11.6 | 24.0 | 756.9 | 24.0 | |||||||||||||
Business acquisitions, net of cash acquired | (19.0 | ) | — | (2,601.1 | ) | (59.3 | ) | ||||||||||
Net short-term (repayments) borrowings | (575.9 | ) | (90.5 | ) | (76.7 | ) | 1.9 | ||||||||||
Net investment hedge settlements | 8.3 | 41.4 | (23.3 | ) | 104.7 | ||||||||||||
Non-controlling interest buyouts | — | (12.5 | ) | (3.2 | ) | (12.5 | ) | ||||||||||
Cash dividends on common stock | (95.0 | ) | (87.0 | ) | (362.9 | ) | (330.9 | ) | |||||||||
Cash settlement on forward stock purchase contracts | — | (147.4 | ) | — | (147.4 | ) | |||||||||||
Purchases of common stock for treasury | (12.5 | ) | (11.4 | ) | (28.7 | ) | (374.1 | ) | |||||||||
Effect of exchange rate changes on cash | (0.5 | ) | (78.9 | ) | 81.0 | (101.7 | ) | ||||||||||
Other | 7.6 | (3.8 | ) | (5.7 | ) | 5.0 | |||||||||||
Net cash used in investing and financing activities | (796.6 | ) | (124.2 | ) | (1,912.9 | ) | (818.8 | ) | |||||||||
Increase (decrease) in Cash and Cash Equivalents | 154.2 | 711.0 | (494.3 | ) | 666.4 | ||||||||||||
Cash and Cash Equivalents, Beginning of Period | 483.3 | 420.8 | 1,131.8 | 465.4 | |||||||||||||
Cash and Cash Equivalents, End of Period | $ | 637.5 | $ | 1,131.8 | $ | 637.5 | $ | 1,131.8 | |||||||||
Free Cash Flow Computation2 | |||||||||||||||||
Operating cash flow | $ | 950.8 | $ | 835.2 | $ | 1,418.6 | $ | 1,485.2 | |||||||||
Less: capital and software expenditures | (164.5 | ) | (125.3 | ) | (442.4 | ) | (347.0 | ) | |||||||||
Free cash flow (before dividends) | $ | 786.3 | $ | 709.9 | $ | 976.2 | $ | 1,138.2 | |||||||||
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. | ||||||||||||||||
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Exhibit 99.2
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
Fourth Quarter | Year-to-Date | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
NET SALES | ||||||||||||||||
Tools & Storage | $ | 2,430.2 | $ | 1,933.8 | $ | 8,862.4 | $ | 7,469.2 | ||||||||
Industrial | 473.5 | 453.8 | 1,946.0 | 1,840.3 | ||||||||||||
Security | 509.8 | 532.8 | 1,938.8 | 2,097.4 | ||||||||||||
Total | $ | 3,413.5 | $ | 2,920.4 | $ | 12,747.2 | $ | 11,406.9 | ||||||||
SEGMENT PROFIT | ||||||||||||||||
Tools & Storage | $ | 391.9 | $ | 312.4 | $ | 1,450.1 | $ | 1,266.9 | ||||||||
Industrial | 75.8 | 69.2 | 352.3 | 304.4 | ||||||||||||
Security | 55.5 | 69.9 | 212.3 | 269.2 | ||||||||||||
Segment Profit | 523.2 | 451.5 | 2,014.7 | 1,840.5 | ||||||||||||
Corporate Overhead | (68.1 | ) | (58.7 | ) | (216.8 | ) | (197.2 | ) | ||||||||
Total | $ | 455.1 | $ | 392.8 | $ | 1,797.9 | $ | 1,643.3 | ||||||||
Segment Profit as a Percentage of Net Sales | ||||||||||||||||
Tools & Storage | 16.1 | % | 16.2 | % | 16.4 | % | 17.0 | % | ||||||||
Industrial | 16.0 | % | 15.2 | % | 18.1 | % | 16.5 | % | ||||||||
Security | 10.9 | % | 13.1 | % | 11.0 | % | 12.8 | % | ||||||||
Segment Profit | 15.3 | % | 15.5 | % | 15.8 | % | 16.1 | % | ||||||||
Corporate Overhead | (2.0 | )% | (2.0 | )% | (1.7 | )% | (1.7 | )% | ||||||||
Total | 13.3 | % | 13.5 | % | 14.1 | % | 14.4 | % | ||||||||
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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)
Fourth Quarter 2017 | |||||||||||||||||
Reported | Acquisition- Related Charges & Other1 | Normalized2 | FOURTH QUARTER 2016 | ||||||||||||||
Gross margin | $ | 1,248.4 | $ | 4.3 | $ | 1,252.7 | $ | 1,076.6 | |||||||||
% of Net Sales | 36.6 | % | 36.7 | % | 36.9 | % | |||||||||||
Selling, general and administrative | 793.3 | (10.9 | ) | 782.4 | 683.8 | ||||||||||||
% of Net Sales | 23.2 | % | 22.9 | % | 23.4 | % | |||||||||||
Operating margin | 455.1 | 15.2 | 470.3 | 392.8 | |||||||||||||
% of Net Sales | 13.3 | % | 13.8 | % | 13.5 | % | |||||||||||
Earnings before income taxes | 341.8 | 27.1 | 368.9 | 282.3 | |||||||||||||
