NEW BRITAIN, Conn.,
Jan. 24, 2018 /PRNewswire/
-- Stanley Black & Decker (NYSE: SWK) today
announced full year and fourth quarter 2017 financial results.
- Full Year Revenues Totaled $12.7
Billion, Up 12% Versus Prior Year, As 7% Organic Growth And
7% Growth From Acquisitions Were Partially Offset By The Sale Of
The Mechanical Security Business
- Full Year Operating Margin Rate Was 14.1%; Excluding M&A
Related Charges, Full Year Operating Margin Rate Expanded 40 Basis
Points To A Record 14.8%
- Full Year Diluted GAAP EPS Was $8.04; Excluding M&A Related Charges, Full
Year Diluted EPS Was $7.45, Up 14%
Versus Prior Year, Reflecting Strong Operational Performance And
Accretive Acquisitions
- 2017 Free Cash Flow Conversion Was Approximately 100%
- 4Q'17 Revenues Totaled $3.4
Billion, Up 17% Versus Prior Year, Including Robust Organic
Growth Of 8%
- 4Q'17 Diluted GAAP EPS Was $1.84;
Excluding M&A Related Charges, 4Q'17 Diluted EPS Was
$2.18, Up 27% Versus Prior Year
- Signed Agreement To Acquire Nelson Fastener Systems
($200 Million Revenues) For
$440 Million
- Expect 2018 Full Year Diluted GAAP EPS Of $7.80 To $8.00;
Adjusted EPS Of $8.30 - $8.50, Up 11% - 14% Versus Prior Year; 2018 Free
Cash Flow Conversion Expected To Approximate 100%
4Q'17 Key Points:
- Net sales for the quarter were $3.4
billion, up 17% versus prior year, as acquisitions (+9%),
volume (+9%) and currency (+3%) more than offset divestitures (-3%)
and price (-1%).
- Gross margin rate for the quarter was 36.6%. Excluding
charges, the gross margin rate was 36.7% compared to 36.9% in
4Q'16, as volume leverage and productivity were more than offset by
the impact from the Mechanical Security business divestiture and
continued commodity inflation.
- SG&A expenses were 23.2% of sales. Excluding charges,
SG&A expenses were 22.9% of sales, down 50 basis points versus
4Q'16, as tight cost management offset the impact from investments
in growth initiatives.
- Operating margin rate was 13.3%. Excluding charges,
operating margin rate was 13.8%, a 30 basis point expansion versus
4Q'16.
- Restructuring charges for the quarter were $8.6 million. Excluding M&A related
charges, restructuring charges for the quarter were $4.9 million compared to $21.7 million in 4Q'16.
- Tax rate was 17.8%, which reflects a one-time net charge of
$23.6 million related to the recently
enacted U.S. tax legislation. Excluding M&A related
charges and one-time tax charge, tax rate was 9.4%, no change from
4Q'16.
- Average diluted shares outstanding for the quarter were 153.4
million versus 149.4 million a year ago, due primarily to share
issuances in 4Q'16 associated with the Company's 2013 Equity
Units.
- Working capital turns for the quarter were 8.9, down 1.7 turns
from prior year as a result of recent acquisitions. Excluding
acquisitions, turns were flat versus prior year.
James M. Loree, President &
CEO, commented, "Stanley Black &
Decker delivered an impressive 2017, with strong execution aligned
with our SFS 2.0 operating system. Our team delivered total growth
of 12% with well above-market organic growth of 7%, 40 basis points
of operating margin expansion, 14% earnings per share growth and
solid free cash flow conversion. We achieved these excellent
results while successfully integrating multiple acquisitions on or
ahead of plan. We are particularly excited about the growth
pipeline for 2018 and beyond which includes core innovation, the
Craftsman brand rollout, Lenox and Irwin revenue synergies,
FlexVolt, emerging markets and additional acquisitions such as
Nelson Fastener Systems.
"We are expecting 2018 to be another strong year as our
continued focus on SFS 2.0 and our solid growth pipeline position
us to deliver sustained above-market organic growth with margin
expansion. The team is energized by our company's purpose –
'For Those Who Make The World™' – to achieve our 22/22 vision and
to strive to become known as one of the world's leading innovators,
to deliver top-quartile financial performance and to demonstrate
our commitment to social responsibility."
