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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Stanley Black and Decker Inc | NYSE:SWK | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.81 | 0.95% | 85.80 | 88.3889 | 84.49 | 86.50 | 3,115,511 | 21:23:08 |
NEW BRITAIN, Conn., Oct. 24, 2019 /PRNewswire/ -- Stanley Black & Decker (NYSE: SWK) today announced third quarter 2019 financial results.
3Q'19 Key Points:
Stanley Black & Decker's President and CEO, James M. Loree, commented, "In the third quarter, we successfully delivered above-market organic growth and adjusted earnings per share expansion versus prior year, overcoming $90 million in external pre-tax margin headwinds and challenges in certain end markets.
"To position the business for success in 2020 and beyond, we have begun implementing new cost and pricing actions, as well as accelerating our $300 – $500 million multi-year margin resiliency initiative. These actions will preserve our ability to continue to generate continued earnings growth and manage externally driven volatility.
"Over the past three years we have produced strong organic growth and consistent adjusted EPS expansion, while absorbing approximately $900 million in pretax externally generated cost pressures (~6% of sales). We have also executed on multiple revenue growth catalysts, including Craftsman, revenue synergies, emerging markets, e-commerce and breakthrough innovations, that are generating success in the market and position us for continued share gains. It is a testament to our seasoned and capable management team and our SFS 2.0 operating system that we are successfully navigating this environment and continuing to achieve our vision: to become known as one of the world's great innovators, deliver top-quartile financial performance, and elevate our commitment to corporate social responsibility."
3Q'19 Segment Results | |||||||
($ in M) | |||||||
Sales | Profit | Charges1 | Profit | Profit | Profit Rate | ||
Tools & Storage | $2,534 | $410.1 | $11.4 | $421.5 | 16.2% | 16.6% | |
Industrial | $633 | $90.3 | $ 4.8 | $ 95.1 | 14.3% | 15.0% | |
Security | $466 | $33.1 | $17.6 | $ 50.7 | 7.1% | 10.9% |
1 | See Merger And Acquisition (M&A) Related And Other Charges On Page 5 |
Donald Allan Jr., Executive Vice President and CFO, commented, "Security generated modest organic growth in the quarter, resulting from targeted commercial investments as part of the ongoing business transformation. Within electronic security, the order rates and backlog are in strong positions and our cost efficiency initiatives continue to generate value. We are encouraged by this momentum and believe the business is positioned to generate positive organic growth and margin expansion in the fourth quarter and beyond."
2019 Outlook & Cost Reduction Program
Management is revising its 2019 EPS outlook to $6.50 - $6.60 from $7.50 - $7.70 on a GAAP basis primarily due to restructuring charges associated with the cost reduction program announced today, in addition to the factors below. The Company is reducing its adjusted EPS range to $8.35 - $8.45 from $8.50 - $8.70 and reiterating its free cash flow conversion estimate of approximately 85% - 90%. The cost reduction program is currently being implemented and is expected to deliver $200 million in annual cost savings with an approximate pre-tax restructuring charge of $150 million expected to be recognized primarily in 2019.
The following reflects the key assumption changes to the Company's prior full year adjusted EPS outlook:
Allan continued, "Our 2019 guidance now incorporates $445 million of externally generated input cost headwinds while continuing to reflect our delivery of above-market organic growth of 3.5% - 4% and low-single digit adjusted earnings per share growth. This will be a strong end to the year, especially given the magnitude and timing of the input cost moves, as well as the current market demand environment.
"As we shift to 2020, we believe we are taking the appropriate actions to protect our margins and our competitiveness while once again positioning the business for EPS expansion. We will continue to execute our playbook to take price, optimize our global supply chain and adjust our cost structure through the actions announced today and generate significant value with our margin resiliency program.
"The organization remains focused on strong day-to-day execution and operational excellence and we believe the Company is well-positioned to deliver sustained above-market organic growth with operating leverage, strong free cash flow conversion and top-quartile shareholder returns over the long-term."
