NEW BRITAIN, Conn.,
May 16, 2017 /PRNewswire/ --
Stanley Black & Decker (NYSE:
SWK) reaffirmed its 2017 guidance and provided a strategic update,
including an update on M&A and the company's recent
acquisitions of the Craftsman brand and the Lenox and Irwin
businesses. An audio webcast of the event will be available
in the "Investors" section of the company's website at
www.stanleyblackanddecker.com later today and will be available for
90 days.
"Our vision is to be a great industrial company – one that is
both human-centered and committed to delivering top-quartile growth
and profitability," said Jim Loree,
Stanley Black & Decker's
President and Chief Executive Officer. "We operate in strong,
innovation-driven businesses in diverse, global markets, with an
organization powered by a robust and pervasive operating system,
SFS 2.0, and a strong value creation framework. We have an
execution culture that is bold and agile yet thoughtful and
disciplined that is centered around a clear purpose."
"We have a strong vision for where to take this company, with a
goal of profitably doubling the size of the company to $22 billion in revenue by 2022. Three key
themes will drive Stanley Black
& Decker towards that goal, including an aspiration to be known
as one of the world's most innovative companies powered by a
digital transformation, a continued focus on delivering
top-quartile performance, and an elevated commitment to corporate
social responsibility," added Loree.
As it relates to M&A, Loree commented, "Our focus now is
effectively integrating and leveraging our investments in the
Craftsman, Lenox and Irwin tools brands to deliver the growth and
value we expect and have committed to – we're on track to do just
that. Any sizable new acquisitions we might pursue will have to
wait for a few quarters and would likely be in the form of
industrial bolt-ons or further expansion of the commercial
electronic security business. That doesn't rule out the
occasional small tool bolt-on that might come up in the next few
quarters. It also doesn't preclude larger tool acquisitions
in the coming years once the recent additions are firmly in place
and performing well."
"A really exciting element of our overall M&A strategy is
the notion of utilizing M&A to complement our breakthrough
innovation projects and vice versa -- M&A to accelerate organic
growth. Acquisition targets must meet key criteria, including
solid returns, sound strategic logic and fit within our value
creation model," added Loree.
2017 GUIDANCE REAFFIRMED
In addition, the Company reaffirmed its updated full year 2017
guidance as provided on April 21,
2017. The Company continues to expect its 2017 EPS outlook
to be $7.95 - $8.15 on a
GAAP basis and to be $7.08 - $7.28 on an adjusted basis. The
Company also reiterated its free cash flow conversion estimate of
approximately 100%. The Company also reaffirmed that its 2018
financial vision from its prior Investor Day is achievable.
"Stanley Black &
Decker's outlook for 2017 continues to remain positive, as we
successfully navigate ongoing macroeconomic and geopolitical
challenges," said Don Allan,
Stanley Black & Decker's
Executive Vice President and CFO. "Our SFS 2.0 operating
system continues to enable us to deliver top-quartile results over
the long term. Its five distinctive elements: breakthrough
innovation, digital excellence, commercial excellence, core SFS and
functional transformation, drive our differentiated performance in
organic growth, margin expansion and asset efficiency.
Importantly, it also provides the framework to differentiate
us among industrials, all of whom are dealing with a world where
the pace of change is relentlessly accelerating."
Stanley Black & Decker,
an S&P 500 company, is a diversified global provider
of hand tools, power tools and related accessories, electronic
security solutions, healthcare solutions, engineered fastening
systems, and more. Learn more
at www.stanleyblackanddecker.com
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Investor
Contacts:
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Media
Contacts:
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Greg
Waybright
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Shannon
Lapierre
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Vice President,
Investor Relations
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Vice President,
Communications
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greg.waybright@sbdinc.com
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shannon.lapierre@sbdinc.com
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(860)
827-3833
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(860)
827-3575
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Michelle
Hards
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Tim Perra
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Director, Investor
Relations
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Vice President,
Communications
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michelle.hards@sbdinc.com
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tim.perra@sbdinc.com
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(860)
827-3913
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(860)
826-3260
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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 2017 diluted GAAP EPS of $7.95 - $8.15 and Adjusted EPS of $7.08 - $7.28; (ii) generate with the Craftsman
Brand approximately $100 million
average annual revenue growth over the next 10 years and accretion
to earnings of approximate $0.08 per
share in 2017 (excluding charges); (iii) achieve with the
integration of Newell Tools,
$80-$90 million in total cost
synergies, significant potential revenue synergies, and accretion
to earnings of approximately $0.24
per share in 2017 (excluding charges); (iv) generate 2017 free cash
flow conversion approximating 100%; (v) achieve its objective of
doubling the size of the Company by 2022 while expanding its margin
rate; and (vi) bring its credit metric back in line by early 2018
and achieve its 2018 Financial Vision, (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) continued improved results from the Company's
Industrial Businesses; (ii) the Company's ability to invest
in product, brand and commercialization of the Craftsman brand and
to successfully integrate Newell
Tools while remaining focused on its diversified industrial
portfolio strategy; (iii) the Company's ability to deliver slightly
higher overall organic growth of approximately an additional
$0.08 per share; (iv) the Company's
ability to achieve incremental cost and productivity actions of
approximately $0.10 per share and
limit the impact of higher environmental charges included in
"Other, net" to approximately negative ($0.08) per share; (v) commodity inflation
combined with foreign exchange headwinds being approximately
$100-105 million in 2017; (vi)
core (non M&A) restructuring charges being approximately
$50 million in 2017 (inclusive of the
1Q 2017 approximately $13 million
pension settlement), and 2017 tax rate relatively consistent with
the 2016 levels; (vii) to identify, close and integrate 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, including the new DEWALT FLEXVOLT™ product;
(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; and (xxii) 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 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, 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
including, core innovation, breakthrough innovation, digital and
commercial excellence and functional transformation; 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,
possibly including impact from "Brexit" or other similar actions
from other EU member states; 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.
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SOURCE Stanley Black &
Decker