Income taxes | 60.7 | (26.1 | ) | 34.6 | 26.5 | ||||||||||||
Net earnings attributable to common shareowners | 281.5 | 53.2 | 334.7 | 255.5 | |||||||||||||
Diluted earnings per share of common stock | $ | 1.84 | $ | 0.34 | $ | 2.18 | $ | 1.71 | |||||||||
Year-to-Date 2017 | |||||||||||||||||
Reported | Acquisition- Related Charges & Other1 | Normalized2 | YEAR-TO-DATE 2016 | ||||||||||||||
Gross margin | $ | 4,778.0 | $ | 46.8 | $ | 4,824.8 | $ | 4,267.2 | |||||||||
% of Net Sales | 37.5 | % | 37.8 | % | 37.4 | % | |||||||||||
Selling, general and administrative | 2,980.1 | (37.7 | ) | 2,942.4 | 2,623.9 | ||||||||||||
% of Net Sales | 23.4 | % | 23.1 | % | 23.0 | % | |||||||||||
Operating margin | 1,797.9 | 84.5 | 1,882.4 | 1,643.3 | |||||||||||||
% of Net Sales | 14.1 | % | 14.8 | % | 14.4 | % | |||||||||||
Earnings before income taxes | 1,526.1 | (107.8 | ) | 1,418.3 | 1,226.1 | ||||||||||||
Income taxes | 300.5 | (17.3 | ) | 283.2 | 261.2 | ||||||||||||
Net earnings attributable to common shareowners | 1,226.0 | (90.5 | ) | 1,135.5 | 965.3 | ||||||||||||
Diluted earnings per share of common stock | $ | 8.04 | $ | (0.59 | ) | $ | 7.45 | $ | 6.51 | ||||||||
1 | Acquisition-related charges and other relates primarily to inventory step-up, integration and consulting costs, gains or losses on sales of businesses, and a one-time net tax charge related to the recently enacted U.S. tax legislation. | ||||||||||||||||
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, gains or losses on sales of businesses, and a one-time net tax charge related to the recently enacted U.S. tax legislation. | ||||||||||||||||
12
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)
Fourth Quarter 2017 | |||||||||||||||||
Reported | Acquisition- Related Charges1 | Normalized2 | FOURTH QUARTER 2016 | ||||||||||||||
SEGMENT PROFIT | |||||||||||||||||
Tools & Storage | $ | 391.9 | $ | 13.6 | $ | 405.5 | $ | 312.4 | |||||||||
Industrial | 75.8 | — | 75.8 | 69.2 | |||||||||||||
Security | 55.5 | 1.1 | 56.6 | 69.9 | |||||||||||||
Segment Profit | 523.2 | 14.7 | 537.9 | 451.5 | |||||||||||||
Corporate Overhead | (68.1 | ) | 0.5 | (67.6 | ) | (58.7 | ) | ||||||||||
Total | $ | 455.1 | $ | 15.2 | $ | 470.3 | $ | 392.8 | |||||||||
Segment Profit as a Percentage of Net Sales | |||||||||||||||||
Tools & Storage | 16.1 | % | 16.7 | % | 16.2 | % | |||||||||||
Industrial | 16.0 | % | 16.0 | % | 15.2 | % | |||||||||||
Security | 10.9 | % | 11.1 | % | 13.1 | % | |||||||||||
Segment Profit | 15.3 | % | 15.8 | % | 15.5 | % | |||||||||||
Corporate Overhead | (2.0 | )% | (2.0 | )% | (2.0 | )% | |||||||||||
Total | 13.3 | % | 13.8 | % | 13.5 | % | |||||||||||
Year-to-Date 2017 | |||||||||||||||||
Reported | Acquisition- Related Charges1 | Normalized2 | YEAR-TO-DATE 2016 | ||||||||||||||
SEGMENT PROFIT | |||||||||||||||||
Tools & Storage | $ | 1,450.1 | $ | 81.8 | $ | 1,531.9 | $ | 1,266.9 | |||||||||
Industrial | 352.3 | — | 352.3 | 304.4 | |||||||||||||
Security | 212.3 | 2.0 | 214.3 | 269.2 | |||||||||||||
Segment Profit | 2,014.7 | 83.8 | 2,098.5 | 1,840.5 | |||||||||||||
Corporate Overhead | (216.8 | ) | 0.7 | (216.1 | ) | (197.2 | ) | ||||||||||
Total | $ | 1,797.9 | $ | 84.5 | $ | 1,882.4 | $ | 1,643.3 | |||||||||
Segment Profit as a Percentage of Net Sales | |||||||||||||||||
Tools & Storage | 16.4 | % | 17.3 | % | 17.0 | % | |||||||||||
Industrial | 18.1 | % | 18.1 | % | 16.5 | % | |||||||||||
Security | 11.0 | % | 11.1 | % | 12.8 | % | |||||||||||
Segment Profit | 15.8 | % | 16.5 | % | 16.1 | % | |||||||||||
Corporate Overhead | (1.7 | )% | (1.7 | )% | (1.7 | )% | |||||||||||
Total | 14.1 | % | 14.8 | % | 14.4 | % | |||||||||||
1 | Acquisition-related charges relate primarily to inventory step-up, 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. | ||||||||||||||||
13