First Quarter Gross Margin Expanded Versus
Prior Year Driven by Lower Inventory Destocking Costs, Supply Chain
Transformation Benefits and Reduced Shipping Costs
Global Cost Reduction Program On-Track for
Expected Pre-Tax Run-Rate Savings of $1.5
Billion by End of 2024 and $2
Billion by End of 2025
NEW
BRITAIN, Conn., May 2, 2024
/PRNewswire/ -- Stanley Black & Decker (NYSE: SWK),
a worldwide leader in tools and outdoor, today announced first
quarter 2024 financial results.
- First Quarter Revenues of $3.9
Billion, Down 2% Versus Prior Year as Growth in DEWALT and
Engineered Fastening Was More Than Offset by Lower Infrastructure
Volume and Muted Consumer and DIY Demand
- First Quarter Gross Margin Was 28.6%, Up 740 Basis Points
Versus Prior Year; First Quarter Adjusted Gross Margin* Was 29.0%,
Up 590 Basis Points Versus Prior Year
- First Quarter GAAP EPS Was $0.13;
First Quarter Adjusted EPS* Was $0.56
- Completed STANLEY Infrastructure Divestiture on April 1; Net Proceeds Used to Reduce Short-Term
Debt
- Reiterating 2024 Full Year Guidance – Expect GAAP EPS of
$1.60 to $2.85, Adjusted EPS* of $3.50 to $4.50 and
Free Cash Flow* of $0.6 Billion to
$0.8 Billion
Donald Allan, Jr., Stanley Black & Decker's President &
CEO, commented, "Our first quarter performance was the result of
consistent, solid execution and continued progress against key
operational objectives. We continue to see significant value
creation opportunities tied to our strategic business
transformation, and we remain focused on disciplined execution of
our strategy. Looking forward, we expect mixed demand trends to
persist across our businesses in 2024, and we are driving supply
chain cost improvements designed to expand margins, deliver
earnings growth and generate strong cash flow. At the same
time, the long-term growth and market share gains we are focused on
achieving will be driven by introducing exciting new products
within our most powerful brands designed to deliver enhanced
productivity for end users. We are funding growth investments
intended to further accelerate innovation and differentiated market
activation to capture these compelling long-term
opportunities.
"Stanley Black & Decker
continues to become a more streamlined business, built on the
strength of our people and culture, with an intensified focus on
our core market leadership positions in Tools & Outdoor and
Industrial. I am confident that by executing our strategy, we are
positioning the Company to deliver higher levels of organic revenue
growth*, profitability and cash flow to drive strong long-term
shareholder returns."
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
The Company's primary areas of multi-year strategic focus remain
unchanged:
- Advancing innovation, electrification, and global market
penetration to achieve organic revenue growth* of 2 to 3 times the
market
- Streamlining and simplifying the organization, and investing in
initiatives that more directly impact our customers and end
users
- Returning adjusted gross margins* to historical 35%+ levels by
accelerating the operations and supply chain transformation to
improve fill rates and better match inventory with customer
demand
- Prioritizing cash flow generation and inventory
optimization
1Q'24 Key Points:
- Net sales for the quarter were $3.9
billion, down 2% versus prior year due to volume (-1%) and
currency (-1%).
- Gross margin for the quarter was 28.6%, up versus the prior
year rate of 21.2%. Adjusted gross margin* was 29.0%, up versus the
prior year rate of 23.1% primarily due to lower inventory
destocking costs, supply chain transformation benefits and lower
shipping costs.
- SG&A expenses were 22.0% of sales for the quarter versus
21.0% in the prior year. Excluding charges, first quarter adjusted
SG&A expenses* were 21.5% of sales versus 20.5% in the prior
year, as the Company increased investment in innovation and growth
initiatives.
- Net earnings were 0.5% of sales, up 530 basis points versus the
prior year. First quarter EBITDA* was 7.1% of sales. First quarter
adjusted EBITDA* was 8.9% of sales, up 440 basis points versus
prior year.
- The sale of STANLEY Infrastructure closed on April 1 for $760
million, impact of which is not reflected in the quarter end
balance sheet. Proceeds net of customary closing adjustments, fees
and taxes were used to reduce short-term debt in the second
quarter.
