[October 22, 2014] |
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Stanley Black & Decker Reports 3Q 2014 Results
NEW BRITAIN, Conn. --(Business Wire)--
Stanley Black & Decker (NYSE: SWK) today announced third
quarter 2014 financial results.
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3Q'14 Revenues Up 5% To $2.9 Billion; Organic Growth Of 6%
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Operating Margin Expanded 230 Basis Points To 13.8%; Excluding
Charges, Operating Margin Expanded 120 Basis Points To 14.1%
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3Q'14 Diluted GAAP EPS Was $1.50; Excluding Charges, 3Q'14 Diluted EPS
Was $1.55
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CDIY Achieved 10% Organic Growth; Record Operating Margin Of 16.5%,
Excluding Charges
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Increasing 2014 Full Year Free Cash Flow Guidance To Approximately
$800 Million From At Least $675 Million
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Reiterating Mid-Point While Tightening 2014 Full Year EPS Guidance
Range Of $5.40 To $5.46 On A GAAP Basis ($5.52 To $5.58, Excluding
Charges)
3Q'14 Key Points:
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Net sales for the period were $2.9 billion, up 5% versus the prior
year, primarily attributable to volume (+5%) and price (+1%),
partially offset by currency (-1%).
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The gross margin rate for the quarter was 36.2%. Excluding charges the
gross margin rate was also 36.2%, up 20 basis points from the prior
year rate of 36.0%, as favorable volume, price, productivity and cost
actions more than offset unfavorable currency and lower Security
margins.
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SG&A expenses were 22.4% of sales. Excluding charges, SG&A expenses
were 22.1% of sales, compared to 23.1% in 3Q'13.
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Operating margin rate was 13.8%. Excluding charges, operating margin
rate was 14.1%, up 120 basis points from 3Q'13, as actions taken to
improve profitability and generate operating leverage more than offset
slightly higher than expected unfavorable currency.
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The tax rate was 19.1%. Excluding charges, the tax rate was 18.8% due
to a larger portion of earnings in lower taxed jurisdictions and
changes in required foreign tax reserves due to statute expirations.
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Working capital turns for the quarter were 6.4, up 0.5 turns from
3Q'13. Free cash flow for the quarter was $189 million, a $178 million
increase over 3Q'13.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented,
"Our strong third quarter results demonstrate the benefits of our focus
on driving organic growth, margin expansion and operating leverage
through new product vitality accompanied by diligent price and cost
management. These efforts have allowed us to maintain operating momentum
while overcoming persistent challenges relating to currency and a
volatile macro backdrop, particularly within emerging markets. During
the quarter, our CDIY and Industrial businesses posted impressive top
and bottom line results, and Security continued to make progress on its
multi-year business transformation. Strong underlying growth, earnings
and cash flow momentum position us well for the future."
3Q'14 Segment Results
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($ in M)
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3Q' 14 Segment Results
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Sales
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Profit
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Charges1
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Profit Ex- Charges1
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Profit Rate
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Profit Rate Ex- Charges1
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CDIY
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$1,454
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$239.7
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$0.1
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$239.8
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16.5%
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16.5%
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Industrial
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$866
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$136.2
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$1.2
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$137.4
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15.7%
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15.9%
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Security
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$582
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$63.9
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$0.3
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$64.2
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11.0%
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11.0%
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1 See Merger And Acquisition (M&A) One-Time Charges On Page 5
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CDIY net sales increased 9% versus 3Q'13 as a result of volume (+9%)
and price (+1%), partially offset by currency (-1%). Organic growth in
North America (+12%) recovered from a second quarter negatively
impacted by poor weather while Europe continued its momentum, growing
11% organically. North American volume benefitted from strong
underlying tool demand driven by new products as well as expanded
retail offerings and partnerships. In addition, outdoor product volume
was stronger than expected as some of the volume lost in the second
quarter due to cold weather was recovered this quarter. Europe
maintained its strong quarterly organic growth momentum attributable
to continued market share gains from new product introductions and an
expanded retail footprint. Organic growth within the emerging markets
was up 2% as Latin America, Russia and Turkey, among others, remain
challenged. Excluding charges, overall segment profit rate was a
record 16.5%, up from the 3Q'13 rate of 15.1%, as volume leverage,
price, productivity and cost management more than offset currency
pressures.
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Industrial net sales increased 5% versus 3Q'13 as a result of volume
(+4%) and price (+1%). Organic sales for the Industrial and Automotive
Repair ("IAR") business were up 7% with strength in both North America
and Europe. Engineered Fastening achieved 5% organic growth driven
primarily by strong global automotive revenues in excess of global
light vehicle production. Infrastructure organic growth was down 1% as
solid hydraulic tools growth was offset by the expected slowdown in
on-shore oil & gas activity and project delays due to the geopolitical
situations in Russia, Ukraine and the Middle East. Overall Industrial
segment profit rate excluding charges was 15.9%, up 170 basis points
from the 3Q'13 rate of 14.2% reflecting favorable volume leverage,
productivity gains, and cost control, partially offset by currency.