The difference between 2019 GAAP and Adjusted EPS guidance is $1.85, consisting of acquisition-related and other charges. These forecasted charges primarily relate to restructuring, deal and integration costs, Security business transformation and margin resiliency initiatives, and inventory step-up amortization.
Merger And Acquisition ("M&A") Related And Other Charges
Total pre-tax M&A related and other charges in 3Q'19 were $113.7 million, primarily related to restructuring, deal and integration costs, as well as Security business transformation & margin resiliency initiatives. Gross margin included $5.3 million of these charges while SG&A included $37.3 million. Other, net and Restructuring included a net benefit of $3.5 million and charges of $74.6 million, respectively.
Share of net earnings of equity method investment included $5.4 million of charges related to an inventory step-up fair value adjustment.
The Company will host a conference call with investors today, October 24, 2019, 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 and an accompanying slide presentation will be available through a live webcast on the "Investors" section of Stanley Black & Decker's website, www.stanleyblackanddecker.com under the subheading "News & Events." The event can also be accessed by telephone within the U.S. at (877) 930-8285, from outside the U.S. at +1 (253) 336-8297. Please use the conference identification number 3792719. A replay will also be available two hours after the call and can be accessed on the "Investors" section of Stanley Black & Decker's website, or at (855) 859-2056 / +1 (404) 537-3406 using the passcode 3792719. 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
Cort Kaufman
Director, Investor Relations
cort.kaufman@sbdinc.com
(860) 515-2741
Media Contacts:
Shannon Lapierre
Vice President, Communications & Public Relations
shannon.lapierre@sbdinc.com
(860) 827-3575
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 to 15, is considered relevant to aid analysis of the Company's margin and earnings results aside from the material impact of the M&A related and other charges.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
This document contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are "forward-looking statements" for purposes of federal and state securities laws, including any projections or guidance of earnings, revenue or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements concerning proposed new products, services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements may include, among other, the words "may," "will," "estimate," "intend," "continue," "believe," "expect," "anticipate" or any other similar words.
Although the Company believes that the expectations reflected in any of its forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of its forward-looking statements. The Company's future financial condition and results of operations, as well as any forward-looking statements, are subject to change and to inherent risks and uncertainties, such as those disclosed or incorporated by reference in the Company's filings with the Securities and Exchange Commission.
Important factors that could cause the Company's actual results, performance and achievements, or industry results to differ materially from estimates or projections contained in its forward-looking statements include, among others, the following: (i) successfully developing, marketing and achieving sales from new products and services and the continued acceptance of current products and services; (ii) macroeconomic factors, including global and regional business conditions (such as Brexit), commodity prices, inflation, and currency exchange rates; (iii) laws, regulations and governmental policies affecting the Company's activities in the countries where it does business, including those related to tariffs, taxation, and trade controls, including section 301 tariffs and section 232 steel and aluminum tariffs; (iv) the economic environment of emerging markets, particularly Latin America, Russia, China and Turkey; (v) realizing the anticipated benefits of mergers, acquisitions, joint ventures, strategic alliances or divestitures; (vi) pricing pressure and other changes within competitive markets; (vii) availability and price of raw materials, component parts, freight, energy, labor and sourced finished goods; (viii) the impact the tightened credit markets may have on the Company or its customers or suppliers; (ix) 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; (x) the Company's ability to identify and effectively execute productivity improvements and cost reductions; (xi) potential business and distribution disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (xii) the continued consolidation of customers, particularly in consumer channels; (xiii) managing franchisee relationships; (xiv) the impact of poor weather conditions; (xv) maintaining or improving production rates in the Company's manufacturing facilities, responding to significant changes in product demand and fulfilling demand for new and existing products; (xvi) changes in the competitive landscape in the Company's markets; (xvii) the Company's non-U.S. operations, including sales to non-U.S. customers; (xviii) the impact from demand changes within world-wide markets associated with homebuilding and remodeling; (xix) potential adverse developments in new or pending litigation and/or government investigations; (xx) changes in the Company's ability to obtain debt on commercially reasonable terms and at competitive rates; (xxi) substantial pension and other postretirement benefit obligations; (xxii) potential environmental liabilities; (xxiii) work stoppages or other labor disruptions; and (xxiv) changes in accounting estimates.
