NEW BRITAIN, Conn.,
April 20, 2018 /PRNewswire/ --
Stanley Black & Decker (NYSE:
SWK) today announced first quarter 2018 financial results.
- 1Q'18 Revenues Totaled $3.2
Billion, Up 12% Versus Prior Year, Fueled By 4% Organic
Growth And 6% Growth From Acquisitions
- 1Q'18 Diluted GAAP EPS Was $1.11;
Excluding M&A Related Charges, 1Q'18 Diluted EPS Was
$1.39, Up 7% Versus Prior Year, As
Strong Operational Performance, Acquisitions And Lower Expenses
More Than Offset Commodity Inflation
- Successfully Completed Acquisition Of Nelson Fastener Systems
For Approximately $440 Million In
Cash On April 2
- Executed Equity Derivative Transaction To Lock Repurchase
Pricing On 3.2 Million Shares Through March
2021
- Revising 2018 Full Year Diluted GAAP EPS Guidance Range To
$7.40 - $7.60 From $7.80 -
$8.00 Reflecting The Nelson Fastener
Systems Acquisition And One-Time Tax Charge
- Reiterating Adjusted EPS Guidance Range Of $8.30 - $8.50 And
Free Cash Flow Conversion Of Approximately 100%
1Q'18 Key Points:
- Net sales for the quarter were $3.2
billion, up 12% versus prior year, as positive volume (+4%),
acquisitions (+6%) and currency (+4%) more than offset divestitures
(-2%).
- Gross margin rate for the quarter was 36.3%. Excluding charges,
the gross margin rate was 36.4%, down 120 basis points from prior
year as volume leverage and productivity were more than offset by
an anticipated $50 million of
commodity inflation.
- SG&A expenses were 24.5% of sales. Excluding charges,
SG&A expenses were 24.0% of sales compared to 23.8% in 1Q'17,
reflecting investments in SFS 2.0 initiatives moderated by
continued tight cost management.
- Restructuring charges for the quarter were $22.9 million. Excluding M&A related charges,
restructuring charges for the quarter were $21.8 million compared to $15.3 million in 1Q'17.
- Other, net totaled $58.0 million
for the quarter. Excluding charges, Other, net totaled $52.1 million compared to $60.5 million in 1Q'17, reflecting the impact
from the one-time $17 million
environmental remediation charge in 1Q'17 partially offset by
increased intangible amortization related to acquisitions.
- Tax rate was 32.4% which reflects a charge of $23.1 million related to the refinement of the
one-time tax charge from the recently enacted U.S. tax legislation.
Excluding charges, tax rate was 23.0% versus the 25.0% in 1Q'17
reflecting the ongoing benefits from the recently enacted U.S. tax
legislation.
- Working capital turns for the quarter were 6.2, down 0.6 turns
from prior year resulting from higher inventory balances in Tools
& Storage in anticipation of new product launches, including
Craftsman.
Stanley Black & Decker's
President and CEO, James M. Loree,
commented, "We had a strong start to 2018, with high-single digit
earnings per share expansion in the face of significant commodity
headwinds. We also reported healthy, above-market organic growth of
4%, backed by 6% organic growth from Tools & Storage as well as
Industrial outperforming our expectation.
"The organic growth outlook remains robust as we execute a
series of opportunities including Lenox and Irwin revenue
synergies, FlexVolt, emerging markets and the rollout of the
Craftsman brand, all while the organization remains focused on
generating new core and breakthrough innovations. In addition
to organic growth, we continue to focus on strategic capital
allocation actions. The Nelson Fastener Systems acquisition
was completed in early April. We continue to see a strong
acquisition pipeline and are exploring multiple opportunities to
create significant value.
"As we navigate 2018, our 175th year in operation,
the team is focused on acting with the agility required to achieve
success in such a dynamic macroeconomic and geopolitical
environment, taking actions to achieve our 22/22 vision, and
striving to become known as one of the world's leading innovators,
while continuing to deliver top-quartile financial performance and
demonstrate our commitment to social responsibility."
