[July 25, 2014] |
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Stanley Black & Decker Reports 2Q 2014 Results
NEW BRITAIN, Conn. --(Business Wire)--
Stanley Black & Decker (NYSE: SWK) today announced second
quarter 2014 financial results.
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2Q'14 Revenues Up 1% To $2.9 Billion
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Gross Margin Expanded 130 Basis Points; Excluding Charges Gross Margin
Expanded 100 Basis Points To 36.5%
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Operating Margin Expanded 200 Basis Points To 13.5%; Excluding Charges
Operating Margin Expanded 110 Basis Points To 13.7%
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2Q'14 Diluted GAAP EPS Was $1.37; Excluding Charges, 2Q'14 Diluted EPS
Was $1.43
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Increasing 2014 FY EPS Guidance Range To:
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$5.38 To $5.48 On A GAAP Basis (From $5.23 To $5.38)
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$5.50 To $5.60, Excluding Charges (From $5.35 To $5.50)
2Q'14 Key Points:
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Net sales for the period were $2.9 billion, up 1% versus the prior
year, primarily attributable to price (+1%) as volume, acquisitions
and currency were all relatively flat for the quarter. Organic growth
was negatively impacted by unusually weak emerging markets due to
economic and political circumstances as well as a delayed and
shortened CDIY North American outdoor product season. These factors
muted organic growth by two points.
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The gross margin rate for the quarter was 36.5%. Excluding charges the
gross margin rate was also 36.5%, up 100 basis points from the prior
year rate of 35.5%, as price, productivity and cost actions more than
offset significant unfavorable currency.
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SG&A expenses were 23.0% of sales. Excluding charges, SG&A expenses
were 22.8% of sales, compared to a 2Q'13 level of 22.9%.
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Operating margin rate was 13.5%. Excluding charges, operating margin
rate was 13.7%, up 110 basis points from 2Q'13, as actions taken in
4Q'13 to improve profitability and generate operating leverage more
than offset unfavorable currency of $20 million which was in line with
expectations.
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The tax rate was 25.1%. Excluding charges, the tax rate was 23.0%, 170
basis points lower than the 2Q'13 rate of 24.7% due primarily to a
higher level of earnings in lower-taxed foreign jurisdictions.
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Working capital turns for the quarter were 6.7, down 0.4 turns from
2Q'13. Free cash flow for the quarter inclusive of $35 million of
one-time payments was $376 million, a $272 million increase over 2Q'13.
Stanley Black & Decker's Chairman and CEO, John F. Lundgren, commented,
"Our focus is on executing our 2014 operating priorities and our strong
second quarter and first half results demonstrate the benefits of
initiatives to drive margin expansion and operating leverage through
pricing and cost management across the organization. What makes the
results even more notable is that we overcame significant headwinds
relating to currency, the impact of cold weather on our North American
CDIY outdoor product business and a continued volatile environment in
the emerging markets. Given our encouraging performance thus far, and
our visibility into the remainder of the year, we have the confidence to
increase our EPS guidance for 2014.
"Our focus for the balance of 2014 remains on continuing to deliver
improved operating performance including both organic growth and margin
expansion as well as achieving our previously communicated capital
allocation objectives. This will position us well to drive long-term
sustainable improvements to the Company's cash flow return on
investment."
2Q'14 Segment Results
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($ in M)
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2Q' 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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$1,395
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$218.2
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$0.2
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$218.4
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15.6%
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15.7%
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Industrial
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$889
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$150.3
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$1.2
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$151.5
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16.9%
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17.0%
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Security
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$602
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$67.0
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$1.2
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$68.2
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11.1%
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11.3%
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1 See Merger And Acquisition (M&A) One-Time Charges On Page 5
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In CDIY, net sales were flat versus 2Q'13 as the aggregate impact of
volume, price and acquisitions (+1%) was offset by currency (-1%).
Organic growth for the quarter was up slightly as growth in Europe
offset a slow start to the North American outdoor product season
caused by abnormally cold weather conditions. Europe was up 7%
organically for the quarter, driven by continued share gains from
successful new product introductions across key regions and the
benefits of an expanding retail footprint. Emerging markets organic
growth was up 1%, impacted by economic and political factors in
markets including but not limited to Venezuela, Russia, Turkey and
Brazil. Organic growth in North America was down 2% due to the outdoor
product business offsetting continuing solid momentum in other
categories. Excluding charges, overall segment profit rate was a
post-merger record 15.7%, up from the 2Q'13 rate of 15.3%, as price,
productivity and cost management more than offset continuing currency
pressures.