Additional factors that could cause actual results to differ materially from forward-looking statements are set forth in the Annual Report on Form 10-K and in the Quarterly Report on Form 10-Q, including under the heading "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and in the Consolidated Financial Statements and the related Notes.
Forward-looking statements in this press release speak only as of the date hereof, and forward-looking statements in documents attached that are incorporated by reference speak only as of the date of those documents. The Company does not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law.
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
(Unaudited, Millions of Dollars Except Per Share Amounts) | ||||||||||
THIRD QUARTER | YEAR-TO-DATE | |||||||||
2019 | 2018 | 2019 | 2018 | |||||||
NET SALES | $ 3,633.1 | $ 3,494.8 | $ 10,728.0 | $ 10,347.7 | ||||||
COSTS AND EXPENSES | ||||||||||
Cost of sales | 2,393.6 | 2,256.4 | 7,083.1 | 6,656.5 | ||||||
Gross margin | 1,239.5 | 1,238.4 | 3,644.9 | 3,691.2 | ||||||
% of Net Sales | 34.1% | 35.4% | 34.0% | 35.7% | ||||||
Selling, general and administrative | 756.1 | 798.9 | 2,317.3 | 2,390.3 | ||||||
% of Net Sales | 20.8% | 22.9% | 21.6% | 23.1% | ||||||
Operating margin | 483.4 | 439.5 | 1,327.6 | 1,300.9 | ||||||
% of Net Sales | 13.3% | 12.6% | 12.4% | 12.6% | ||||||
Other - net | 55.0 | 59.4 | 182.6 | 236.7 | ||||||
(Gain) loss on sales of businesses | - | - | (17.2) | 0.8 | ||||||
Restructuring charges | 74.0 | 21.8 | 91.2 | 58.1 | ||||||
Income from operations | 354.4 | 358.3 | 1,071.0 | 1,005.3 | ||||||
Interest - net | 59.7 | 53.4 | 177.8 | 154.2 | ||||||
EARNINGS BEFORE INCOME TAXES AND EQUITY INTEREST | 294.7 | 304.9 | 893.2 | 851.1 | ||||||
Income taxes | 59.2 | 56.6 | 135.5 | 139.3 | ||||||
NET EARNINGS BEFORE EQUITY INTEREST | 235.5 | 248.3 | 757.7 | 711.8 | ||||||
Share of net (losses) earnings of equity method investment | (4.4) | - | 1.2 | - | ||||||
NET EARNINGS | 231.1 | 248.3 | 758.9 | 711.8 | ||||||
Less: net gain (loss) attributable to non-controlling interests | 0.6 | 0.5 | 2.2 | (0.2) | ||||||
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS | $ 230.5 | $ 247.8 | $ 756.7 | $ 712.0 | ||||||
EARNINGS PER SHARE OF COMMON STOCK | ||||||||||
Basic | $ 1.55 | $ 1.67 | $ 5.11 | $ 4.77 | ||||||
Diluted | $ 1.53 | $ 1.65 | $ 5.03 | $ 4.68 | ||||||
DIVIDENDS PER SHARE | $ 0.69 | $ 0.66 | $ 2.01 | $ 1.92 | ||||||
WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||
Basic | 148,350 | 147,964 | 148,111 | 149,311 | ||||||
Diluted | 150,623 | 150,599 | 150,299 | 152,225 | ||||||
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||
(Unaudited, Millions of Dollars) | |||||
September 28, | December 29, | ||||
2019 | 2018 | ||||
ASSETS | |||||
Cash and cash equivalents | $ 311.7 | $ 288.7 | |||
Accounts and notes receivable, net | 1,902.6 | 1,607.8 | |||
Inventories, net | 2,743.5 | 2,373.5 | |||
Other current assets | 370.2 | 299.4 | |||
Total current assets | 5,328.0 | 4,569.4 | |||
Property, plant and equipment, net | 1,911.9 | 1,915.2 | |||
Goodwill and other intangibles, net | 12,813.0 | 12,441.1 | |||
Other assets | 1,269.6 | 482.3 | |||