4Q'17 Segment Results
($ in
M)
|
|
|
Sales
|
Profit
|
Charges1
|
Profit Ex-
Charges1
|
Profit
Rate
|
Profit
Rate Ex-
Charges1
|
|
|
|
|
|
|
|
Tools &
Storage
|
$2,430
|
$391.9
|
$13.6
|
$405.5
|
16.1%
|
16.7%
|
|
|
|
|
|
|
|
Industrial
|
$473
|
$75.8
|
N/A
|
$75.8
|
16.0%
|
16.0%
|
|
|
|
|
|
|
|
Security
|
$510
|
$55.5
|
$1.1
|
$56.6
|
10.9%
|
11.1%
|
1 See Merger And Acquisition (M&A) Related
Charges On Page 5
- Tools & Storage net sales increased 26% versus 4Q'16 as
acquisitions (+13%), volume (+12%) and currency (+2%) more than
offset the impact from price to support holiday promotions
(-1%). Organic growth was strong across all regions with
emerging markets +17%, Europe +17%
and North America +8%. The
strong emerging market organic growth was supported by
mid-price-point product releases, higher e-commerce volumes and
benefits from changes to our distribution models in Russia & Turkey. All markets across
Europe contributed to another
quarter of above-market organic growth in that region, enabled by
successful commercial actions and new product launches. North
America growth was supported by share gains from strong commercial
execution and market-leading innovation, including sales from the
DEWALT FlexVolt system, as well as a healthy U.S. tool
market. Overall Tools & Storage segment profit rate,
excluding charges, was 16.7%, up 50 basis points versus 4Q'16 as
volume leverage and productivity more than offset growth
investments, price, and increased commodity
inflation.
- Industrial net sales increased 4% versus 4Q'16 as volume (+2%)
and currency (+3%) were moderated by divestitures (-1%).
Engineered Fastening organic revenues increased 1% as automotive
fastener penetration gains, which enabled growth in excess of light
vehicle production, and strong volume growth in general industrial
markets more than offset the impact from lower self-piercing rivet
system shipments in automotive and lower volumes within
electronics. Infrastructure organic revenues were up 8% on
increased Hydraulic Tools volumes from successful commercial
actions and supportive market conditions, as well as low-single
digit growth within Oil & Gas from higher inspection and
onshore project activity in North America. Overall Industrial
segment profit rate was 16.0%, as volume leverage, productivity
gains and cost control resulted in an 80 basis point expansion
versus the 4Q'16 rate.
- Security net sales decreased 4% versus 4Q'16 as bolt-on
commercial electronic security acquisitions (+4%), currency (+3%)
and volume (+2%) were more than offset by the sale of the
Mechanical Security business (-13%). North America expanded organically (+2%) on
higher installation volumes within commercial electronic security
and growth within healthcare. Europe organic growth (+1%) was due to
strength within the UK and the Nordics partially offset by
anticipated ongoing weakness in France. Overall Security
segment profit rate of 11.1% was consistent with the prior two
quarters. Versus the prior year, the rate reflects a decline
of approximately 90 basis points related to the sale of the
Mechanical Security business, as well as impacts from mix and
funding growth investments.
Engineered Fastening Acquisition
On December 22, 2017, the company
reached an agreement to purchase the industrial business of Nelson
Fastener Systems, which excludes Nelson's automotive stud welding
business, for approximately $440
million in cash (LTM Revenue ~$200
million). Nelson enhances Engineered Fastening's
presence in the general industrial end markets, expands its
portfolio of highly engineered fastening solutions and will deliver
cost synergies. The transaction is expected to be modestly
accretive to 2018 earnings per share, excluding one-time
charges. This transaction, which is subject to customary
closing conditions including regulatory approval, is expected to
close in the first half of 2018.
2018 Outlook
Donald Allan Jr., Executive Vice
President and CFO, commented, "2017 was a year of excellent
operational execution as we delivered very strong financial
results, while remaining focused on acquisition integrations,
overcoming commodity and currency headwinds, successfully
navigating dynamic end markets and investing for future
growth. In 2018 we expect to generate another year of
above-market organic growth of approximately 5% and adjusted
earnings per share growth of 11% - 14% versus prior
year."
Management expects its 2018 EPS to be $7.80 - $8.00 on a
GAAP basis and $8.30 - $8.50 on an adjusted basis. Free cash flow
conversion is expected to approximate 100%.