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
1Q'24 Segment Results
($ in M)
|
|
|
Sales
|
Segment
Profit
|
Charges1
|
Adjusted
Segment
Profit*
|
Segment
Margin
|
Adjusted
Segment
Margin*
|
Tools &
Outdoor
|
$3,285
|
$255.7
|
$22.9
|
$278.6
|
7.8 %
|
8.5 %
|
|
|
|
|
|
|
|
Industrial
|
$585
|
$65.2
|
$5.7
|
$70.9
|
11.1 %
|
12.1 %
|
|
1 See
Non-GAAP Adjustments On Page 4
|
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
- Tools & Outdoor net sales were down 1% versus first quarter
2023 as volume growth in DEWALT was more than offset by a muted
market demand backdrop which contributed to lower volume (-1%).
Regional year-over-year organic revenue* included: North America (-2%), Europe (-3%) and rest of world (+7%). First
quarter U.S. retail point-of-sale demand was down modestly versus
the prior year with modest growth in outdoor. The Tools &
Outdoor segment margin was 7.8%, up 720 basis points versus prior
year. Adjusted segment margin* was 8.5%, up 550 basis points versus
first quarter 2023, primarily due to lower inventory destocking
costs, supply chain transformation benefits and reduced shipping
costs, which were partially offset by increased growth
investments.
- Industrial net sales were down 5% versus first quarter 2023 as
price (+1%) was more than offset by lower volume (-5%), exclusively
in Infrastructure, and currency (-1%). Engineered Fastening organic
revenues* were up 5%, with aerospace and automotive growth, which
was partially offset by general industrial market softness. The
Industrial segment margin was 11.1%, up 20 basis points versus
prior year. The adjusted segment margin* was 12.1%, up 110 basis
points versus first quarter 2023 due to price realization and cost
control.
Global Cost Reduction Program Supporting Gross Margin
Expansion
The Company continued executing a series of initiatives that are
expected to generate $1.5 billion of
pre-tax run-rate cost savings by the end of 2024, growing to
$2 billion by the end of 2025.
Of the $2 billion savings,
$1.5 billion is expected to be
delivered through a supply chain transformation that leverages
strategic sourcing, drives operational excellence, consolidates
facilities and optimizes the distribution network, and reduces
complexity of the product portfolio.
These actions are expected to return adjusted gross margins* to
historical 35%+ levels. Additionally, the Global Cost Reduction
Program is expected to optimize the Company's cost base to fund
investments that accelerate growth in core businesses.
The Global Cost Reduction Program generated incremental pre-tax
run-rate cost savings in first quarter 2024 of $145 million. Since inception of the program in
mid-2022, the Company has generated approximately $1.2 billion in pre-tax run-rate savings and
reduced inventory by $1.9
billion.
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
2024 Outlook
Patrick D. Hallinan, Executive
Vice President and CFO, commented, "The actions we are taking to
advance our strategic transformation are progressing successfully,
and despite the tepid market backdrop so far in 2024, our
profitability remains on an upward trajectory. We will continue our
disciplined approach to cost management as we drive toward our
target of 35%+ adjusted gross margins* while funding additional
organic revenue growth* investments. The organization is focused on
delivering margin expansion, cash generation and balance sheet
strength, while working together to position the Company for
long-term growth and value creation."
Management is reiterating 2024 guidance and expects EPS to be in
the range of $1.60 to $2.85 on a GAAP basis, adjusted EPS* between
$3.50 to $4.50 and free cash flow* to approximate
$0.6 billion to $0.8 billion.
The difference between 2024 GAAP and adjusted EPS* guidance is
approximately $1.65 to $1.90, consisting primarily of charges related to
the supply chain transformation under the Global Cost Reduction
Program.
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
Non-GAAP Adjustments
Total pre-tax non-GAAP adjustments in the first quarter of 2024
were $71.5 million, primarily related
to a non-cash impairment charge, footprint actions and other costs
related to the supply chain transformation, and restructuring
costs. Gross profit included $14.4
million of charges, while SG&A included $20.1 million. Other, net included a net benefit
of $3.5 million, and Restructuring
included $15.0 million of charges. In
addition, in the first quarter of 2024, the Company recognized a
$25.5 million non-cash asset
impairment charge related to the Infrastructure business.