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Net sales in the Industrial segment rose 3% versus 2Q'13 as a result
of volume (+2%) and acquisitions (+1%). Pricing was up slightly and
currency was relatively flat for the quarter. Engineered Fastening
posted 2% organic growth driven by strong global automotive revenues
partially offset by weaker electronic volume. Organic sales for the
Industrial and Automotive Repair ("IAR") business were up 2% primarily
as a result of new product introductions and strength within Mac Tools
industrial distribution and Advanced Industrial Solutions, partially
offset by weak emerging markets. Infrastructure organic growth was up
5% due to solid Oil & Gas activity coupled with improving demand for
hydraulic tools.
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Overall Industrial segment profit rate excluding charges was 17.0%, up
260 basis points from the 2Q'13 rate of 14.4% reflecting favorable
volume leverage, productivity gains, and cost control, partially
offset by currency. Infastech remains on-plan to achieve both earnings
and cost synergy targets, which helped drive record operating margin
in Engineered Fastening for the quarter.
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Net sales in Security were relatively flat versus 2Q'13 as lower
volume (-2%) was offset by pricing (+1%) and currency (+1%). Organic
growth within North America and emerging markets ("NA & EM") increased
2% due primarily to performance within the commercial electronics and
automatic doors businesses. Europe declined 6% organically due to
lower installation and recurring revenues most notably in Southern
Europe. Within Europe, recurring revenue attrition levels continued to
show steady improvement as attrition fell within our targeted range of
10%-12%, reflecting a significant improvement both sequentially and
versus the prior year's second quarter.
Security segment profit rate excluding charges was 11.3%, up 80 basis
points from the 2Q'13 rate of 10.5% and 220 basis points higher than the
1Q'14 rate. The year over year increase in the rate relates primarily to
improved operating performance within North America. The sequential
increase in the rate relates to increased volume and improved operating
performance across NA & EM and Europe, which were up 180 and 240 basis
points, respectively.
President and Chief Operating Officer, James M. Loree, commented, "We
posted a respectable quarter with strong cash flow and margin expansion
amidst unusually challenging economic and geopolitical conditions
especially in the emerging markets. While this year's truncated outdoor
product season also took its toll on CDIY's second quarter growth, the
second half organic growth outlook remains robust which will undoubtedly
drive operating leverage given our well tuned cost structure. Our
Industrial results were again strong as all key businesses delivered
sales and margin growth. As we look to the emerging markets we believe
we are positioned to generate above market growth for the remainder of
the year and into 2015, leveraging recent investments in the regions as
well as our mid-price point product launches which are currently
underway.
"As for Security, we are now beginning to see the margin improvement
actions translate into financial results which contributed to the
sequential improvement in operating margin versus the first quarter.
Europe's performance in the quarter combined with continued favorable
momentum in North America gives us further confidence in our ability to
drive year over year operating margin growth from Security in the second
half of 2014."
Increasing 2014 Outlook
Donald Allan Jr., Senior Vice President and CFO commented, "We are
raising the range of our previously communicated 2014 EPS outlook to
$5.50 to $5.60 on an adjusted basis or $5.38 to $5.48 on a GAAP basis.
We anticipate a stronger full year financial performance within certain
of our businesses, most notably the Industrial segment, and further
Company-wide cost savings to more than offset slightly lower full year
organic sales growth due to the weather impact on the CDIY outdoor
product season and slower underlying emerging markets growth. This
revised guidance is consistent with our EPS profile in recent years
whereby approximately 45% of annual EPS typically falls within the first
half of the year. We have strong conviction that our 2014 free cash flow
will be at least $675 million inclusive of approximately $250 million of
one-time payments primarily relating to 2013 restructuring actions.
"Enhancing our operating leverage, continuing to drive organic growth
and improving Security margins, particularly within Europe, remain our
key operational priorities for this year. To ensure we continue to
accomplish these important objectives, we are steadfastly focused on
supporting our organic growth initiatives, executing our cost reduction
actions, maintaining a sharp focus on indirect expenses and improving
price where practicable to protect margins. We also remain committed to
our capital allocation plan of returning up to $1 billion of capital to
shareholders through 2015 as well as a strong and growing dividend.
Taken together, these actions along with modest debt deleveraging are
expected to increase our cash flow return on investment by 250 basis
points through 2015."
Merger And Acquisition (M&A) One-Time
Charges
Total one-time charges in 2Q'14 of $4.1 million (net of a $1.7 million
restructuring credit) primarily relate to integration and
employee-related matters. Gross margin includes $0.3 million of these
one-time charges while SG&A includes $5.3 million. $2.6 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 $0.2 million in Other, net.