1Q'18 Segment
Results
|
|
($ in
M)
|
|
|
Sales
|
Profit
|
Charges1
|
Profit Ex-
Charges1
|
Profit
Rate
|
Profit
Rate Ex-
Charges1
|
|
|
|
|
|
|
|
Tools &
Storage
|
$2,216
|
$301.4
|
$14.7
|
$316.1
|
13.6%
|
14.3%
|
|
|
|
|
|
|
|
Industrial
|
$504
|
$80.5
|
$2.0
|
$82.5
|
16.0%
|
16.4%
|
|
|
|
|
|
|
|
Security
|
$489
|
$45.5
|
$1.3
|
$46.8
|
9.3%
|
9.6%
|
1
|
See Merger And
Acquisition (M&A) Related Charges On Page 5
|
- Tools & Storage net sales increased 17% versus 1Q'17 due to
acquisitions (+8%), volume (+6%) and currency (+3%). All regions
contributed to the 6% organic growth for the quarter with emerging
markets +15%, Europe +7% and
North America +3%. Emerging
markets growth was largely due to mid-price-point product releases,
higher e-commerce volumes and benefits from changes to our
distribution models in Russia
& Turkey. Share gains
continued within Europe as the
growth was supported by new product launches and continued
successful commercial actions. North
America organic growth remained strong despite a combined 3
point impact from a slow start to the outdoor products season due
to an extended period of winter weather in several regions and
planned channel inventory reductions in preparation for the
upcoming Craftsman rollout. The growth was supported by new product
innovation, including the expansion of the DEWALT FlexVolt system,
strong commercial execution, and a healthy U.S. tool market.
Overall Tools & Storage segment profit rate, excluding charges,
was 14.3%, down from the 1Q'17 rate of 15.9%, as the benefits from
volume leverage and productivity were more than offset by the
anticipated impact from commodity inflation and investments to
support growth.
- Industrial net sales increased 5% versus 1Q'17 due to currency
(+6%) partially offset by divestitures (-1%). Engineered Fastening
organic revenues were flat as automotive fastener penetration gains
were offset by the anticipated impact from lower automotive system
shipments and lower volumes within electronics. Infrastructure
organic revenues were down 1% as higher volumes from successful
commercial actions and improved market conditions in Hydraulic
Tools were offset by expected lower pipeline project activity in
Oil & Gas. Overall Industrial segment profit rate, excluding
charges, was 16.4%, down 130 basis points from the 1Q'17 rate, as
productivity gains and cost control were offset by the impact of
commodity inflation and SFS 2.0 related investments.
- Security net sales increased 2% versus 1Q'17 as currency (+5%),
bolt-on commercial electronic security acquisitions (+3%) and price
(+1%) were partially offset by the sale of the Mechanical Security
business (-5%) and lower volume (-2%). North America organic growth was flat as
higher automatic doors volumes were offset by lower volume in
Healthcare. Europe declined 2%
organically as strength within the Nordics and UK was offset by
anticipated weakness in France.
Overall Security segment profit rate, excluding charges, was 9.6%,
down 100 basis points versus the prior year rate, which reflects
investments to support organic growth and the impact from the sale
of the Mechanical Security business.
Equity Derivative Transaction
During the first quarter the Company entered into a capped call
transaction that provides the right to purchase 3.2 million shares
through March 2021. This transaction supports our long-term
strategy to return approximately 50% of free cash flow to
shareholders via dividends and opportunistic share repurchases.
Updated 2018 Outlook
Management is revising its 2018 EPS outlook to $7.40 - $7.60 from
$7.80 - $8.00 on a GAAP basis reflecting the M&A
related charges associated with the Nelson Fastener Systems
acquisition and one-time tax charge. The Company is
reiterating its adjusted EPS range of $8.30 - $8.50 and
its free cash flow conversion estimate of approximately 100%.