The following represents key 2018 adjusted EPS assumptions:
- Organic growth of approximately 5% (+$0.50 to +$0.60 EPS)
- Commodity inflation of ~$150
million partially offset by price actions (approximately
-$0.25 to -$0.30 EPS)
- Net impact from closed acquisitions, cost actions and improved
productivity partially offset by higher share count (approximately
+$0.45 to +$0.50 EPS)
- Tax rate to approximate 18% reflecting the recently enacted
U.S. tax legislation (approximately +$0.20 EPS)
- Embedded core restructuring charges (~$50 million)
Allan continued, "While we expect 2018 to have its share of
externally driven challenges, our strong day-to-day execution,
ability to deliver robust innovation, and commitment to SFS 2.0
give us confidence in our ability to deliver solid organic growth,
operating leverage and strong free cash flow conversion this year,
consistent with our long-term financial objectives."
Merger And Acquisition ("M&A") Related Charges
Total M&A related charges in 4Q'17 were $27.1 million, primarily related to
restructuring, deal and integration costs, as well as non-cash
inventory step-up charges. Gross margin included $4.3 million of these charges while SG&A
included $10.9 million. Other,
net and Restructuring included $7.2
million and $3.7 million,
respectively, of these charges. In addition, a net
$1.0 million loss was recorded in the
quarter related to divestitures.
The Company will host a conference call with investors today,
January 24, 2018, 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.
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 website at least fifteen minutes prior to
the call and download and install any necessary audio
software. Please use the conference identification number
1779666. 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 1779666. 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, electronic security
solutions, healthcare solutions, engineered fastening systems, and
more. Learn more at www.stanleyblackanddecker.com.
Investor Contacts:
Dennis Lange
Vice President, Investor Relations
dennis.lange@sbdinc.com
(860) 827-3833
Michelle Hards
Director, Investor Relations
michelle.hards@sbdinc.com
(860) 827-3913
Media Contacts:
Shannon Lapierre
Vice President, Communications & Public Relations
shannon.lapierre@sbdinc.com
(860) 827-3575
Tim Perra
Vice President, Public Affairs
tim.perra@sbdinc.com
(860) 826-3260
Organic sales growth is defined as total sales growth less the
sales of companies acquired and divested 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. Free cash flow conversion is defined as
free cash flow divided by net income, excluding the gain or loss on
the sales of businesses. The normalized statement of operations and
business segment information, as reconciled to GAAP on pages 12 and
13 for 2017, is considered relevant to aid analysis of the
Company's margin and earnings results aside from the material
impact of the acquisition-related charges, gain or loss on the
sales of businesses and a one-time net tax charge related to the
recently enacted U.S. tax legislation.
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 2018 GAAP EPS of $7.80 – $8.00 and
Adjusted EPS of $8.30 - $8.50; (ii) generate 2018 free cash flow
conversion approximating 100%; (iii) achieve its 22/22 vision of
doubling the size of the Company by 2022 while expanding its margin
rate; and (iv) deliver solid organic growth with operating
leverage, earnings per share expansion and free cash flow
conversion in 2018 consistent with its long-term financial
objectives, (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 successful
innovation in its products and services; (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 overall
organic growth of approximately 5.0% in 2018; (iv) limit the impact
from commodity inflation of approximately $150 million, partially offset by price actions
to -$.25 to -$0.30 EPS in 2018; (v) net impact from closed
acquisitions, cost actions and improved productivity partially
offset by higher share count being approximately +$0.45 to +$0.50
EPS in 2018; (vi) core (non M&A) restructuring charges being
approximately $50 million in 2018;
(vii) 2018 tax rate being approximately 18%; (viii) the Company's
ability to identify, close and integrate appropriate acquisition
opportunities, within desired timeframes at reasonable cost; (ix)
successful integration of existing and any newly acquired
businesses and formation of new business platforms; (x) the
continued acceptance of technologies used in the Company's products
and services, including DEWALT FLEXVOLT™ product; (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; and (xxiii) the Company's ability to successfully
develop, market and achieve sales from new products and services.
(xxiv) the impact of the enacted U.S. Tax Cuts and Jobs Act on the
provisional estimate recorded in 2017 based on legislative
developments and refined calculations.
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 impact from demand
changes within world-wide markets associated with homebuilding and
remodeling; 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,
including hostilities on the Korean Peninsula; 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
|
|
|
|
|
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
|
STANLEY BLACK
& DECKER, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
December
30,
|
|
December
31,
|
|
|
|
2017
|
|
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
|
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 contract
|
|
|
-
|
|
(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.