The Company will host a conference call with investors today, Friday,
July 25, 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 (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 3758-1285. A replay will
also be available two hours after the call and can be accessed at (888)
843-7419 or +1 (630) 652-3042 using the passcode 3758-1285#. 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 2Q'13, while the operating results of the
business within the Security segment have been reported as discontinued
operations for 2Q'14 and 2Q'13. In addition, the Company sold its
Hardware & Home Improvement business (HHI), including the residential
portion of Tong Lung in December of 2012. The sale of this business
occurred in a First and Second Closing. The First closing, which
excluded the residential portion of Tong Lung, occurred on December 17,
2012. The Second closing in which the residential portion of Tong Lung
was sold occurred on April 8, 2013. The operating results of the
residential portion of Tong Lung have been reported as discontinued
operations for 2013 through the date of the sale. Total sales reported
as discontinued operations were $8.0 million and $13.1 million for 2Q'14
and 2Q'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 $5.50 - $5.60 ($5.38 - $5.48 on a GAAP
basis); (ii) generate at least $675 million of free cash flow for 2014
which includes approximately $250 million of one-time payments; (iii)
return up to $1 billion of capital to shareholders through 2015; 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 improve margins in the Security business
(versus the prior year) in the second half of 2014; (vi) the Company's
ability to generate EPS accretion in 2014 through cost reductions in its
CDIY and Industrial segments and its corporate functions; (vii) the
Company's ability to limit one-time charges primarily associated with
the Infastech acquisition to $25 million in 2014; (viii) successful
integration of acquisitions completed in 2012 and 2013, and any
additional acquisitions completed during the year, as well as
integration of existing businesses; (ix) the continued acceptance of
technologies used in the Company's products and services; (x) the
Company's ability to manage existing Sonitrol franchisee and Mac Tools
relationships; (xi) the Company's ability to minimize costs associated
with any sale or discontinuance of a business or product line, including
any severance, restructuring, legal or other costs; (xii) the proceeds
realized with respect to any business or product line disposals; (xiii)
the extent of any asset impairments with respect to any businesses or
product lines that are sold or discontinued; (xiv) the success of the
Company's efforts to manage freight costs, steel and other commodity
costs as well as capital expenditures; (xv) the Company's ability to
sustain or increase prices in order to, among other things, offset or
mitigate the impact of steel, freight, energy, non-ferrous commodity and
other commodity costs and any inflation increases; (xvi) the Company's
ability to generate free cash flow and maintain a strong debt to capital
ratio; (xvii) the Company's ability to identify and effectively execute
productivity improvements and cost reductions, while minimizing any
associated restructuring charges; (xviii) the Company's ability to
obtain favorable settlement of tax audits; (xix) the ability of the
Company to generate earnings sufficient to realize future income tax
benefits during periods when temporary differences become deductible;
(xx) the continued ability of the Company to access credit markets under
satisfactory terms; (xxi) the Company's ability to negotiate
satisfactory payment terms under which the Company buys and sells goods,
services, materials and products; (xxii) the Company's ability to
successfully develop, market and achieve sales from new products and
services; and (xxiii) 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 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 cost increases
generated by, for example, increases in the cost of energy or
significant Chinese Renminbi or other currency appreciation; (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
macroeconomic environment; the continued economic growth of emerging
markets, particularly Latin America; 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; 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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SECOND 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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2,885.5