The following reflects the key assumption changes to the
Company's prior EPS outlook:
- Incremental price, cost and productivity actions as well as
accretion associated with the Nelson Fastener Systems acquisition
(+~ $0.15)
- Higher commodity inflation expectations, including the impacts
from the recently announced steel and aluminum tariffs (-~
$0.15)
Donald Allan Jr., Executive Vice
President and CFO, commented, "Stanley
Black & Decker's outlook for 2018 includes above-market
organic growth of 5% and strong adjusted earnings per share growth
of 11% - 14% versus prior year, while offsetting approximately
$180 million of commodity inflation
headwinds. We are confident in the organization's ability to
deliver in today's dynamic environment as we remain focused on
strong day-to-day execution and operational excellence, which
includes the rollout of the Craftsman brand, price realization and
the successful integration of our recent acquisitions. We
continue to make targeted investments to support our SFS 2.0
operating system, which will position the Company to deliver
sustained above-market organic growth with operating leverage,
strong free cash flow conversion and top-quartile shareholder
returns over the long-term."
Merger And Acquisition ("M&A") Related Charges
Total M&A related charges in 1Q'18 were $25.1 million, primarily related to
restructuring, deal and integration costs, as well as
facility-related charges. Gross margin included $1.7 million of these charges while SG&A
included $16.4 million. Other,
net and Restructuring included $5.9
million and $1.1 million of
these charges, respectively.
The Company will host a conference call with investors today,
April 20, 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
1565355. 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 1565355. 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. The normalized statement of
operations and business segment information, as reconciled to GAAP
on pages 12 and 13, 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 on sales of
businesses and a one-time 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 $7.40 – $7.60 and
Adjusted EPS of $8.30 - $8.50; (ii) generate 2018 free cash flow
conversion approximating 100%; (iii) achieve its 22/22
vision; (iv) returning approximately 50% of free cash flow to
shareholders via dividends and opportunistic share repurchases; and
(v) achieve above-market organic growth of 5% and strong adjusted
earnings per share growth of 11%-14% versus prior year, while
offsetting approximately $180 million
of commodity inflation headwinds, (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 (including successful brand launch in the second half of
2018) and the continued successful integration of 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 $180 million (including
from recently announced steel and aluminum tariffs); (v) net impact
from closed acquisitions, cost and price actions and improved
productivity, partially offset by higher share count, being
approximately +$1.05 to +$1.15 EPS in 2018; (vi) core (non M&A)
restructuring charges being approximately $50 million in 2018; (vii) 2018 core 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
FLEXVOLTâ„¢ 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, aluminum,
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; (xxiii) the Company's ability to
successfully develop, market and achieve sales from new products
and services; (xxiv) adjustments to the provisional estimates
recorded in 2017 for the enacted U.S. Tax Cuts and Jobs Act based
on legislative developments and refined calculations; and (xxv) the
ability of the Company to proactively manage the impact of the