Total assets | $ 21,322.5 | $ 19,408.0 | |||
LIABILITIES AND SHAREOWNERS' EQUITY | |||||
Short-term borrowings | $ 1,454.9 | $ 376.1 | |||
Current maturities of long-term debt | 3.1 | 2.5 | |||
Accounts payable | 2,070.3 | 2,233.2 | |||
Accrued expenses | 1,913.6 | 1,389.8 | |||
Total current liabilities | 5,441.9 | 4,001.6 | |||
Long-term debt | 3,908.8 | 3,819.8 | |||
Other long-term liabilities | 3,703.6 | 3,746.7 | |||
Stanley Black & Decker, Inc. shareowners' equity | 8,262.3 | 7,836.2 | |||
Non-controlling interests' equity | 5.9 | 3.7 | |||
Total liabilities and shareowners' equity | $ 21,322.5 | $ 19,408.0 |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES | ||||||||||||
SUMMARY OF CASH FLOW ACTIVITY | ||||||||||||
(Unaudited, Millions of Dollars) | ||||||||||||
THIRD QUARTER | YEAR-TO-DATE | |||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||
OPERATING ACTIVITIES | ||||||||||||
Net earnings | $ 231.1 | $ 248.3 | $ 758.9 | $ 711.8 | ||||||||
Depreciation and amortization | 140.9 | 129.7 | 420.4 | 381.0 | ||||||||
(Gain) loss on sales of businesses | - | - | (17.2) | 0.8 | ||||||||
Share of net losses (earnings) of equity method investment | 4.4 | - | (1.2) | - | ||||||||
Changes in working capital1 | (278.3) | (287.8) | (859.2) | (1,017.1) | ||||||||
Other | 94.6 | 101.3 | (39.3) | (36.4) | ||||||||
Net cash provided by operating activities | 192.7 | 191.5 | 262.4 | 40.1 | ||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||
Capital and software expenditures | (96.7) | (109.4) | (283.5) | (327.4) | ||||||||
(Payments) proceeds from sales of businesses, net of cash sold | - | (1.1) | 76.7 | (3.0) | ||||||||
Business acquisitions, net of cash acquired | (6.2) | (15.1) | (682.2) | (521.9) | ||||||||
Purchases of investments | (4.9) | (5.8) | (258.6) | (16.1) | ||||||||
Payments on long-term debt | - | - | (400.0) | - | ||||||||
Proceeds from debt issuance, net of fees | - | - | 496.2 | - | ||||||||
Stock purchase contract fees | (10.1) | (10.1) | (30.3) | (30.3) | ||||||||
Net short-term borrowings | 28.6 | 309.5 | 1,117.9 | 1,445.1 | ||||||||
Premium paid on equity option | - | - | - | (57.3) | ||||||||
Proceeds from issuances of common stock | 21.5 | 10.2 | 46.1 | 32.8 | ||||||||
Purchases of common stock for treasury | (2.7) | (301.8) | (11.9) | (514.5) | ||||||||
Cash dividends on common stock | (102.3) | (97.4) | (297.6) | (286.5) | ||||||||
Effect of exchange rate changes on cash | (25.4) | 5.8 | (20.4) | (54.1) | ||||||||
Other | 5.0 | (11.0) | (1.8) | 6.7 | ||||||||
Net cash used in investing and financing activities | (193.2) | (226.2) | (249.4) | (326.5) | ||||||||
(Decrease) increase in cash, cash equivalents and restricted cash | (0.5) | (34.7) | 13.0 | (286.4) | ||||||||
Cash, cash equivalents and restricted cash, beginning of period | 324.9 | 403.4 | 311.4 | 655.1 | ||||||||
Cash, cash equivalents and restricted cash, end of period | $ 324.4 | $ 368.7 | $ 324.4 | $ 368.7 | ||||||||
Free Cash Flow Computation2 | ||||||||||||
Operating cash flow | $ 192.7 | $ 191.5 | $ 262.4 | $ 40.1 | ||||||||
Less: capital and software expenditures | (96.7) | (109.4) | (283.5) | (327.4) | ||||||||