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$
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2,858.2
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$
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5,525.0
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$
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5,333.4
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COSTS AND EXPENSES
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Cost of sales
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1,832.2
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1,852.5
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3,511.5
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3,419.2
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Gross margin
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1,053.3
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1,005.7
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2,013.5
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1,914.2
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% of Net Sales
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36.5
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%
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35.2
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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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662.9
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677.2
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1,310.6
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1,341.9
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% of Net Sales
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23.0
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%
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23.7
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%
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23.7
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%
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25.2
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%
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Operating margin
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390.4
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328.5
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702.9
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572.3
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% of Net Sales
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13.5
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%
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11.5
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%
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12.7
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%
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10.7
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%
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Other - net
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58.7
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71.4
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120.2
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142.3
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Restructuring (credits) charges
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(1.7
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(30.9
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(5.4
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12.0
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Income from operations
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333.4
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288.0
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588.1
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418.0
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Interest - net
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40.3
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|
|
|
|
36.3
|
|
|
|
|
|
81.2
|
|
|
|
|
|
73.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
|
|
|
|
293.1
|
|
|
|
|
|
251.7
|
|
|
|
|
|
506.9
|
|
|
|
|
|
345.0
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
73.7
|
|
|
|
|
|
54.4
|
|
|
|
|
|
120.5
|
|
|
|
|
|
63.1
|
|
|
NET EARNINGS FROM CONTINUING OPERATIONS
|
|
|
|
|
|
219.4
|
|
|
|
|
|
197.3
|
|
|
|
|
|
386.4
|
|
|
|
|
|
281.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: net earnings (loss) attributable to non-controlling interests
|
|
|
|
|
|
0.9
|
|
|
|
|
|
(0.3
|
)
|
|
|
|
|
1.1
|
|
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TO COMMON SHAREOWNERS
|
|
|
|
|
|
218.5
|
|
|
|
|
|
197.6
|
|
|
|
|
|
385.3
|
|
|
|
|
|
282.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET LOSS FROM DISCONTINUED OPERATIONS
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
|
(10.5
|
)
|
|
|
|
|
(6.9
|
)
|
|
|
|
|
(14.4
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
|
|
|
|
|
$
|
216.5
|
|
|
|
|
$
|
187.1
|
|
|
|
|
$
|
378.4
|
|
|
|
|
$
|
268.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
1.40
|
|
|
|
|
$
|
1.27
|
|
|
|
|
$
|
2.47
|
|
|
|
|
$
|
1.82
|
|
|
|
Discontinued operations
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
(0.09
|
)
|
|
|
Total basic earnings per share of common stock
|
|
|
|
|
$
|
1.38
|
|
|
|
|
$
|
1.21
|
|
|
|
|
$
|
2.42
|
|
|
|
|
$
|
1.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
|
|
$
|
1.37
|
|
|
|
|
$
|
1.25
|
|
|
|
|
$
|
2.42
|
|
|
|
|
$
|
1.78
|
|
|
|
Discontinued operations
|
|
|
|
|
|
(0.01
|
)
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
(0.04
|
)
|
|
|
|
|
(0.09
|
)
|
|
|
Total diluted earnings per share of common stock
|
|
|
|
|
$
|
1.36
|
|
|
|
|
$
|
1.18
|
|
|
|
|
$
|
2.37
|
|
|
|
|
$
|
1.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER SHARE
|
|
|
|
|
$
|
0.50
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
1.00
|
|
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AVERAGE SHARES OUTSTANDING (in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
156,316
|
|
|
|
|
|
155,064
|
|
|
|
|
|
156,097
|
|
|
|
|
|
155,137
|
|
|
|
Diluted
|
|
|
|
|
|
159,666
|
|
|
|
|
|
158,351
|
|
|
|
|
|
159,354
|
|
|
|
|
|
158,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(Unaudited, Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 28,
|
|
|
|
|
December 28,
|
|
|
|
|
|
|
2014
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
515.7
|
|
|
|
|
$
|
496.2
|
|
Accounts and notes receivable, net
|
|
|
|
|
|
1,788.8
|
|
|
|
|
|
1,633.0
|
|
Inventories, net
|
|
|
|
|
|
1,721.7
|
|
|
|
|
|
1,485.2
|
|
Assets held for sale
|
|
|
|
|
|
5.0
|
|
|
|
|
|
10.1
|
|
Other current assets
|
|
|
|
|
|
369.4
|
|
|
|
|
|
344.2
|
|
Total current assets
|
|
|
|
|
|
4,400.6
|
|
|
|
|
|
3,968.7
|
|
Property, plant and equipment, net
|
|
|
|
|
|
1,483.7
|
|
|
|
|
|
1,485.3
|
|
Goodwill and other intangibles, net
|
|
|
|
|
|
10,589.6
|
|
|
|
|
|
10,632.9
|
|
Other assets
|
|
|
|
|
|
484.9
|
|
|
|
|
|
448.2
|
|
Total assets
|
|
|
|
|
$
|
16,958.8
|
|
|
|
|
$
|
16,535.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREOWNERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings
|
|
|
|
|
$
|
484.0
|
|
|
|
|
$
|
402.6
|
|
Accounts payable
|
|
|
|
|
|
1,701.2
|
|
|
|
|
|
1,575.9
|
|
Accrued expenses
|
|
|
|
|
|
1,196.9
|
|
|
|
|
|
1,236.2
|
|
Liabilities held for sale
|
|
|
|
|
|
4.9
|
|
|
|
|
|
6.3
|
|
Total current liabilities
|
|
|
|
|
|
3,387.0
|
|
|
|
|
|
3,221.0
|
|
Long-term debt
|
|
|
|
|
|
3,849.3
|
|
|
|
|
|
3,799.4
|
|
Other long-term liabilities
|
|
|
|
|
|
2,585.2
|
|
|
|
|
|
2,634.2
|
|
Stanley Black & Decker, Inc. shareowners' equity
|
|
|
|
|
|
7,054.9
|
|
|
|
|
|
6,799.2
|
|
Non-controlling interests' equity
|
|
|
|
|
|
82.4
|
|
|
|
|
|
81.3
|
|
Total liabilities and equity
|
|
|
|
|
$
|
16,958.8
|
|
|
|
|
$
|
16,535.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
|
SUMMARY OF CASH FLOW ACTIVITY
|
(Unaudited, Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER
|
|
|
|
YEAR TO DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
$
|
219.4
|
|
|
|
|
$
|
197.3
|
|
|
|
|
$
|
386.4
|
|
|
|
|
$
|
281.9
|
|
|
|
Net loss from discontinued operations
|
|
|
|
|
|
(2.0
|
)
|
|
|
|
|
(10.5
|
)
|
|
|
|
|
(6.9
|
)
|
|
|
|
|
(14.4
|
)
|
|
|
Depreciation and amortization
|
|
|
|
|
|
114.4
|
|
|
|
|
|
108.1
|
|
|
|
|
|
224.8
|
|
|
|
|
|
213.9
|
|
|
|
Changes in working capital1
|
|
|
|
|
|
55.9
|
|
|
|
|
|
67.6
|
|
|
|
|
|
(274.4
|
)
|
|
|
|
|
(127.4
|
)
|
|
|
Other
|
|
|
|
|
|
|
49.5
|
|
|
|
|
|
(178.3
|
)
|
|
|
|
|
(44.7
|
)
|
|
|
|
|
(317.3
|
)
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
437.2
|
|
|
|
|
|
184.2
|
|
|
|