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Security net sales decreased 3% versus 3Q'13 as lower volume (-3%) and
currency (-1%) were partially offset by price (+1%). Organic growth
within North America and emerging markets ("NA & EM") increased 1% as
commercial electronics and automatic doors provided uplift. Europe
declined 7% organically due to continued lower installation and
recurring revenues in various regions, most notably Southern Europe.
Europe order rates were up high single digits for the quarter and
attrition levels improved sequentially remaining within the target
range of 10%-12%.
Security segment profit rate excluding charges was 11.0%, consistent
with the 2Q'14 rate and down 120 basis points from the 3Q'13 rate of
12.2%. The year-over-year decrease in the rate resulted from volume
deleveraging and lower recurring revenue mix in Europe as well as
project mix within North America. Southern Europe's results adversely
impacted the year over year rate decline for the overall Security
segment by approximately 70 basis points.
President and Chief Operating Officer, James M. Loree, commented, "We
again posted a solid quarter of organic growth and margin expansion
along with strong cash flow. CDIY organic growth accelerated in the
third quarter, contributing to record operating margin, and Industrial
posted strong results as a result of robust sales and operating leverage
in Engineered Fastening and IAR. Company-wide, emerging markets growth
was positive for the quarter despite a choppy and slowing environment.
Our mid-price point product launches position us for continued share
gain in these somewhat slower markets.
"There were encouraging signs with respect to the Security business.
Europe's OM and order growth rates increased sequentially despite the
ongoing challenges present in Southern Europe, while the momentum in CSS
North America's Vertical Solutions continued to grow. To ensure on-going
progress, we expect to complete our review of the strategic alternatives
for Southern Europe during 4Q'14 while implementing selected leadership
adjustments within NA and EM to tighten execution and facilitate the
global rollout of the Vertical Solutions."
Updated 2014 Outlook And Initial 2015 Commentary
Donald Allan Jr., Senior Vice President and CFO, commented, "We are
reiterating the mid-point while tightening our previously communicated
2014 EPS outlook range to $5.52 - $5.58 on an adjusted basis or $5.40 -
$5.46 on a GAAP basis. The mid-point of our full year EPS outlook
remains unchanged as we expect the stronger than expected operational
performance including our continued focus on indirect cost control and
price management to offset the unfavorable impact of the current
challenging macro environment, which is causing further currency
pressure. We now estimate the full year currency impact to be
approximately $75 million, up from our prior estimate of $60 million. In
addition, we are raising our 2014 free cash flow estimate to
approximately $800 million from the prior estimate of at least $675
million as we expect lower one-time restructuring payments, solid
working capital performance, and slightly lower levels of capital
expenditures.
"While it is premature to provide detail guidance for 2015 at this time,
the continued strengthening of the U.S. dollar and slowing emerging
market economic growth is a known headwind of approximately $50 - $75
million to 2015 operating margin growth. However, we have a demonstrated
track record of responding to these types of currency and macro economic
pressures with surgical cost reduction actions. In this regard, we are
currently considering several initiatives which would largely, if not
completely, offset these headwinds. Such actions, if taken, would likely
require additional restructuring charges of $10 - $25 million in excess
of our current 2014 estimate of $25 million."
The Company remains committed to its capital allocation plan of modest
debt deleveraging in 2014, returning up to $1 billion of capital to
shareholders through 2015, and supporting a strong and growing dividend.
These actions combined with near-term operational improvements are
expected to improve cash flow return on investment by approximately 250
basis points through 2015.
Merger And Acquisition (M&A) One-Time Charges
Total one-time charges in 3Q'14 of $8.4 million (net of a $0.2 million
restructuring credit) primarily relate to integration and consulting
costs. Gross margin includes $0.1 million of these one-time charges
while SG&A includes $8.1 million. $1.6 million of these costs that
impact the Company's operating margin are included in segment results,
with the remainder in corporate overhead. Also included in one-time
charges are $0.4 million in Other, net.
The Company will host a conference call with investors today, Wednesday,
October 22, at 8:00am ET. A slide presentation which will accompany the
call will be available at www.stanleyblackanddecker.com
and will remain available after the call.
You can also access the slides via the Stanley Black & Decker Investor
Relations iPad & iPhone app from the Apple App Store by searching for
"SWK Investor Relations".
The call will be accessible by telephone at 1 (800) 708-4540, from
outside the U.S. at +1 (847) 619-6397, and via the Internet at www.stanleyblackanddecker.com.
To participate, please register on the web site at least fifteen minutes
prior to the call and download and install any necessary audio software.
Please use the conference identification number 3821-2772. A replay will
also be available two hours after the call and can be accessed at 1
(888) 843-7419 or +1 (630) 652-3042 using the passcode 3821-2772#. 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, mechanical
access solutions and electronic security solutions, healthcare
solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.
These results reflect the Company's continuing operations. In 3Q'13, the
Company classified two small businesses within the Security and
Industrial segments as held for sale based on management's intention to
sell these businesses. The business within the Industrial segment was
sold in February 2014. The operating results of the business within the
Industrial segment, including the loss on sale, have been reported as
discontinued operations for 3Q'13. The operating results of the business
within the Security segment have been reported as discontinued
operations for 3Q'14 and 3Q'13. Total sales reported as discontinued
operations were $5.2 million and $8.9 million for 3Q'14 and 3Q'13,
respectively.