legislative changes brought about by the U.S. Tax Cuts and Jobs
Act.
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 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 as well as the impact of any U.S.
tariffs on imported goods; 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 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
NET
SALES
|
|
$
3,209.3
|
|
$
2,856.3
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
Cost of
sales
|
|
2,043.6
|
|
1,790.3
|
|
|
Gross
margin
|
|
1,165.7
|
|
1,066.0
|
|
|
% of Net
Sales
|
|
36.3%
|
|
37.3%
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
785.6
|
|
690.3
|
|
|
% of Net
Sales
|
|
24.5%
|
|
24.2%
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
380.1
|
|
375.7
|
|
|
% of Net
Sales
|
|
11.8%
|
|
13.2%
|
|
|
|
|
|
|
|
|
|
Other -
net
|
|
58.0
|
|
100.5
|
|
|
Gain on sales of
businesses
|
|
-
|
|
(269.2)
|
|
|
Pension
settlement
|
|
-
|
|
12.5
|
|
|
Restructuring
charges
|
|
22.9
|
|
15.8
|
|
|
Income from
operations
|
|
299.2
|
|
516.1
|
|
|
|
|
|
|
|
|
|
Interest -
net
|
|
47.4
|
|
42.7
|
|
|
|
|
|
|
|
|
EARNINGS BEFORE
INCOME TAXES
|
|
251.8
|
|
473.4
|
|
|
Income
taxes
|
|
81.7
|
|
79.7
|
|
NET
EARNINGS
|
|
170.1
|
|
393.7
|
|
|
|
|
|
|
|
|
|
Less: net loss
attributable to non-controlling interests
|
|
(0.5)
|
|
-
|
|
|
|
|
|
|
|
|
NET EARNINGS
ATTRIBUTABLE TO COMMON SHAREOWNERS
|
$
170.6
|
|
$
393.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE OF COMMON STOCK
|
|
|
|
|
|
|
Basic
|
|
$
1.13
|
|
$
2.64
|
|
|
Diluted
|
|
$
1.11
|
|
$
2.60
|
|
|
|
|
|
|
|
|
DIVIDENDS PER
SHARE
|
|
$
0.63
|
|
$
0.58
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE SHARES OUTSTANDING (in
thousands)
|
|
|
|
|
|
Basic
|
|
150,612
|
|
149,208
|
|
|
Diluted
|
|
153,905
|
|
151,526
|
STANLEY BLACK
& DECKER, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
30,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
405.6
|
|
$
637.5
|
|
Accounts and notes
receivable, net
|
|
1,986.1
|
|
1,628.7
|
|
Inventories,
net
|
|
2,350.3
|
|
2,018.4
|
|
Other current
assets
|
|
335.9
|
|
274.4
|
|
Total current assets
|
|
5,077.9
|
|
4,559.0
|
|
Property, plant and
equipment, net
|
|
1,770.2
|
|
1,742.5
|
|
Goodwill and other
intangibles, net
|
|
12,325.1
|
|
12,283.5
|
|
Other
assets
|
|
510.0
|
|
512.7
|
|
Total assets
|
|
$
19,683.2
|
|
$
19,097.7
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY
|
|
|
|
|
Short-term
borrowings
|
|
$
399.3
|
|
$
5.3
|
|
Current maturities of
long-term debt
|
|
978.2
|
|
977.5
|
|
Accounts
payable
|
|
2,172.7
|
|
2,021.0
|
|
Accrued
expenses
|
|
1,260.0
|
|
1,387.7
|
|
Total current liabilities
|
|
4,810.2
|
|
4,391.5
|
|
Long-term
debt
|
|
2,827.6
|
|
2,828.2
|
|
Other long-term
liabilities
|
|
3,603.6
|
|
3,573.0
|
|
Stanley Black &
Decker, Inc. shareowners' equity
|
8,439.2
|
|
8,302.2
|
|
Non-controlling
interests' equity
|
|
2.6
|
|
2.8
|
|
Total liabilities and shareowners' equity
|
$
19,683.2
|
|
$
19,097.7
|
STANLEY
BLACK & DECKER, INC. AND SUBSIDIARIES
|
SUMMARY OF CASH
FLOW ACTIVITY
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
|
$
170.1
|
|
$
393.7
|
|
|
|
Depreciation and
amortization
|
|
|
123.6
|
|
101.5
|
|
|
|
Gain on sales of
businesses
|
|
|
-
|
|
(269.2)
|
|
|
|
Changes in working
capital1
|
|
|
(544.3)
|
|
(533.3)
|
|
|
|
Other
|
|
|
|
(98.8)
|
|
(6.8)
|
|
|
|
Net cash used in
operating activities
|
|
|
(349.4)
|
|
(314.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING AND
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Capital and software
expenditures
|
|
|
(106.3)
|
|
(64.7)
|
|
|
|
Proceeds from
issuances of common stock
|
|
|
13.1
|
|
17.3
|
|
|
|
(Payments) proceeds
from sales of businesses, net of cash sold