Free cash flow (before dividends) | $ 96.0 | $ 82.1 | $ (21.1) | $ (287.3) | ||||||||
Reconciliation of Cash, Cash Equivalents and Restricted Cash | ||||||||||||
September 28, 2019 | December 29, 2018 | |||||||||||
Cash and cash equivalents | $ 311.7 | $ 288.7 | ||||||||||
Restricted cash included in Other current assets | 12.7 | 22.7 | ||||||||||
Cash, cash equivalents and restricted cash | $ 324.4 | $ 311.4 | ||||||||||
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) | |||||||||
THIRD QUARTER | YEAR-TO-DATE | ||||||||
2019 | 2018 | 2019 | 2018 | ||||||
NET SALES | |||||||||
Tools & Storage | $ 2,534.0 | $ 2,448.0 | $ 7,452.3 | $ 7,231.6 | |||||
Industrial | 632.7 | 562.0 | 1,837.6 | 1,639.3 | |||||
Security | 466.4 | 484.8 | 1,438.1 | 1,476.8 | |||||
Total | $ 3,633.1 | $ 3,494.8 | $ 10,728.0 | $ 10,347.7 | |||||
SEGMENT PROFIT | |||||||||
Tools & Storage | $ 410.1 | $ 356.2 | $ 1,115.9 | $ 1,056.2 | |||||
Industrial | 90.3 | 88.4 | 256.4 | 254.4 | |||||
Security | 33.1 | 47.4 | 110.6 | 141.0 | |||||
Segment Profit | 533.5 | 492.0 | 1,482.9 | 1,451.6 | |||||
Corporate Overhead | (50.1) | (52.5) | (155.3) | (150.7) | |||||
Total | $ 483.4 | $ 439.5 | $ 1,327.6 | $ 1,300.9 | |||||
Segment Profit as a Percentage of Net Sales | |||||||||
Tools & Storage | 16.2% | 14.6% | 15.0% | 14.6% | |||||
Industrial | 14.3% | 15.7% | 14.0% | 15.5% | |||||
Security | 7.1% | 9.8% | 7.7% | 9.5% | |||||
Segment Profit | 14.7% | 14.1% | 13.8% | 14.0% | |||||
Corporate Overhead | (1.4%) | (1.5%) | (1.4%) | (1.5%) | |||||
Total | 13.3% | 12.6% | 12.4% | 12.6% | |||||
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) | ||||||||
THIRD QUARTER 2019 | ||||||||
Reported |
| Normalized3 | ||||||
Gross margin | $ 1,239.5 | $ 5.3 | $ 1,244.8 | |||||
% of Net Sales | 34.1% | 34.3% | ||||||
Selling, general and administrative | 756.1 | (37.3) | 718.8 | |||||
% of Net Sales | 20.8% | 19.8% | ||||||
Operating margin | 483.4 | 42.6 | 526.0 | |||||
% of Net Sales | 13.3% | 14.5% | ||||||
Earnings before income taxes and equity interest | 294.7 | 113.7 | 408.4 | |||||
Income taxes | 59.2 | 28.6 | 87.8 | |||||
Share of net (losses) earnings of equity method investment | (4.4) | 5.4 | 1.0 | |||||
Net earnings attributable to common shareowners | 230.5 | 90.5 | 321.0 | |||||
Diluted earnings per share of common stock | $ 1.53 | $ 0.60 | $ 2.13 | |||||
1 | Acquisition-related charges and other relates primarily to restructuring, Security business transformation and margin resiliency initiatives. | |||||||
THIRD QUARTER 2018 | ||||||||
Reported |
| Normalized3 | ||||||
Gross margin | $ 1,238.4 | $ 3.3 | $ 1,241.7 | |||||
% of Net Sales | 35.4% | 35.5% | ||||||
Selling, general and administrative | 798.9 | (63.6) | 735.3 | |||||
% of Net Sales | 22.9% | 21.0% | ||||||
Operating margin | 439.5 | 66.9 | 506.4 | |||||
% of Net Sales | 12.6% | 14.5% | ||||||
Earnings before income taxes | 304.9 | 85.4 | 390.3 | |||||
Income taxes | 56.6 | 19.5 | 76.1 | |||||
Net earnings attributable to common shareowners | 247.8 | 65.9 | 313.7 | |||||
Diluted earnings per share of common stock | $ 1.65 | $ 0.43 | $ 2.08 | |||||