The Company recast 2013 segment net sales and profit between the CDIY
and Industrial segments to align reporting with the current management
of the Company's operations in the emerging markets to be comparable
with the current year presentation. There is no impact to the
consolidated financial statements of the Company as a result of this
segment realignment.
Organic sales growth is defined as total sales growth less the sales of
companies acquired 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. The
normalized statement of operations and business segment information, as
reconciled to GAAP on pages 12 to 15 for 2014 and 2013, are considered
relevant to aid analysis of the Company's operating performance and
earnings results aside from the material impact of the one-time charges
and payments associated with the Black & Decker merger, the Niscayah and
Infastech acquisitions and other smaller acquisitions of the Company.
Normalized free cash flow, as reconciled from the associated GAAP
measures on page 10 for 2014 and 2013 is considered a meaningful pro
forma metric to aid the understanding of the Company's cash flow
performance aside from the material impact of the M&A-related payments
and charges.
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 2014 diluted EPS of $5.52 - $5.58 ($5.40 - $5.46 on a GAAP
basis); (ii) generate approximately $800 million of free cash flow for
2014 ; (iii) return up to $1 billion of capital to shareholders through
2015 and deliver a strong and growing dividend; and (iv) improve our
cash flow return on investment by 250 basis points through 2015
(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 execute its integration plans and
achieve synergies primarily from the Infastech acquisition sufficient to
generate $0.10 of EPS accretion in 2014; (ii) the Company's ability to
generate organic net sales increases of approximately 3-4% in 2014;
(iii) the Company's ability to continue to identify and execute upon
sales opportunities to increase its CDIY, IAR and Security businesses in
the emerging markets while minimizing associated costs; (iv) the
Company's ability to achieve a tax rate of approximately 21% in 2014;
(v) the Company's ability to hold margins in the Security business to a
modest decrease for 2014; (vi) the Company's ability to execute cost
reduction actions and control indirect expenses; (vii) the Company's
ability to limit one-time restructuring charges to $25 million in 2014;
(viii) full year 2014 operating margin currency impact of approximately
$75 million; (ix) successful integration of acquisitions completed in
2012 and 2013, and any additional acquisitions completed during the
year, as well as integration of existing businesses; (x) the continued
acceptance of technologies used in the Company's products and services;
(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; (xxiii) the Company's
ability to successfully develop, market and achieve sales from new
products and services; and (xxiv) the availability of cash to repurchase
shares when conditions are right.
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 increases generated by, for
example, increases in the cost of energy or significant Chinese Renminbi
or other currency fluctuations; (vi) the geographic distribution of the
Company's earnings; (vii) the commitment to and success of the Stanley
Fulfillment System; 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; the economic environment of
emerging markets, particularly Latin America, Russia and Turkey; pricing
pressure and other changes within competitive markets; the continued
consolidation of customers particularly in consumer channels; inventory
management pressures on the Company's customers; the impact the
tightened credit markets may have on the Company or its customers or
suppliers; the extent to which the Company has to write off accounts
receivable or assets or experiences supply chain disruptions in
connection with bankruptcy filings by customers or suppliers; increasing
competition; changes in laws, regulations and policies that affect the
Company, including, but not limited to trade, monetary, tax and fiscal
policies and laws; the timing and extent of any inflation or deflation;
the impact of poor weather conditions on sales; currency exchange
fluctuations; the impact of dollar/foreign currency exchange and
interest rates on the competitiveness of products and the Company's debt
program; the strength of the U.S. and European economies; the extent to
which world-wide markets associated with homebuilding and remodeling
stabilize and rebound; the impact of events that cause or may cause
disruption in the Company's supply, manufacturing, distribution and
sales networks such as war, terrorist activities, and political unrest;
and recessionary or expansive trends in the economies of the world in
which the Company operates. The Company undertakes no obligation to
publicly update or revise any forward-looking statements to reflect
events or circumstances that may arise after the date hereof.