|
|
|
(0.2)
|
|
744.8
|
|
|
|
Business
acquisitions, net of cash acquired
|
|
|
(1.2)
|
|
(2,435.4)
|
|
|
|
Net short-term
borrowings
|
|
|
382.0
|
|
1,156.7
|
|
|
|
Net investment hedge
settlements
|
|
|
(17.5)
|
|
20.7
|
|
|
|
Cash dividends on
common stock
|
|
|
(94.9)
|
|
(86.7)
|
|
|
|
Purchases of common
stock for treasury
|
|
|
(11.4)
|
|
(13.5)
|
|
|
|
Premium paid on
equity option
|
|
|
(57.3)
|
|
-
|
|
|
|
Proceeds related to
deferred purchase price receivable
|
|
|
-
|
|
123.1
|
|
|
|
Effect of exchange
rate changes on cash
|
|
|
27.9
|
|
38.1
|
|
|
|
Other
|
|
|
|
(16.7)
|
|
14.5
|
|
|
|
Net cash provided
by (used in) investing and financing activities
|
|
|
117.5
|
|
(485.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in cash,
cash equivalents, and restricted cash
|
|
|
(231.9)
|
|
(799.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash, beginning of
period
|
|
|
655.1
|
|
1,177.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash, end of period
|
|
|
$
423.2
|
|
$
378.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Computation2
|
|
|
|
|
|
|
|
Operating cash
outflow
|
|
|
$
(349.4)
|
|
$
(314.1)
|
|
|
Less: Capital and
software expenditures
|
|
|
(106.3)
|
|
(64.7)
|
|
|
Free cash outflow
(before dividends)
|
|
|
$
(455.7)
|
|
$
(378.8)
|
|
|
Impact of recently
adopted accounting standards3
|
|
|
|
|
168.5
|
|
|
Free cash outflow
(before dividends), as previously reported3
|
|
|
|
|
$
(210.3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Cash, Cash Equivalents and Restricted Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2018
|
|
December 30,
2017
|
|
|
Cash and cash
equivalents
|
|
|
$
405.6
|
|
$
637.5
|
|
|
Restricted cash
included in Other current assets
|
|
|
17.6
|
|
17.6
|
|
|
Cash, cash
equivalents and restricted cash
|
|
|
$
423.2
|
|
$
655.1
|
|
|
|
|
|
|
|
|
|
|
|
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.
|
|
|
3
|
Free cash flow as
reported in the first quarter of 2017 was an outflow of $210.3
million. As a result of the adoption of Accounting Standards
Update ("ASU") 2016-15, "Classification of Certain Cash Receipts
and Cash Payments" and ASU 2016-18, "Restricted Cash," first
quarter 2017 free cash flow has decreased by $168.5
million.
|
STANLEY BLACK
& DECKER, INC. AND SUBSIDIARIES
|
BUSINESS SEGMENT
INFORMATION
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
2018
|
|
2017
|
|
|
|
|
NET
SALES
|
|
|
|
|
|
Tools &
Storage
|
|
$
2,215.8
|
|
$
1,894.9
|
|
Industrial
|
|
504.2
|
|
479.7
|
|
Security
|
|
489.3
|
|
481.7
|
|
Total
|
|
$
3,209.3
|
|
$
2,856.3
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
Tools &
Storage
|
|
$
301.4
|
|
$
284.5
|
|
Industrial
|
|
80.5
|
|
85.1
|
|
Security
|
|
45.5
|
|
50.7
|
|
Segment
Profit
|
|
427.4
|
|
420.3
|
|
Corporate
Overhead
|
|
(47.3)
|
|
(44.6)
|
|
Total
|
|
$
380.1
|
|
$
375.7
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
as a Percentage of Net Sales
|
|
|
|
|
|
Tools &
Storage
|
|
13.6%
|
|
15.0%
|
|
Industrial
|
|
16.0%
|
|
17.7%
|
|
Security
|
|
9.3%
|
|
10.5%
|
|
Segment
Profit
|
|
13.3%
|
|
14.7%
|
|
Corporate
Overhead
|
|
(1.5%)
|
|
(1.6%)
|
|
Total
|
|
11.8%
|
|
13.2%
|
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
2018
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges &
Other1
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
$
1,165.7
|
|
$
1.7
|
|
$
1,167.4
|
|
|
% of Net
Sales
|
|
36.3%
|
|
|
|
36.4%
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
785.6
|
|
(16.4)
|
|
$
769.2
|
|
|
% of Net
Sales
|
|
24.5%
|
|
|
|
24.0%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
380.1
|
|
18.1
|
|
398.2
|
|
|
% of Net
Sales
|
|
11.8%
|
|
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