Earnings Webcast
Stanley Black & Decker will
host a webcast with investors today, May 2,
2024, at 8:00 am ET. A
slide presentation, which will accompany the call, will be
available on the "Investors" section of the Company's website at
www.stanleyblackanddecker.com/investors and will remain available
after the call.
The call will be available through a live, listen-only webcast
or teleconference. Links to access the webcast, register for
the teleconference, and view the accompanying slide presentation
will be available on the "Investors" section of the Company's
website, www.stanleyblackanddecker.com/investors under the
subheading "News & Events." A replay will also be
available two hours after the call and can be accessed on the
"Investors" section of Stanley Black
& Decker's website.
About Stanley Black &
Decker
Headquartered in the USA,
Stanley Black & Decker (NYSE:
SWK) is a worldwide leader in Tools and Outdoor, operating
manufacturing facilities globally. The Company's more than 50,000
diverse and high-performing employees produce innovative end-user
inspired power tools, hand tools, storage, digital jobsite
solutions, outdoor and lifestyle products, and engineered fasteners
to support the world's builders, tradespeople and DIYers. The
Company's world class portfolio of trusted brands includes DEWALT®,
CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and Cub Cadet®. To learn more
visit: www.stanleyblackanddecker.com.
Investor Contacts:
Dennis Lange
Vice President, Investor Relations
dennis.lange@sbdinc.com
(860) 827-3833
Christina Francis
Director, Investor Relations
christina.francis@sbdinc.com
(860) 438-3470
Media Contacts:
Debora Raymond
Vice President, Public Relations
debora.raymond@sbdinc.com
(203) 640-8054
Non-GAAP Financial Measures
Organic revenue or organic sales is defined as the difference
between total current and prior year sales less the impact of
companies acquired and divested in the past twelve months and any
foreign currency impacts. Organic revenue growth, organic sales
growth or organic growth is organic revenue or organic sales
divided by prior year sales. Gross profit is defined as sales less
cost of sales. Gross margin is gross profit as a percentage of
sales. Segment profit is defined as sales less cost of sales and
selling, general and administrative ("SG&A") expenses (aside
from corporate overhead expense). Segment margin is segment profit
as a percentage of sales. EBITDA is earnings before interest,
taxes, depreciation and amortization. EBITDA margin is EBITDA as a
percentage of sales. Gross profit, gross margin, SG&A,
segment profit, segment margin, EBITDA and EBITDA margin are
adjusted for certain gains and charges, such as supply chain
transformation costs, acquisition and divestiture-related items,
asset impairments, restructuring, and other adjusting items.
Management uses these metrics as key measures to assess the
performance of the Company as a whole, as well as the related
measures at the segment level. Adjusted earnings per share or
adjusted EPS, is diluted GAAP EPS excluding certain gains and
charges. 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 and is useful information for investors. Free cash flow
does not include deductions for mandatory debt service, other
borrowing activity, discretionary dividends on the Company's common
stock and business acquisitions, among other items. Free cash
flow conversion is defined as free cash flow divided by net income.
The Non-GAAP statement of operations and business segment
information is reconciled to GAAP on pages 12 through 14 and in the
appendix to the earnings conference call slides available at
http://www.stanleyblackanddecker.com/investors. The Company
considers the use of the Non-GAAP financial measures above relevant
to aid analysis and understanding of the Company's results,
business trends and outlook measures aside from the material impact
of certain gains and charges and ensures appropriate comparability
to operating results of prior periods.
The Company also provides expectations for the non-GAAP
financial measures of adjusted EPS, presented on a basis excluding
certain gains and charges, as well as free cash flow. Forecasted
adjusted EPS is reconciled to GAAP EPS on page 4. Due to high
variability and difficulty in predicting items that impact cash
flow from operations, a reconciliation of forecasted free cash flow
to its most directly comparable GAAP estimate has been omitted. The
Company believes such a reconciliation would also imply a degree of
precision that is inappropriate for this forward-looking
measure.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
This document contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
All statements other than statements of historical fact are
"forward-looking statements" for purposes of federal and state
securities laws, including, but not limited to, any projections or
guidance of earnings, revenue, profitability or other financial
items; any statements of the plans, strategies and objectives of
management for future operations; any statements concerning
proposed new products, services or developments; any statements
regarding future economic conditions or performance; any statements
of belief; and any statements of assumptions underlying any of the
foregoing. Forward-looking statements may include, among others,
the words "may," "will," "estimate," "intend," "could," "project,"
"plan," "continue," "believe," "expect," "anticipate", "run-rate",
"annualized", "forecast", "commit", "goal", "target", "design", "on
track", "position or positioning", "guidance" or any other similar
words.