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STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
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(Unaudited, Millions of Dollars Except Per Share Amounts)
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THIRD QUARTER
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YEAR TO DATE
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2014
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2013
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2014
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2013
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NET SALES
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$
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2,902.2
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$
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2,758.3
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$
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8,427.2
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$
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8,091.7
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COSTS AND EXPENSES
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Cost of sales
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1,852.1
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1,770.7
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5,363.6
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5,189.9
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Gross margin
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1,050.1
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987.6
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3,063.6
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2,901.8
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% of Net Sales
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36.2
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%
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35.8
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%
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36.4
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%
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35.9
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%
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Selling, general and administrative
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650.2
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669.6
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1,960.8
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2,011.5
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% of Net Sales
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22.4
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%
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24.3
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%
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23.3
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%
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24.9
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%
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Operating margin
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399.9
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318.0
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1,102.8
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890.3
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% of Net Sales
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13.8
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%
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11.5
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%
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13.1
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%
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11.0
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%
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Other - net
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61.8
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66.6
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182.0
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208.8
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Restructuring (credits) charges
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(0.2
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28.5
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(5.6
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40.6
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Income from operations
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338.3
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222.9
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926.4
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640.9
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Interest - net
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40.4
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36.1
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121.6
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109.1
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EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
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297.9
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186.8
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804.8
|
|
|
|
|
|
531.8
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
56.8
|
|
|
|
|
|
17.3
|
|
|
|
|
|
177.3
|
|
|
|
|
|
80.3
|
|
|
NET EARNINGS FROM CONTINUING OPERATIONS
|
|
|
|
|
|
241.1
|
|
|
|
|
|
169.5
|
|
|
|
|
|
627.5
|
|
|
|
|
|
451.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net (loss) earnings attributable to non-controlling interests
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
0.8
|
|
|
|
|
|
(0.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TO COMMON SHAREOWNERS
|
|
|
|
|
|
|
241.4
|
|
|
|
|
|
169.8
|
|
|
|
|
|
626.7
|
|
|
|
|
|
452.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM DISCONTINUED OPERATIONS
|
|
|
|
|
|
(4.7
|
)
|
|
|
|
|
(3.8
|
)
|
|
|
|
|
(11.6
|
)
|
|
|
|
|
(18.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
|
|
|
|
|
$
|
236.7
|
|
|
|
|
$
|
166.0
|
|
|
|