|
|
285.2
|
|
|
|
|
|
36.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING AND FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital and software expenditures
|
|
|
|
|
|
(61.4
|
)
|
|
|
|
|
(80.0
|
)
|
|
|
|
|
(119.2
|
)
|
|
|
|
|
(156.6
|
)
|
|
|
Proceeds from sale of business / assets
|
|
|
|
|
|
1.0
|
|
|
|
|
|
94.5
|
|
|
|
|
|
7.0
|
|
|
|
|
|
95.5
|
|
|
|
Acquisitions, net of cash acquired
|
|
|
|
|
|
-
|
|
|
|
|
|
(56.0
|
)
|
|
|
|
|
(3.2
|
)
|
|
|
|
|
(909.9
|
)
|
|
|
Proceeds from issuances of common stock
|
|
|
|
|
|
14.4
|
|
|
|
|
|
23.2
|
|
|
|
|
|
27.6
|
|
|
|
|
|
106.4
|
|
|
|
Net short-term (repayments) borrowings
|
|
|
|
|
|
(199.7
|
)
|
|
|
|
|
(60.1
|
)
|
|
|
|
|
82.6
|
|
|
|
|
|
1,270.4
|
|
|
|
Cash dividends on common stock
|
|
|
|
|
|
(78.4
|
)
|
|
|
|
|
(78.4
|
)
|
|
|
|
|
(159.1
|
)
|
|
|
|
|
(157.5
|
)
|
|
|
Purchases of common stock for treasury
|
|
|
|
|
|
-
|
|
|
|
|
|
(3.7
|
)
|
|
|
|
|
(19.4
|
)
|
|
|
|
|
(24.8
|
)
|
|
|
Payment on forward share purchase contract
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(350.0
|
)
|
|
|
Other
|
|
|
|
|
|
|
(30.0
|
)
|
|
|
|
|
(19.5
|
)
|
|
|
|
|
(82.0
|
)
|
|
|
|
|
(64.5
|
)
|
|
|
Net cash used in investing and financing activities
|
|
|
|
|
|
(354.1
|
)
|
|
|
|
|
(180.0
|
)
|
|
|
|
|
(265.7
|
)
|
|
|
|
|
(191.0
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in Cash and Cash Equivalents
|
|
|
|
|
|
83.1
|
|
|
|
|
|
4.2
|
|
|
|
|
|
19.5
|
|
|
|
|
|
(154.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, Beginning of Period
|
|
|
|
|
|
432.6
|
|
|
|
|
|
557.5
|
|
|
|
|
|
496.2
|
|
|
|
|
|
716.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents, End of Period
|
|
|
|
|
$
|
515.7
|
|
|
|
|
$
|
561.7
|
|
|
|
|
$
|
515.7
|
|
|
|
|
$
|
561.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow Computation2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash inflow
|
|
|
|
|
$
|
437.2
|
|
|
|
|
$
|
184.2
|
|
|
|
|
$
|
285.2
|
|
|
|
|
$
|
36.7
|
|
|
Less: capital and software expenditures
|
|
|
|
|
|
(61.4
|
)
|
|
|
|
|
(80.0
|
)
|
|
|
|
|
(119.2
|
)
|
|
|
|
|
(156.6
|
)
|
|
Free cash inflow (outflow) (before dividends)
|
|
|
|
|
$
|
375.8
|
|
|
|
|
$
|
104.2
|
|
|
|
|
$
|
166.0
|
|
|
|
|
$
|
(119.9
|
)
|
|
Merger & Acquisition-related charges and payments4
|
|
|
|
|
|
34.8
|
|
|
|
|
|
122.1
|
|
|
|
|
|
86.6
|
|
|
|
|
|
216.6
|
|
|
Free cash inflow, normalized (before dividends)3
|
|
|
|
|
$
|
410.6
|
|
|
|
|
$
|
226.3
|
|
|
|
|
$
|
252.6
|
|
|
|
|
$
|
96.7
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER
|
|
|
|
YEAR TO DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
2014
|
|
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
$
|
1,394.6
|
|
|
|
|
$
|
1,392.8
|
|
|
|
|
$
|
2,609.4
|
|
|
|
|
$
|
2,542.0
|
|
|
|
Industrial
|
|
|
|
|
|
889.2
|
|
|
|
|
|
861.5
|
|
|
|
|
|
1,741.2
|
|
|
|
|
|
1,595.4
|
|
|
|
Security
|
|
|
|
|
|
601.7
|
|
|
|
|
|
603.9
|
|
|
|
|
|
1,174.4
|
|
|
|
|
|
1,196.0
|
|
|
|
Total
|
|
|
|
|
$
|
2,885.5
|
|
|
|
|
$
|
2,858.2
|
|
|
|
|
$
|
5,525.0
|
|
|
|
|
$
|
5,333.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
$
|
218.2
|
|
|
|
|
$
|
209.9
|
|
|
|
|
$
|
387.3
|
|
|
|
|
$
|
375.9
|
|
|
|
Industrial
|
|
|
|
|
|
150.3
|
|
|
|
|
|
117.6
|
|
|
|
|
|
280.6
|
|
|
|
|
|
207.0
|
|
|
|
Security
|
|
|
|
|
|
67.0
|
|
|
|
|
|
54.7
|
|
|
|
|
|
116.6
|
|
|
|
|
|
112.1
|
|
|
|
Segment Profit
|
|
|
|
|
|
435.5
|
|
|
|
|
|
382.2
|
|
|
|
|
|
784.5
|
|
|
|
|
|
695.0
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
(45.1
|
)
|
|
|
|
|
(53.7
|
)
|
|
|
|
|
(81.6
|
)
|
|
|
|
|
(122.7
|
)
|
|
|
Total
|
|
|
|
|
$
|
390.4
|
|
|
|
|
$
|
328.5
|
|
|
|
|
$
|
702.9
|
|
|
|
|
$
|
572.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
15.6
|
%
|
|
|
|
|
15.1
|
%
|
|
|
|
|
14.8
|
%
|
|
|
|
|
14.8
|
%
|
|
|
Industrial
|
|
|
|
|
|
16.9
|
%
|
|
|
|
|
13.7
|
%
|
|
|
|
|
16.1
|
%
|
|
|
|
|
13.0
|
%
|
|
|
Security
|
|
|
|
|
|
11.1
|
%
|
|
|
|
|
9.1
|
%
|
|
|
|
|
9.9
|
%
|
|
|
|
|
9.4
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
15.1
|
%
|
|
|
|
|
13.4
|
%
|
|
|
|
|
14.2
|
%
|
|
|
|
|
13.0
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
(1.6
|
%)
|
|
|
|
|
(1.9
|
%)
|
|
|
|
|
(1.5
|
%)
|
|
|
|
|
(2.3
|
%)
|
|
|
Total
|
|
|
|
|
|
13.5
|
%
|
|
|
|
|
11.5
|
%
|
|
|
|
|
12.7
|
%
|
|
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER 2014
|
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related Charges1
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