2 | Acquisition-related charges and other relates primarily to inventory step-up, integration and consulting costs, and a non-cash fair value adjustment. | |||||||
3 | The normalized 2019 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 and other charges. |
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) | ||||||||
YEAR-TO-DATE 2019 | ||||||||
Reported | Acquisition- | Normalized3 | ||||||
Gross margin | $ 3,644.9 | $ 22.4 | $ 3,667.3 | |||||
% of Net Sales | 34.0% | 34.2% | ||||||
Selling, general and administrative | 2,317.3 | (86.9) | 2,230.4 | |||||
% of Net Sales | 21.6% | 20.8% | ||||||
Operating margin | 1,327.6 | 109.3 | 1,436.9 | |||||
% of Net Sales | 12.4% | 13.4% | ||||||
Earnings before income taxes and equity interest | 893.2 | 199.2 | 1,092.4 | |||||
Income taxes | 135.5 | 40.1 | 175.6 | |||||
Share of net earnings of equity method investment | 1.2 | 19.0 | 20.2 | |||||
Net earnings attributable to common shareowners | 756.7 | 178.1 | 934.8 | |||||
Diluted earnings per share of common stock | $ 5.03 | $ 1.19 | $ 6.22 | |||||
1 | Acquisition-related charges and other relates primarily to restructuring, deal and integration costs, Security business transformation, margin resiliency initiatives, and a gain on a sale of a business. | |||||||
YEAR-TO-DATE 2018 | ||||||||
Reported | Acquisition- | Normalized3 | ||||||
Gross margin | $ 3,691.2 | $ 13.8 | $ 3,705.0 | |||||
% of Net Sales | 35.7% | 35.8% | ||||||
Selling, general and administrative | 2,390.3 | (105.5) | 2,284.8 | |||||
% of Net Sales | 23.1% | 22.1% | ||||||
Operating margin | 1,300.9 | 119.3 | 1,420.2 | |||||
% of Net Sales | 12.6% | 13.7% | ||||||
Earnings before income taxes | 851.1 | 237.2 | 1,088.3 | |||||
Income taxes | 139.3 | 30.0 | 169.3 | |||||
Net earnings attributable to common shareowners | 712.0 | 207.2 | 919.2 | |||||
Diluted earnings per share of common stock | $ 4.68 | $ 1.36 | $ 6.04 | |||||
2 | Acquisition-related charges and other relates primarily to inventory step-up, integration and consulting costs, a non-cash fair value adjustment, an environmental remediation settlement, and a tax charge related to the enactment of new U.S. tax legislation. | |||||||
3 | The normalized 2019 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 and other charges. |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES | |||||||||
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING | |||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||
(Unaudited, Millions of Dollars) | |||||||||
THIRD QUARTER 2019 | |||||||||
Reported | Acquisition- | Normalized3 | |||||||
SEGMENT PROFIT | |||||||||
Tools & Storage | $ 410.1 | $ 11.4 | $ 421.5 | ||||||
Industrial | 90.3 | 4.8 | 95.1 | ||||||
Security | 33.1 | 17.6 | 50.7 | ||||||
Segment Profit | 533.5 | 33.8 | 567.3 | ||||||
Corporate Overhead | (50.1) | 8.8 | (41.3) | ||||||
Total | $ 483.4 | $ 42.6 | $ 526.0 | ||||||
Segment Profit as a Percentage of Net Sales | |||||||||
Tools & Storage | 16.2% | 16.6% | |||||||
Industrial | 14.3% | 15.0% | |||||||
Security | 7.1% | 10.9% | |||||||
Segment Profit | 14.7% | 15.6% | |||||||
Corporate Overhead | (1.4%) | (1.1%) | |||||||
Total | 13.3% | 14.5% | |||||||