|
$
|
615.1
|
|
|
|
|
$
|
434.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
$
|
1.54
|
|
|
|
|
$
|
1.10
|
|
|
|
|
$
|
4.01
|
|
|
|
|
$
|
2.91
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
(0.12
|
)
|
|
|
Total basic earnings per share of common stock
|
|
|
|
|
$
|
1.51
|
|
|
|
|
$
|
1.07
|
|
|
|
|
$
|
3.94
|
|
|
|
|
$
|
2.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
|
$
|
1.50
|
|
|
|
|
$
|
1.07
|
|
|
|
|
$
|
3.92
|
|
|
|
|
$
|
2.85
|
|
|
|
Discontinued operations
|
|
|
|
|
|
|
(0.03
|
)
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
(0.11
|
)
|
|
|
Total diluted earnings per share of common stock
|
|
|
|
|
$
|
1.47
|
|
|
|
|
$
|
1.04
|
|
|
|
|
$
|
3.85
|
|
|
|
|
$
|
2.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER SHARE
|
|
|
|
|
|
$
|
0.52
|
|
|
|
|
$
|
0.50
|
|
|
|
|
$
|
1.52
|
|
|
|
|
$
|
1.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES OUTSTANDING (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
156,628
|
|
|
|
|
|
155,043
|
|
|
|
|
|
156,278
|
|
|
|
|
|
155,140
|
|
|
|
Diluted
|
|
|
|
|
|
|
160,582
|
|
|
|
|
|
158,925
|
|
|
|
|
|
159,755
|
|
|
|
|
|
158,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited, Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 27,
|
|
|
|
|
|
December 28,
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
486.8
|
|
|
|
|
|
$
|
496.2
|
|
Accounts and notes receivable, net
|
|
|
|
|
|
1,861.1
|
|
|
|
|
|
|
1,633.0
|
|
Inventories, net
|
|
|
|
|
|
|
1,758.0
|
|
|
|
|
|
|
1,485.2
|
|
Assets held for sale
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
10.1
|
|
Other current assets
|
|
|
|
|
|
|
341.5
|
|
|
|
|
|
|
344.2
|
|
Total current assets
|
|
|
|
|
|
|
4,452.1
|
|
|
|
|
|
|
3,968.7
|
|
Property, plant and equipment, net
|
|
|
|
|
|
1,448.1
|
|
|
|
|
|
|
1,485.3
|
|
Goodwill and other intangibles, net
|
|
|
|
|
|
10,355.9
|
|
|
|
|
|
|
10,632.9
|
|
Other assets
|
|
|
|
|
|
|
477.7
|
|
|
|
|
|
|
448.2
|
|
Total assets
|
|
|
|
|
|
$
|
16,733.8
|
|
|
|
|
|
$
|
16,535.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREOWNERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
|
|
$
|
432.7
|
|
|
|
|
|
$
|
402.6
|
|
Accounts payable
|
|
|
|
|
|
|
1,713.5
|
|
|
|
|
|
|
1,575.9
|
|
Accrued expenses
|
|
|
|
|
|
|
1,236.4
|
|
|
|
|
|
|
1,236.2
|
|
Liabilities held for sale
|
|
|
|
|
|
|
4.7
|
|
|
|
|
|
|
6.3
|
|
Total current liabilities
|
|
|
|
|
|
3,387.3
|
|
|
|
|
|
|
3,221.0
|
|
Long-term debt
|
|
|
|
|
|
|
3,856.8
|
|
|
|
|
|
|
3,799.4
|
|
Other long-term liabilities
|
|
|
|
|
|
|
2,445.7
|
|
|
|
|
|
|
2,634.2
|
|
Stanley Black & Decker, Inc. shareowners' equity
|
|
|
|
|
|
6,960.8
|
|
|
|
|
|
|
6,799.2
|
|
Non-controlling interests' equity
|
|
|
|
|
|
83.2
|
|
|
|
|
|
|
81.3
|
|
Total liabilities and equity
|
|
|
|
|
$
|
16,733.8
|
|
|
|
|
|
$
|
16,535.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
|
SUMMARY OF CASH FLOW ACTIVITY
|
(Unaudited, Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER
|
|
|
|
YEAR TO DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
$
|
241.1
|
|
|
|
|
$
|
169.5
|
|
|
|
|
$
|
627.5
|
|
|
|
|
$
|
451.5
|
|
|
|
Net loss from discontinued operations
|
|
|
|
|
|
(4.7
|
)
|
|
|
|
|
(3.8
|
)
|
|
|
|
|
(11.6
|
)
|
|
|
|
|
(18.2
|
)
|
|
|
Depreciation and amortization
|
|
|
|
|
|
112.6
|
|
|
|
|
|
108.8
|
|
|
|
|
|
337.4
|
|
|
|
|
|
322.7
|
|
|
|
Changes in working capital1
|
|
|
|
|
|
(168.6
|
)
|
|
|
|
|
(244.2
|
)
|
|
|
|
|
(443.0
|
)
|
|
|
|
|
(371.6
|
)
|
|
|
Other
|
|
|
|
|
|
|
68.7
|
|
|
|
|
|
69.3
|
|
|
|
|
|
24.0
|
|
|
|
|
|
(248.1
|
)
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
249.1
|
|
|
|
|
|
99.6
|
|
|
|
|
|
534.3
|
|
|
|
|
|
136.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and software expenditures
|
|
|
|
|
|
(60.2
|
)
|
|
|
|
|
(88.7
|
)
|
|
|
|
|
(179.4
|
)
|
|
|
|
|
(245.3
|
)
|
|
|
Proceeds from sale of business / assets
|
|
|
|
|
|
5.8
|
|
|
|
|
|
1.0
|
|
|
|
|
|
12.8
|
|
|
|
|
|
96.5
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
|
|
|
-
|
|
|
|
|
|
(16.7
|
)
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
(926.6
|
)
|
|
|
Proceeds from issuances of common stock
|
|
|
|
|
|
23.4
|
|
|
|
|
|
32.3
|
|
|
|
|
|
51.0
|
|
|
|
|
|
138.7
|
|
|
|
Net short-term (repayments) borrowings
|
|
|
|
|
|
(48.8
|
)
|
|
|
|
|
(70.9
|
)
|
|
|
|
|
33.8
|
|
|
|
|
|
1,199.5
|
|
|
|
Net investment hedge settlements
|
|
|
|
|
|
(29.2
|
)
|
|
|
|
|
5.3
|
|
|
|
|
|
(65.0
|
)
|
|
|
|
|
7.0
|
|
|
|
Cash dividends on common stock
|
|
|
|
|
|
(81.4
|
)
|
|
|
|
|
(77.5
|
)
|
|
|
|
|
(240.5
|
)
|
|
|
|
|
(235.0
|
)
|
|
|
Purchases of common stock for treasury
|
|
|
|
|
|
(1.3
|
)
|
|
|
|
|
(7.8
|
)
|
|
|
|
|
(20.7
|
)
|
|
|
|
|
(32.6
|
)
|
|
|
Payment on forward share purchase contract
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(350.0
|
)
|
|
|
Other
|
|
|
|
|
|
|
(86.3
|
)
|
|
|
|
|
30.8
|
|
|
|
|
|
(132.5
|
)
|
|
|
|
|
(35.4
|
)
|
|
|
Net cash used in investing and financing activities
|
|
|
|
|
|
(278.0
|
)
|
|
|
|
|
(192.2
|
)
|
|
|
|
|
(543.7
|
)
|
|
|
|
|
(383.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in Cash and Cash Equivalents
|
|
|
|
|
|
(28.9
|
)
|
|
|
|
|
(92.6
|
)
|
|
|
|
|
(9.4
|
)
|
|
|
|
|
(246.9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
|
|
|
515.7
|
|
|
|
|
|
561.7
|
|
|
|
|
|
496.2
|
|
|
|
|
|
716.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period
|
|
|
|
|
$
|
486.8
|
|
|
|
|
$
|
469.1
|
|
|
|
|
$
|
486.8
|
|
|
|
|
$
|
469.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow Computation2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash inflow
|
|
|
|
|
$
|
249.1
|
|
|
|
|
$
|
99.6
|
|
|
|
|
$
|
534.3
|
|
|
|
|
$
|
136.3
|
|
|
Less: capital and software expenditures
|
|
|
|
|
|
(60.2
|
)
|
|
|
|
|
(88.7
|
)
|
|
|
|
|
(179.4
|
)
|
|
|
|
|
(245.3
|
)
|
|
Free cash inflow (outflow) (before dividends)
|
|
|
|
|
$
|
188.9
|
|
|
|
|
$
|
10.9
|
|
|
|
|
$
|
354.9
|
|
|
|
|
$
|
(109.0
|
)
|
|
Merger & Acquisition-related charges and payments4
|
|
|
|
|
|
29.5
|
|
|
|
|
|
65.6
|
|
|
|
|
|
116.1
|
|
|
|
|
|
282.3
|
|
|
Free cash inflow, normalized (before dividends)3
|
|
|
|
|
$
|
218.4
|
|
|
|
|
$
|
76.5
|
|
|
|
|
$
|
471.0
|
|
|
|
|
$
|
173.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
The change in working capital is comprised of accounts receivable,
inventory, accounts payable and deferred revenue.