1,053.3
|
|
|
|
|
$
|
0.3
|
|
|
|
|
$
|
1,053.6
|
|
|
% of Net Sales
|
|
|
|
|
|
|
36.5
|
%
|
|
|
|
|
|
|
|
|
36.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
|
662.9
|
|
|
|
|
|
(5.3
|
)
|
|
|
|
$
|
657.6
|
|
|
% of Net Sales
|
|
|
|
|
|
|
23.0
|
%
|
|
|
|
|
|
|
|
|
22.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
390.4
|
|
|
|
|
|
5.6
|
|
|
|
|
|
396.0
|
|
|
% of Net Sales
|
|
|
|
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
|
293.1
|
|
|
|
|
|
4.1
|
|
|
|
|
|
297.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
|
73.7
|
|
|
|
|
|
(5.3
|
)
|
|
|
|
|
68.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
|
218.5
|
|
|
|
|
|
9.4
|
|
|
|
|
|
227.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
|
$
|
1.37
|
|
|
|
|
$
|
0.06
|
|
|
|
|
$
|
1.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Merger and acquisition-related charges relate primarily to
integration and employee-related matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER 2013
|
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related and Other Charges2
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
|
$
|
1,005.7
|
|
|
|
|
$
|
7.9
|
|
|
|
|
$
|
1,013.6
|
|
|
% of Net Sales
|
|
|
|
|
|
|
35.2
|
%
|
|
|
|
|
|
|
|
|
35.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
|
677.2
|
|
|
|
|
|
(24.0
|
)
|
|
|
|
|
653.2
|
|
|
% of Net Sales
|
|
|
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
22.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
|
328.5
|
|
|
|
|
|
31.9
|
|
|
|
|
|
360.4
|
|
|
% of Net Sales
|
|
|
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
12.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
|
|
251.7
|
|
|
|
|
|
5.3
|
|
|
|
|
|
257.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
|
|
54.4
|
|
|
|
|
|
9.1
|
|
|
|
|
|
63.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
|
|
197.6
|
|
|
|
|
|
(3.8
|
)
|
|
|
|
|
193.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
|
|
$
|
1.25
|
|
|
|
|
$
|
(0.03
|
)
|
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 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
|
|
|
|
|
$
|
2,013.5
|
|
|
|
|
$
|
1.4
|
|
|
|
|
$
|
2,014.9
|
|
|
% of Net Sales
|
|
|
|
|
|
36.4
|
%
|
|
|
|
|
|
|
|
|
36.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
1,310.6
|
|
|
|
|
|
(11.6
|
)
|
|
|
|
|
1,299.0
|
|
|
% of Net Sales
|
|
|
|
|
|
23.7
|
%
|
|
|
|
|
|
|
|
|
23.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
702.9
|
|
|
|
|
|
13.0
|
|
|
|
|
|
715.9
|
|
|
% of Net Sales
|
|
|
|
|
|
12.7
|
%
|
|
|
|
|
|
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
506.9
|
|
|
|
|
|
8.0
|
|
|
|
|
|
514.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
120.5
|
|
|
|
|
|
(3.9
|
)
|
|
|
|
|
116.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
385.3
|
|
|
|
|
|
11.9
|
|
|
|
|
|
397.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
$
|
2.42
|
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
2.49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Merger and acquisition-related charges relate primarily to
integration and employee-related matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR TO DATE 2013
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related and Other Charges2
|
|
|
|
Normalized3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
|
|
$
|
1,914.2
|
|
|
|
|
$
|
21.2
|
|
|
|
|
$
|
1,935.4
|
|
|
% of Net Sales
|
|
|
|
|
|
35.9
|
%
|
|
|
|
|
|
|
|
|
36.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
1,341.9
|
|
|
|
|
|
(58.3
|
)
|
|
|
|
|
1,283.6
|
|
|
% of Net Sales
|
|
|
|
|
|
25.2
|
%
|
|
|
|
|
|
|
|
|
24.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating margin
|
|
|
|
|
|
572.3
|
|
|
|
|
|
79.5
|
|
|
|
|
|
651.8
|
|
|
% of Net Sales
|
|
|
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
12.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from continuing operations before income taxes
|
|
|
|
|
345.0
|
|
|
|
|
|
111.4
|
|
|
|
|
|
456.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on continuing operations
|
|
|
|
|
63.1
|
|
|
|
|
|
34.1
|
|
|
|
|
|
97.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from continuing operations
|
|
|
|
|
282.6
|
|
|
|
|
|
77.3
|
|
|
|
|
|
359.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share of common stock
|
|
|
|
$
|
1.78
|
|
|
|
|
$
|
0.49
|
|
|
|
|
$
|
2.27
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER 2014
|