|
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%
|
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
|
|
|
|
YEAR-TO-DATE
2017
|
|
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges &
Other1
|
|
Normalized2
|
|
FOURTH
QUARTER
2016
|
|
Reported
|
|
Acquisition-
Related
Charges &
Other1
|
|
Normalized2
|
|
YEAR-TO-
DATE 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
$
1,248.4
|
|
$
4.3
|
|
$
1,252.7
|
|
$
1,076.6
|
|
$
4,778.0
|
|
$
46.8
|
|
$
4,824.8
|
|
$
4,267.2
|
|
|
% of Net
Sales
|
|
36.6%
|
|
|
|
36.7%
|
|
36.9%
|
|
37.5%
|
|
|
|
37.8%
|
|
37.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
793.3
|
|
(10.9)
|
|
$
782.4
|
|
$
683.8
|
|
2,980.1
|
|
(37.7)
|
|
$
2,942.4
|
|
$
2,623.9
|
|
|
% of Net
Sales
|
|
23.2%
|
|
|
|
22.9%
|
|
23.4%
|
|
23.4%
|
|
|
|
23.1%
|
|
23.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
455.1
|
|
15.2
|
|
470.3
|
|
392.8
|
|
1,797.9
|
|
84.5
|
|
1,882.4
|
|
1,643.3
|
|
|
% of Net
Sales
|
|
13.3%
|
|
|
|
13.8%
|
|
13.5%
|
|
14.1%
|
|
|
|
14.8%
|
|
14.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
341.8
|
|
27.1
|
|
368.9
|
|
282.3
|
|
1,526.1
|
|
(107.8)
|
|
1,418.3
|
|
1,226.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
60.7
|
|
(26.1)
|
|
34.6
|
|
26.5
|
|
300.5
|
|
(17.3)
|
|
283.2
|
|
261.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to common shareowners
|
281.5
|
|
53.2
|
|
334.7
|
|
255.5
|
|
1,226.0
|
|
(90.5)
|
|
1,135.5
|
|
965.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock
|
$
1.84
|
|
$
0.34
|
|
$
2.18
|
|
$
1.71
|
|
$
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.
|
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
|
|
|
|
YEAR-TO-DATE
2017
|
|
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges1
|
|
Normalized2
|
|
FOURTH
QUARTER
2016
|
|
Reported
|
|
Acquisition-
Related
Charges1
|
|
Normalized2
|
|
YEAR-TO-
DATE
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
$
391.9
|
|
$
13.6
|
|
$
405.5
|
|
$
312.4
|
|
$
1,450.1
|
|
$
81.8
|
|
$
1,531.9
|
|
$
1,266.9
|
|
|
Industrial
|
|
75.8
|
|
-
|
|
75.8
|
|
69.2
|
|
352.3
|
|
-
|
|
352.3
|
|
304.4
|
|
|
Security
|
|
55.5
|
|
1.1
|
|
56.6
|
|
69.9
|
|
212.3
|
|
2.0
|
|
214.3
|
|
269.2
|
|
|
Segment
Profit
|
|
523.2
|
|
14.7
|
|
537.9
|
|
451.5
|
|
2,014.7
|
|
83.8
|
|
2,098.5
|
|
1,840.5
|
|
|
Corporate
Overhead
|
|
(68.1)
|
|
0.5
|
|
(67.6)
|
|
(58.7)
|
|
(216.8)
|
|
0.7
|
|
(216.1)
|
|
(197.2)
|
|
|
Total
|
|
$
455.1
|
|
$
15.2
|
|
$
470.3
|
|
$
392.8
|
|
$
1,797.9
|
|
$
84.5
|
|
$
1,882.4
|
|
$
1,643.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
16.1%
|
|
|
|
16.7%
|
|
16.2%
|
|
16.4%
|
|
|
|
17.3%
|
|
17.0%
|
|
|
Industrial
|
|
16.0%
|
|
|
|
16.0%
|
|
15.2%
|
|
18.1%
|
|
|
|
18.1%
|
|
16.5%
|
|
|
Security
|
|
10.9%
|
|
|
|
11.1%
|
|
13.1%
|
|
11.0%
|
|
|
|
11.1%
|
|
12.8%
|
|
|
Segment
Profit
|
|
15.3%
|
|
|
|
15.8%
|
|
15.5%
|
|
15.8%
|
|
|
|
16.5%
|
|
16.1%
|
|
|
Corporate
Overhead
|
|
(2.0%)
|
|
|
|
(2.0%)
|
|
(2.0%)
|
|
(1.7%)
|
|
|
|
(1.7%)
|
|
(1.7%)
|
|
|
Total
|
|
13.3%
|
|
|
|
13.8%
|
|
13.5%
|
|
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.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/stanley-black--decker-reports-full-year-and-4q-2017-results-300587226.html
SOURCE Stanley Black &
Decker