|
|
|
|
|
|
2,3
|
|
|
|
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. Normalized free
cash flow, as reconciled above, is considered a meaningful pro forma
metric to aid the understanding of the Company's cash flow
performance aside from the material impact of merger and
acquisition-related activities.
|
|
|
|
|
|
4
|
|
|
|
Merger & Acquisition-related charges and payments relate primarily
to the Black & Decker merger and Niscayah and Infastech
acquisitions, including facility closure-related charges,
employee-related charges and integration costs.
|
|
|
|
|
|
|
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
|
BUSINESS SEGMENT INFORMATION
|
(Unaudited, Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER
|
|
|
|
YEAR TO DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
2013
|
|
|
|
2014
|
|
|
|
2013
|
|
NET SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
$
|
1,453.5
|
|
|
|
|
$
|
1,332.0
|
|
|
|
|
$
|
4,062.9
|
|
|
|
|
$
|
3,874.0
|
|
|
|
Industrial
|
|
|
|
|
|
|
866.2
|
|
|
|
|
|
825.9
|
|
|
|
|
|
2,607.4
|
|
|
|
|
|
2,421.3
|
|
|
|
Security
|
|
|
|
|
|
|
582.5
|
|
|
|
|
|
600.4
|
|
|
|
|
|
1,756.9
|
|
|
|
|
|
1,796.4
|
|
|
|
Total
|
|
|
|
|
|
$
|
2,902.2
|
|
|
|
|
$
|
2,758.3
|
|
|
|
|
$
|
8,427.2
|
|
|
|
|
$
|
8,091.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
$
|
239.7
|
|
|
|
|
$
|
198.4
|
|
|
|
|
$
|
627.0
|
|
|
|
|
$
|
574.3
|
|
|
|
Industrial
|
|
|
|
|
|
|
136.2
|
|
|
|
|
|
114.6
|
|
|
|
|
|
416.8
|
|
|
|
|
|
321.6
|
|
|
|
Security
|
|
|
|
|
|
|
63.9
|
|
|
|
|
|
61.4
|
|
|
|
|
|
180.5
|
|
|
|
|
|
173.5
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
439.8
|
|
|
|
|
|
374.4
|
|
|
|
|
|
1,224.3
|
|
|
|
|
|
1,069.4
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(39.9
|
)
|
|
|
|
|
(56.4
|
)
|
|
|
|
|
(121.5
|
)
|
|
|
|
|
(179.1
|
)
|
|
|
Total
|
|
|
|
|
|
$
|
399.9
|
|
|
|
|
$
|
318.0
|
|
|
|
|
$
|
1,102.8
|
|
|
|
|
$
|
890.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
|
16.5
|
%
|
|
|
|
|
14.9
|
%
|
|
|
|
|
15.4
|
%
|
|
|
|
|
14.8
|
%
|
|
|
Industrial
|
|
|
|
|
|
|
15.7
|
%
|
|
|
|
|
13.9
|
%
|
|
|
|
|
16.0
|
%
|
|
|
|
|
13.3
|
%
|
|
|
Security
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
10.2
|
%
|
|
|
|
|
10.3
|
%
|
|
|
|
|
9.7
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
|
15.2
|
%
|
|
|
|
|
13.6
|
%
|
|
|
|
|
14.5
|
%
|
|
|
|
|
13.2
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(1.4
|
%)
|
|
|
|
|
(2.0
|
%)
|
|
|
|
|
(1.4
|
%)
|
|
|
|
|
(2.2
|
%)
|
|
|
Total
|
|
|
|
|
|
|
13.8
|
%
|
|
|
|
|
11.5
|
%
|
|
|
|
|
13.1
|
%
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 2014
|
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition- Related Charges1
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
1,050.1
|
|
|
|
|
|
$
|
0.1
|
|
|
|
|
|
$
|
1,050.2
|
|
|
% of Net Sales
|
|
|
|
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
650.2
|
|
|
|
|
|
|
(8.1
|
)
|
|
|
|
|
$
|
642.1
|
|
|
% of Net Sales
|
|
|
|
|
|
|
22.4
|
%
|
|
|
|
|
|
|
|
|
|
|
22.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
399.9
|
|
|
|
|
|
|
8.2
|
|
|
|
|
|
|
408.1
|
|
|
% of Net Sales
|
|
|
|
|
|
|
13.8
|
%
|
|
|
|
|
|
|
|
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
297.9
|
|
|
|
|
|
|
8.4
|
|
|
|
|
|
|
306.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
56.8
|
|
|
|
|
|
|
0.7
|
|
|
|
|
|
|
57.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
241.4
|
|
|
|
|
|
|
7.7
|
|
|
|
|
|
|
249.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
$
|
1.50
|
|
|
|
|
|
$
|
0.05
|
|
|
|
|
|
$
|
1.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
Merger and acquisition-related charges relate primarily to
integration and consulting costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER 2013
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition -Related and Other Charges2
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
987.6
|
|
|
|
|
|
$
|
5.3
|
|
|
|
|
|
$
|
992.9
|
|
% of Net Sales
|
|
|
|
|
|
|
35.8
|
%
|
|
|
|
|
|
|
|
|
|
|
36.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
669.6
|
|
|
|
|
|
|
(31.9
|
)
|
|
|
|
|
|
637.7
|
|
% of Net Sales
|
|
|
|
|
|
|
24.3
|
%
|
|
|
|
|
|
|
|
|
|
|
23.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
318.0
|
|
|
|
|
|
|
37.2
|
|
|
|
|
|
|
355.2
|
|
% of Net Sales
|
|
|
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
186.8
|
|
|
|
|
|
|
67.2
|
|
|
|
|
|
|
254.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
17.3
|
|
|
|
|
|
|
16.0
|
|
|
|
|
|
|
33.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
169.8
|
|
|
|
|
|
|
51.3
|
|
|
|
|
|
|
221.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
$
|
1.07
|
|
|
|
|
|
$
|
0.32
|
|
|
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
Merger and acquisition-related and other charges relate primarily to
the Black & Decker merger and Niscayah and Infastech acquisitions,
including facility closure-related charges, employee-related charges
and integration costs.