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related Charges1
|
|
|
|
Normalized3
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
$
|
218.2
|
|
|
|
|
$
|
0.2
|
|
|
|
$
|
218.4
|
|
|
|
Industrial
|
|
|
|
|
|
150.3
|
|
|
|
|
|
1.2
|
|
|
|
|
151.5
|
|
|
|
Security
|
|
|
|
|
|
67.0
|
|
|
|
|
|
1.2
|
|
|
|
|
68.2
|
|
|
|
Segment Profit
|
|
|
|
|
|
435.5
|
|
|
|
|
|
2.6
|
|
|
|
|
438.1
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
(45.1
|
)
|
|
|
|
|
3.0
|
|
|
|
|
(42.1
|
)
|
|
|
Total
|
|
|
|
|
$
|
390.4
|
|
|
|
|
$
|
5.6
|
|
|
|
$
|
396.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
15.6
|
%
|
|
|
|
|
|
|
|
|
15.7
|
%
|
|
|
Industrial
|
|
|
|
|
|
16.9
|
%
|
|
|
|
|
|
|
|
|
17.0
|
%
|
|
|
Security
|
|
|
|
|
|
11.1
|
%
|
|
|
|
|
|
|
|
|
11.3
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
15.2
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
(1.6
|
%)
|
|
|
|
|
|
|
|
|
(1.5
|
%)
|
|
|
Total
|
|
|
|
|
|
13.5
|
%
|
|
|
|
|
|
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Merger and acquisition-related charges relate primarily to
integration and employee-related matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER 2013
|
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related Charges2
|
|
|
|
Normalized3
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
$
|
209.9
|
|
|
|
|
$
|
2.8
|
|
|
|
$
|
212.7
|
|
|
|
Industrial
|
|
|
|
|
|
117.6
|
|
|
|
|
|
6.1
|
|
|
|
|
123.7
|
|
|
|
Security
|
|
|
|
|
|
54.7
|
|
|
|
|
|
8.8
|
|
|
|
|
63.5
|
|
|
|
Segment Profit
|
|
|
|
|
|
382.2
|
|
|
|
|
|
17.7
|
|
|
|
|
399.9
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
(53.7
|
)
|
|
|
|
|
14.2
|
|
|
|
|
(39.5
|
)
|
|
|
Total
|
|
|
|
|
$
|
328.5
|
|
|
|
|
$
|
31.9
|
|
|
|
$
|
360.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
15.1
|
%
|
|
|
|
|
|
|
|
|
15.3
|
%
|
|
|
Industrial
|
|
|
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
14.4
|
%
|
|
|
Security
|
|
|
|
|
|
9.1
|
%
|
|
|
|
|
|
|
|
|
10.5
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
14.0
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
(1.9
|
%)
|
|
|
|
|
|
|
|
|
(1.4
|
%)
|
|
|
Total
|
|
|
|
|
|
11.5
|
%
|
|
|
|
|
|
|
|
|
12.6
|
%
|
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
|
|
|
|
|
$
|
387.3
|
|
|
|
|
$
|
0.6
|
|
|
|
$
|
387.9
|
|
|
|
Industrial
|
|
|
|
|
|
280.6
|
|
|
|
|
|
3.4
|
|
|
|
|
284.0
|
|
|
|
Security
|
|
|
|
|
|
116.6
|
|
|
|
|
|
3.5
|
|
|
|
|
120.1
|
|
|
|
Segment Profit
|
|
|
|
|
|
784.5
|
|
|
|
|
|
7.5
|
|
|
|
|
792.0
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
(81.6
|
)
|
|
|
|
|
5.5
|
|
|
|
|
(76.1
|
)
|
|
|
Total
|
|
|
|
|
$
|
702.9
|
|
|
|
|
$
|
13.0
|
|
|
|
$
|
715.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
14.9
|
%
|
|
|
Industrial
|
|
|
|
|
|
16.1
|
%
|
|
|
|
|
|
|
|
|
16.3
|
%
|
|
|
Security
|
|
|
|
|
|
9.9
|
%
|
|
|
|
|
|
|
|
|
10.2
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
14.2
|
%
|
|
|
|
|
|
|
|
|
14.3
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
(1.5
|
%)
|
|
|
|
|
|
|
|
|
(1.4
|
%)
|
|
|
Total
|
|
|
|
|
|
12.7
|
%
|
|
|
|
|
|
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Merger and acquisition-related charges relate primarily to
integration and employee-related matters.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR TO DATE 2013
|
|
|
|
|
|
|
|
Reported
|
|
|
|
Merger & Acquisition- Related Charges2
|
|
|
|
Normalized3
|
|
SEGMENT PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
$
|
375.9
|
|
|
|
|
$
|
6.1
|
|
|
|
$
|
382.0
|
|
|
|
Industrial
|
|
|
|
|
|
207.0
|
|
|
|
|
|
18.5
|
|
|
|
|
225.5
|
|
|
|
Security
|
|
|
|
|
|
112.1
|
|
|
|
|
|
15.2
|
|
|
|
|
127.3
|
|
|
|
Segment Profit
|
|
|
|
|
|
695.0
|
|
|
|
|
|
39.8
|
|
|
|
|
734.8
|
|
|
|
Corporate Overhead
|
|
|
|
|
|
(122.7
|
)
|
|
|
|
|
39.7
|
|
|
|
|
(83.0
|
)
|
|
|
Total
|
|
|
|
|
$
|
572.3
|
|
|
|
|
$
|
79.5
|
|
|
|
$
|
651.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction & DIY
|
|
|
|
|
|
14.8
|
%
|
|
|
|
|
|
|
|
|
15.0
|
%
|
|
|
Industrial
|
|
|
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
14.1
|
%
|
|
|
Security
|
|
|
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
10.6
|
%
|
|
|
Segment Profit
|
|
|
|
|
|
13.0
|
%
|
|
|
|
|
|
|
|
|
13.8
|
%
|
|
|
Corporate Overhead
|
|
|
|
|
|
(2.3
|
%)
|
|
|
|
|
|
|
|
|
(1.6
|
%)
|
|
|
Total
|
|
|
|
|
|
10.7
|
%
|
|
|
|
|
|
|
|
|
12.2
|
%
|
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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