Although the Company believes that the expectations reflected in
any of its forward-looking statements are reasonable, actual
results could differ materially from those projected or assumed in
any of its forward-looking statements. The Company's future
financial condition and results of operations, as well as any
forward-looking statements, are subject to change and to inherent
risks and uncertainties, such as those disclosed or incorporated by
reference in the Company's filings with the Securities and Exchange
Commission.
Important factors that could cause the Company's actual results,
performance and achievements, or industry results to differ
materially from estimates or projections contained in its
forward-looking statements include, among others, the following:
(i) successfully developing, marketing and achieving sales from new
products and services and the continued acceptance of current
products and services; (ii) macroeconomic factors, including global
and regional business conditions, commodity prices, inflation and
deflation, interest rate volatility, currency exchange rates, and
uncertainties in the global financial markets related to the recent
failures of several financial institutions; (iii) laws, regulations
and governmental policies affecting the Company's activities in the
countries where it does business, including those related to
tariffs, taxation, data privacy, anti-bribery, anti-corruption,
government contracts and trade controls such as section 301 tariffs
and section 232 steel and aluminum tariffs; (iv) the economic,
political, cultural and legal environment in Europe and the emerging markets in which the
Company generates sales, particularly Latin America and China; (v) realizing the anticipated benefits
of mergers, acquisitions, joint ventures, strategic alliances or
divestitures; (vi) pricing pressure and other changes within
competitive markets; (vii) availability and price of raw materials,
component parts, freight, energy, labor and sourced finished goods;
(viii) the impact that the tightened credit markets may have on the
Company or its customers or suppliers; (ix) the extent to which the
Company has to write off accounts receivable, inventory or other
assets or experiences supply chain disruptions in connection with
bankruptcy filings by customers or suppliers; (x) the Company's
ability to identify and effectively execute productivity
improvements and cost reductions; (xi) potential business, supply
chain and distribution disruptions, including those related to
physical security threats, information technology or cyber-attacks,
epidemics, natural disasters or pandemics, sanctions, political
unrest, war or terrorism, including the conflicts between
Russia and Ukraine, and Israel and Hamas, and tensions or conflicts in
South Korea, China and Taiwan; (xii) the continued consolidation of
customers, particularly in consumer channels, and the Company's
continued reliance on significant customers; (xiii) managing
franchisee relationships; (xiv) the impact of poor weather
conditions and climate change and risks related to the transition
to a lower-carbon economy, such as the Company's ability to
successfully adopt new technology, meet market-driven demands for
carbon neutral and renewable energy technology, or to comply with
more stringent and increasingly complex environmental regulations
or requirements for its manufacturing facilities and business
operations; (xv) failure to meet environmental, social and
governance (ESG) expectations or standards, or achieve its ESG
goals; (xvi) maintaining or improving production rates in the
Company's manufacturing facilities, responding to significant
changes in customer preferences, product demand and fulfilling
demand for new and existing products, and learning, adapting and
integrating new technologies into products, services and processes;
(xvii) changes in the competitive landscape in the Company's
markets; (xviii) the Company's non-U.S. operations, including sales
to non-U.S. customers; (xix) the impact from demand changes within
world-wide markets associated with homebuilding and remodeling;
(xx) potential adverse developments in new or pending litigation
and/or government investigations; (xxi) the incurrence of debt and
changes in the Company's ability to obtain debt on commercially
reasonable terms and at competitive rates; (xxii) substantial
pension and other postretirement benefit obligations; (xxiii)
potential regulatory liabilities, including environmental, privacy,
data breach, workers compensation and product liabilities; (xxiv)
attracting, developing and retaining senior management and other
key employees, managing a workforce in many jurisdictions, labor
shortages, work stoppages or other labor disruptions; (xxv) the
Company's ability to keep abreast with the pace of technological
change; (xxvi) changes in accounting estimates; (xxvii) the
Company's ability to protect its intellectual property rights and
to maintain its public reputation and the strength of its brands;
and (xxviii) the Company's ability to implement, and achieve the
expected benefits (including cost savings and reduction in working
capital) from, its Global Cost Reduction Program including:
continuing to advance innovation, electrification and global market
penetration to achieve organic revenue growth of 2-3 times the
market; streamlining and simplifying the organization, and
investing in initiatives that more directly impact the Company's
customers and end users; returning adjusted gross margins* to
historical 35%+ levels by accelerating the supply chain
transformation to leverage strategic sourcing, drive operational
excellence, consolidate facilities, optimize the distribution
network and reduce complexity of the product portfolio; improving
fill rates and matching inventory with customer demand;
prioritizing cash flow generation and inventory optimization;
executing the SBD Operating Model to deliver operational excellence
through efficiency, simplified organizational design; and reducing
complexity through platforming products and implementing
initiatives to drive a SKU reduction.