|
3
|
|
|
|
The normalized 2014 and 2013 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
merger & 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 2014
|
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition- Related Charges1
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
3,063.6
|
|
|
|
|
|
$
|
1.5
|
|
|
|
|
|
$
|
3,065.1
|
|
|
% of Net Sales
|
|
|
|
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
1,960.8
|
|
|
|
|
|
|
(19.7
|
)
|
|
|
|
|
|
1,941.1
|
|
|
% of Net Sales
|
|
|
|
|
|
|
23.3
|
%
|
|
|
|
|
|
|
|
|
|
|
23.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
1,102.8
|
|
|
|
|
|
|
21.2
|
|
|
|
|
|
|
1,124.0
|
|
|
% of Net Sales
|
|
|
|
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
804.8
|
|
|
|
|
|
|
16.4
|
|
|
|
|
|
|
821.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
177.3
|
|
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
|
174.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
626.7
|
|
|
|
|
|
|
19.6
|
|
|
|
|
|
|
646.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
$
|
3.92
|
|
|
|
|
|
$
|
0.13
|
|
|
|
|
|
$
|
4.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
Merger and acquisition-related charges relate primarily to
integration and consulting costs, as well as employee-related
matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR TO DATE 2013
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition- Related and Other Charges2
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
2,901.8
|
|
|
|
|
|
$
|
26.4
|
|
|
|
|
|
$
|
2,928.2
|
|
% of Net Sales
|
|
|
|
|
|
|
35.9
|
%
|
|
|
|
|
|
|
|
|
|
|
36.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
2,011.5
|
|
|
|
|
|
|
(90.3
|
)
|
|
|
|
|
|
1,921.2
|
|
% of Net Sales
|
|
|
|
|
|
|
24.9
|
%
|
|
|
|
|
|
|
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
890.3
|
|
|
|
|
|
|
116.7
|
|
|
|
|
|
|
1,007.0
|
|
% of Net Sales
|
|
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
531.8
|
|
|
|
|
|
|
178.6
|
|
|
|
|
|
|
710.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
80.3
|
|
|
|
|
|
|
50.0
|
|
|
|
|
|
|
130.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
452.4
|
|
|
|
|
|
|
128.6
|
|
|
|
|
|
|
581.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
$
|
2.85
|
|
|
|
|
|
$
|
0.81
|
|
|
|
|
|
$
|
3.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
Merger and acquisition-related and other charges relate primarily to
the Black & Decker merger and Niscayah and Infastech acquisitions,
including facility closure-related charges, employee-related charges
and integration costs, as well as a restructuring reversal due to
the termination of a previously approved restructuring action.
|
3
|
|
|
|
The normalized 2014 and 2013 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
merger & 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 2014
|
|
|
|
|
Reported
|
|
Merger & Acquisition- Related Charges1
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
$
|
239.7
|
|
|
$
|
0.1
|
|
$
|
239.8
|
|
|
|
Industrial
|
|
|
136.2
|
|
|
|
1.2
|
|
|
137.4
|
|
|
|
Security
|
|
|
63.9
|
|
|
|
0.3
|
|
|
64.2
|
|
|
|
Segment Profit
|
|
|
439.8
|
|
|
|
1.6
|
|
|
441.4
|
|
|
|
Corporate Overhead
|
|
|
(39.9
|
)
|
|
|
6.6
|
|
|
(33.3
|
)
|
|
|
Total
|
|
$
|
399.9
|
|
|
$
|
8.2
|
|
$
|
408.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
16.5
|
%
|
|
|
|
|
16.5
|
%
|
|
|
Industrial
|
|
|
15.7
|
%
|
|
|
|
|
15.9
|
%
|
|
|
Security
|
|
|
11.0
|
%
|
|
|
|
|
11.0
|
%
|
|
|
Segment Profit
|
|
|
15.2
|
%
|
|
|
|
|
15.2
|
%
|
|
|
Corporate Overhead
|
|
|
(1.4
|
%)
|
|
|
|
|
(1.1
|
%)
|
|
|
Total
|
|
|
13.8
|
%
|
|
|
|
|
14.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
Merger and acquisition-related charges relate primarily to
integration and consulting costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIRD QUARTER 2013
|
|
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition- Related Charges2
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
$
|
198.4
|
|
|
|
|
|
$
|
3.1
|
|
|
|
|
$
|
201.5
|
|
|
|
Industrial
|
|
|
|
|
|
|
114.6
|
|
|
|
|
|
|
2.3
|
|
|
|
|
|
116.9
|
|
|
|
Security
|
|
|
|
|
|
|
61.4
|
|
|
|
|
|
|
11.9
|
|
|
|
|
|
73.3
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
374.4
|
|
|
|
|
|
|
17.3
|
|
|
|
|
|
391.7
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(56.4
|
)
|
|
|
|
|
|
19.9
|
|
|
|
|
|
(36.5
|
)
|
|
|
Total
|
|
|
|
|
|
$
|
318.0
|
|
|
|
|
|
$
|
37.2
|
|
|
|
|
$
|
355.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
|
14.9
|
%
|
|
|
|
|
|
|
|
|
|
|
15.1
|
%
|
|
|
Industrial
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
|
|
|
|
|
14.2
|
%
|
|
|
Security
|
|
|
|
|
|
|
10.2
|
%
|
|
|
|
|
|
|
|
|
|
|
12.2
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
|
|
14.2
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(2.0
|
%)
|
|
|
|
|
|
|
|
|
|
|
(1.3
|
%)
|
|
|
Total
|
|
|
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
|
|
12.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
Merger and acquisition-related charges relate primarily to the Black
& Decker merger and Niscayah and Infastech acquisitions, including
facility closure-related charges, employee-related charges and
integration costs.