251.8
|
|
25.1
|
|
276.9
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
81.7
|
|
(18.0)
|
|
63.7
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to common shareowners
|
170.6
|
|
43.1
|
|
213.7
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock
|
$
1.11
|
|
$
0.28
|
|
$
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Acquisition-related
charges and other relates primarily to facility-related charges,
integration and consulting costs, and a tax charge related to
recently enacted U.S. tax legislation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2017
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges &
Other2
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
Gross
margin
|
|
$
1,066.0
|
|
$
6.8
|
|
$
1,072.8
|
|
|
% of Net
Sales
|
|
37.3%
|
|
|
|
37.6%
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
690.3
|
|
(10.7)
|
|
$
679.6
|
|
|
% of Net
Sales
|
|
24.2%
|
|
|
|
23.8%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
margin
|
|
375.7
|
|
17.5
|
|
393.2
|
|
|
% of Net
Sales
|
|
13.2%
|
|
|
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before
income taxes
|
|
473.4
|
|
(211.2)
|
|
262.2
|
|
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
|
79.7
|
|
(14.1)
|
|
65.6
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
attributable to common shareowners
|
393.7
|
|
(197.1)
|
|
196.6
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock
|
$
2.60
|
|
$
(1.30)
|
|
$
1.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
Acquisition-related
charges and other relates primarily to inventory step-up,
integration and consulting costs and gain on sales of
businesses.
|
|
|
|
|
3
|
The normalized 2017
and 2018 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, gain on sales of businesses, and a tax charge related to
recently enacted U.S. tax legislation, as applicable.
|
|
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
2018
|
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges1
|
|
Normalized2
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
$
301.4
|
|
$
14.7
|
|
$
316.1
|
|
|
|
Industrial
|
|
80.5
|
|
2.0
|
|
82.5
|
|
|
|
Security
|
|
45.5
|
|
1.3
|
|
46.8
|
|
|
|
Segment
Profit
|
|
427.4
|
|
18.0
|
|
445.4
|
|
|
|
Corporate
Overhead
|
|
(47.3)
|
|
0.1
|
|
(47.2)
|
|
|
|
Total
|
|
$
380.1
|
|
$
18.1
|
|
$
398.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
13.6%
|
|
|
|
14.3%
|
|
|
|
Industrial
|
|
16.0%
|
|
|
|
16.4%
|
|
|
|
Security
|
|
9.3%
|
|
|
|
9.6%
|
|
|
|
Segment
Profit
|
|
13.3%
|
|
|
|
13.9%
|
|
|
|
Corporate
Overhead
|
|
(1.5%)
|
|
|
|
(1.5%)
|
|
|
|
Total
|
|
11.8%
|
|
|
|
12.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2017
|
|
|
|
|
|
Reported
|
|
Acquisition-
Related
Charges1
|
|
Normalized2
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
284.5
|
|
$
17.3
|
|
$
301.8
|
|
|
|
Industrial
|
|
85.1
|
|
-
|
|
85.1
|
|
|
|
Security
|
|
50.7
|
|
0.2
|
|
50.9
|
|
|
|
Segment
Profit
|
|
420.3
|
|
17.5
|
|
437.8
|
|
|
|
Corporate
Overhead
|
|
(44.6)
|
|
-
|
|
(44.6)
|
|
|
|
Total
|
|
$
375.7
|
|
$
17.5
|
|
$
393.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Storage
|
|
15.0%
|
|
|
|
15.9%
|
|
|
|
Industrial
|
|
17.7%
|
|
|
|
17.7%
|
|
|
|
Security
|
|
10.5%
|
|
|
|
10.6%
|
|
|
|
Segment
Profit
|
|
14.7%
|
|
|
|
15.3%
|
|
|
|
Corporate
Overhead
|
|
(1.6%)
|
|
|
|
(1.6%)
|
|
|
|
Total
|
|
13.2%
|
|
|
|
13.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Acquisition-related
charges relate primarily to facility-related charges, integration
and consulting costs.
|
|
|
2
|
The normalized 2017
and 2018 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-1q-2018-results-300633505.html
SOURCE Stanley Black &
Decker