Additional factors that could cause actual results to differ
materially from forward-looking statements are set forth in the
Annual Report on Form 10-K and in the Quarterly Reports on Form
10-Q, including under the headings "Risk Factors," and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and in the Consolidated Financial Statements
and the related Notes.
Forward-looking statements in this press release speak only as
of the date hereof, and forward-looking statements in documents
that are incorporated by reference herein speak only as of the date
of those documents. The Company does not undertake any obligation
or intention to update or revise any forward-looking statements,
whether as a result of future events or circumstances, new
information or otherwise, except as required by law.
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(Unaudited, Millions
of Dollars Except Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
NET
SALES
|
|
$ 3,869.5
|
|
$
3,931.8
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
Cost of
sales
|
|
2,761.0
|
|
3,096.3
|
|
|
|
Gross profit
|
|
1,108.5
|
|
835.5
|
|
|
|
% of Net
Sales
|
|
28.6 %
|
|
21.2 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
851.8
|
|
825.1
|
|
|
|
% of Net
Sales
|
|
22.0 %
|
|
21.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Other - net
|
|
80.0
|
|
63.7
|
|
|
|
Loss on sales of
businesses
|
|
-
|
|
7.6
|
|
|
|
Asset impairment
charge
|
|
25.5
|
|
-
|
|
|
|
Restructuring
charges
|
|
15.0
|
|
12.1
|
|
|
|
Income (loss) from
operations
|
|
136.2
|
|
(73.0)
|
|
|
|
Interest -
net
|
|
87.9
|
|
91.1
|
|
|
EARNINGS (LOSS)
BEFORE INCOME TAXES
|
|
48.3
|
|
(164.1)
|
|
|
|
Income taxes
|
|
28.8
|
|
23.7
|
|
|
NET EARNINGS
(LOSS)
|
|
$
19.5
|
|
$
(187.8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS)
PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
Basic
|
|
$
0.13
|
|
$
(1.26)
|
|
|
|
Diluted
|
|
$
0.13
|
|
$
(1.26)
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER
SHARE OF COMMON STOCK
|
|
$
0.81
|
|
$
0.80
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE
SHARES OUTSTANDING (in thousands)
|
|
|
|
|
|
|
Basic
|
|
150,235
|
|
149,574
|
|
|
|
Diluted
|
|
150,941
|
|
149,574
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
March
30,
|
|
December
30,
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
476.6
|
|
$
449.4
|
|
Accounts and notes
receivable, net
|
|
1,708.9
|
|
1,302.0
|
|
Inventories,
net
|
|
4,693.3
|
|
4,738.6
|
|
Current assets held for
sale
|
|
136.3
|
|
140.8
|
|
Other current
assets
|
|
405.7
|
|
386.5
|
|
Total current assets
|
|
7,420.8
|
|
7,017.3
|
|
Property, plant and
equipment, net
|
|
2,115.9
|
|
2,169.9
|
|
Goodwill and other
intangibles, net
|
|
11,857.8
|
|
11,945.5
|
|
Long-term assets held
for sale
|
|
691.2
|
|
716.8
|
|
Other assets
|
|
1,768.2
|
|
1,814.3
|
|
Total assets
|
|
$
23,853.9
|
|
$
23,663.8
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY
|
|
|
|
|
Short-term
borrowings
|
|
$
1,740.4
|
|
$
1,074.8
|
|
Current maturities of
long-term debt
|
|
500.0
|
|
1.1
|
|
Accounts
payable
|
|
2,337.5
|
|
2,298.9
|
|
Accrued
expenses
|
|
2,206.5
|
|
2,464.3
|
|
Current liabilities