|
3
|
|
|
|
The normalized 2014 and 2013 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 merger and acquisition-related 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 2014
|
|
|
|
|
|
|
|
|
Reported
|
|
|
|
|
Merger & Acquisition- Related Charges1
|
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
$
|
627.0
|
|
|
|
|
|
$
|
0.7
|
|
|
|
|
$
|
627.7
|
|
|
|
Industrial
|
|
|
|
|
|
|
416.8
|
|
|
|
|
|
|
4.6
|
|
|
|
|
|
421.4
|
|
|
|
Security
|
|
|
|
|
|
|
180.5
|
|
|
|
|
|
|
3.8
|
|
|
|
|
|
184.3
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
1,224.3
|
|
|
|
|
|
|
9.1
|
|
|
|
|
|
1,233.4
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(121.5
|
)
|
|
|
|
|
|
12.1
|
|
|
|
|
|
(109.4
|
)
|
|
|
Total
|
|
|
|
|
|
$
|
1,102.8
|
|
|
|
|
|
$
|
21.2
|
|
|
|
|
$
|
1,124.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
|
15.4
|
%
|
|
|
|
|
|
|
|
|
|
|
15.4
|
%
|
|
|
Industrial
|
|
|
|
|
|
|
16.0
|
%
|
|
|
|
|
|
|
|
|
|
|
16.2
|
%
|
|
|
Security
|
|
|
|
|
|
|
10.3
|
%
|
|
|
|
|
|
|
|
|
|
|
10.5
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
|
14.5
|
%
|
|
|
|
|
|
|
|
|
|
|
14.6
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
|
(1.4
|
%)
|
|
|
|
|
|
|
|
|
|
|
(1.3
|
%)
|
|
|
Total
|
|
|
|
|
|
|
13.1
|
%
|
|
|
|
|
|
|
|
|
|
|
13.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
Merger and acquisition-related charges relate primarily to
integration and consulting costs, as well as employee-related
matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR TO DATE 2013
|
|
|
|
|
Reported
|
|
Merger & Acquisition- Related Charges2
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
$
|
574.3
|
|
|
$
|
9.2
|
|
$
|
583.5
|
|
|
|
Industrial
|
|
|
321.6
|
|
|
|
20.8
|
|
|
342.4
|
|
|
|
Security
|
|
|
173.5
|
|
|
|
27.1
|
|
|
200.6
|
|
|
|
Segment Profit
|
|
|
1,069.4
|
|
|
|
57.1
|
|
|
1,126.5
|
|
|
|
Corporate Overhead
|
|
|
(179.1
|
)
|
|
|
59.6
|
|
|
(119.5
|
)
|
|
|
Total
|
|
$
|
890.3
|
|
|
$
|
116.7
|
|
$
|
1,007.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
14.8
|
%
|
|
|
|
|
15.1
|
%
|
|
|
Industrial
|
|
|
13.3
|
%
|
|
|
|
|
14.1
|
%
|
|
|
Security
|
|
|
9.7
|
%
|
|
|
|
|
11.2
|
%
|
|
|
Segment Profit
|
|
|
13.2
|
%
|
|
|
|
|
13.9
|
%
|
|
|
Corporate Overhead
|
|
|
(2.2
|
%)
|
|
|
|
|
(1.5
|
%)
|
|
|
Total
|
|
|
11.0
|
%
|
|
|
|
|
12.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
Merger and acquisition-related charges relate primarily to the Black
& Decker merger and Niscayah and Infastech acquisitions, including
facility closure-related charges, employee-related charges and
integration costs.
|
3
|
|
|
|
The normalized 2014 and 2013 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 merger and acquisition-related charges.
|
|
|
|
|
|
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