1 | Acquisition-related and other charges relate primarily to Security business transformation and margin resiliency initiatives. | ||||||||
THIRD QUARTER 2018 | |||||||||
Reported | Acquisition- | Normalized3 | |||||||
SEGMENT PROFIT | |||||||||
Tools & Storage | $ 356.2 | $ 49.7 | $ 405.9 | ||||||
Industrial | 88.4 | 6.2 | 94.6 | ||||||
Security | 47.4 | 6.6 | 54.0 | ||||||
Segment Profit | 492.0 | 62.5 | 554.5 | ||||||
Corporate Overhead | (52.5) | 4.4 | (48.1) | ||||||
Total | $ 439.5 | $ 66.9 | $ 506.4 | ||||||
Segment Profit as a Percentage of Net Sales | |||||||||
Tools & Storage | 14.6% | 16.6% | |||||||
Industrial | 15.7% | 16.8% | |||||||
Security | 9.8% | 11.1% | |||||||
Segment Profit | 14.1% | 15.9% | |||||||
Corporate Overhead | (1.5%) | (1.4%) | |||||||
Total | 12.6% | 14.5% | |||||||
2 | Acquisition-related charges relate primarily to inventory step-up, integration and consulting costs, and a non-cash fair value adjustment. | ||||||||
3 | The normalized 2019 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 and other charges. |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES | |||||||||
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING | |||||||||
NON-GAAP FINANCIAL MEASURES | |||||||||
(Unaudited, Millions of Dollars) | |||||||||
YEAR-TO-DATE 2019 | |||||||||
Reported | Acquisition- | Normalized3 | |||||||
SEGMENT PROFIT | |||||||||
Tools & Storage | $ 1,115.9 | $ 31.5 | $ 1,147.4 | ||||||
Industrial | 256.4 | 22.1 | 278.5 | ||||||
Security | 110.6 | 44.7 | 155.3 | ||||||
Segment Profit | 1,482.9 | 98.3 | 1,581.2 | ||||||
Corporate Overhead | (155.3) | 11.0 | (144.3) | ||||||
Total | $ 1,327.6 | $ 109.3 | $ 1,436.9 | ||||||
Segment Profit as a Percentage of Net Sales | |||||||||
Tools & Storage | 15.0% | 15.4% | |||||||
Industrial | 14.0% | 15.2% | |||||||
Security | 7.7% | 10.8% | |||||||
Segment Profit | 13.8% | 14.7% | |||||||
Corporate Overhead | (1.4%) | (1.3%) | |||||||
Total | 12.4% | 13.4% | |||||||
1 | Acquisition-related and other charges relate primarily to integration costs, Security business transformation and margin resiliency initiatives. | ||||||||
YEAR-TO-DATE 2018 | |||||||||
Reported | Acquisition- | Normalized3 | |||||||
SEGMENT PROFIT | |||||||||
Tools & Storage | $ 1,056.2 | $ 82.2 | $ 1,138.4 | ||||||
Industrial | 254.4 | 19.1 | 273.5 | ||||||
Security | 141.0 | 9.9 | 150.9 | ||||||
Segment Profit | 1,451.6 | 111.2 | 1,562.8 | ||||||
Corporate Overhead | (150.7) | 8.1 | (142.6) | ||||||
Total | $ 1,300.9 | $ 119.3 | $ 1,420.2 | ||||||
Segment Profit as a Percentage of Net Sales | |||||||||
Tools & Storage | 14.6% | 15.7% | |||||||
Industrial | 15.5% | 16.7% | |||||||
Security | 9.5% | 10.2% | |||||||
Segment Profit | 14.0% | 15.1% | |||||||
Corporate Overhead | (1.5%) | (1.4%) | |||||||
Total | 12.6% | 13.7% | |||||||
2 | Acquisition-related charges relate primarily to inventory step-up, integration and consulting costs, and a non-cash fair value adjustment. | ||||||||
3 | The normalized 2019 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 and other charges. |
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SOURCE Stanley Black & Decker
Copyright 2019 PR Newswire
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