held for sale
|
|
45.0
|
|
44.1
|
|
Total current liabilities
|
|
6,829.4
|
|
5,883.2
|
|
Long-term
debt
|
|
5,602.1
|
|
6,101.0
|
|
Long-term liabilities
held for sale
|
|
83.4
|
|
84.8
|
|
Other long-term
liabilities
|
|
2,462.6
|
|
2,538.7
|
|
Shareowners'
equity
|
|
8,876.4
|
|
9,056.1
|
|
Total liabilities and shareowners' equity
|
$
23,853.9
|
|
$
23,663.8
|
STANLEY BLACK
& DECKER, INC. AND SUBSIDIARIES
|
SUMMARY OF CASH FLOW
ACTIVITY
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024
|
|
2023
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
|
$
19.5
|
|
$
(187.8)
|
|
|
Depreciation and
amortization
|
|
|
140.2
|
|
161.2
|
|
|
Loss on sales of
businesses
|
|
|
-
|
|
7.6
|
|
|
Asset impairment
charge
|
|
|
25.5
|
|
-
|
|
|
Changes in working
capital1
|
|
|
(359.8)
|
|
(181.2)
|
|
|
Other
|
|
|
|
(256.4)
|
|
(86.1)
|
|
|
Net cash used in
operating activities
|
|
|
(431.0)
|
|
(286.3)
|
|
|
|
|
|
|
|
|
|
|
INVESTING AND
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
Capital and software
expenditures
|
|
|
(65.7)
|
|
(68.2)
|
|
|
Proceeds from debt
issuances, net of fees
|
|
|
-
|
|
747.2
|
|
|
Net short-term
commercial paper borrowings (repayments)
|
|
|
674.9
|
|
(285.9)
|
|
|
Proceeds from issuances
of common stock
|
|
|
3.8
|
|
3.1
|
|
|
Purchases of common
stock for treasury
|
|
|
(6.3)
|
|
(4.8)
|
|
|
Cash dividends on
common stock
|
|
|
(121.8)
|
|
(119.8)
|
|
|
Effect of exchange rate
changes on cash
|
|
|
(27.6)
|
|
9.1
|
|
|
Other
|
|
|
|
0.5
|
|
(8.6)
|
|
|
Net cash provided by
investing and financing activities
|
|
|
457.8
|
|
272.1
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
26.8
|
|
(14.2)
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
|
454.6
|
|
404.9
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, end of period
|
|
|
$
481.4
|
|
$
390.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Computation2
|
|
|
|
|
|
|
Net cash used in
operating activities
|
|
|
$
(431.0)
|
|
$
(286.3)
|
|
Less: capital and
software expenditures
|
|
|
(65.7)
|
|
(68.2)
|
|
Free cash flow (before
dividends)
|
|
|
$
(496.7)
|
|
$
(354.5)
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash, Cash Equivalents and
Restricted Cash
|
|
|
|
|
|
|
|
|
|
|
|
March 30,
2024
|
|
December 30,
2023
|
|
Cash and cash
equivalents
|
|
|
$
476.6
|
|
$
449.4
|
|
Restricted cash
included in Other current assets
|
|
|
1.5
|
|
4.6
|
|
Cash and cash
equivalents included in Current assets held for sale
|
|
|
3.3
|
|
0.6
|
|
Cash, cash equivalents
and restricted cash
|
|
|
$
481.4
|
|
$
454.6
|
|
|
|
|
|
|
|
|
|
1
|
Working capital is
comprised of accounts receivable, inventory, accounts payable and
deferred revenue.
|
2
|
Free cash flow is
defined as cash flow from operations less capital and software
expenditures. Management considers free
cash flow an important measure of its liquidity, as well as its
ability to fund future growth and to provide a return to the
shareowners, and is useful information for investors. Free cash
flow does not include deductions for mandatory debt service,
other borrowing activity, discretionary dividends on the Company's
common stock and business acquisitions, among other
items.
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
BUSINESS SEGMENT
INFORMATION
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
2024
|
|
2023
|
|
|
|
|
NET
SALES
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
3,284.6
|
|
$
3,315.4
|
|
Industrial
|
|
584.9
|
|
616.4
|
|
Total
|
|
$
3,869.5
|
|
$
3,931.8
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
255.7
|
|
$
18.7
|
|
Industrial
|
|
65.2
|
|
67.4
|
|
Segment
Profit
|
|
320.9
|
|
86.1
|
|
Corporate
Overhead
|
|
(64.2)
|
|
(75.7)
|
|
Total
|
|
$
256.7
|
|
$
10.4
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
Tools &
Outdoor
|
|
7.8 %
|
|
0.6 %
|
|
Industrial
|
|
11.1 %
|
|
10.9 %
|
|
Segment
Profit
|
|
8.3 %
|
|
2.2 %
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
|
NON-GAAP FINANCIAL
MEASURES
|
(Unaudited, Millions
of Dollars Except Per Share Amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2024
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP1
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
1,108.5
|
|
$
14.4
|
|
$
1,122.9
|
|
|
% of Net
Sales
|
|
28.6 %
|
|
|
|
29.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
851.8
|
|
(20.1)
|
|
831.7
|
|
|
% of Net
Sales
|
|
22.0 %
|
|
|
|
21.5 %
|
|
|
|
|
|
|
|
|
|
|
|
Earnings before income
taxes
|
|
48.3
|
|
71.5
|
|
119.8
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
28.8
|
|
6.8
|
|
35.6
|
|
|
|
|
|
|
|
|
|
|
|
Net
earnings
|
|
19.5
|
|
64.7
|
|
84.2
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock
|
$
0.13
|
|
$
0.43
|
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2023
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP1
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
835.5
|
|
$
73.4
|
|
$
908.9
|
|
|
% of Net
Sales
|
|
21.2 %
|
|
|
|
23.1 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
825.1
|
|
(20.7)
|
|
804.4
|
|
|
% of Net
Sales
|
|
21.0 %
|
|
|
|
20.5 %
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(164.1)
|
|
106.8
|
|
(57.3)
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
23.7
|
|
(20.4)
|
|
3.3
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(187.8)
|
|
127.2
|
|
(60.6)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share
of common stock
|
$
(1.26)
|
|
$
0.85
|
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
The Non-GAAP 2024 and
2023 information, as reconciled to GAAP above, is considered
relevant to aid analysis and
understanding of the Company's results, business trends and outlook
measures aside from the material impact of certain gains
and charges and ensures appropriate comparability to operating
results of prior periods. See further detail on Non-GAAP
adjustments on page 14.
|
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP SEGMENT PROFIT FINANCIAL MEASURES TO
CORRESPONDING
|
NON-GAAP FINANCIAL
MEASURES
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2024
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments1
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
255.7
|
|
$
22.9
|
|
$
278.6
|
|
|
|
Industrial
|
|
65.2
|
|
5.7
|
|
70.9
|
|
|
|
Segment
Profit
|
|
320.9
|
|
28.6
|
|
349.5
|
|
|
|
Corporate
Overhead
|
|
(64.2)
|
|
5.9
|
|
(58.3)
|
|
|
|
Total
|
|
$
256.7
|
|
$
34.5
|
|
$
291.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
7.8 %
|
|
|
|
8.5 %
|
|
|
|
Industrial
|
|
11.1 %
|
|
|
|
12.1 %
|
|
|
|
Segment
Profit
|
|
8.3 %
|
|
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Non-GAAP adjustments
relate primarily to footprint actions associated with the supply
chain transformation and
transition services costs related to previously divested
businesses.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FIRST QUARTER
2023
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments2
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
18.7
|
|
$
79.2
|
|
$
97.9
|
|
|
|
Industrial
|
|
67.4
|
|
0.3
|
|
67.7
|
|
|
|
Segment
Profit
|
|
86.1
|
|
79.5
|
|
165.6
|
|
|
|
Corporate
Overhead
|
|
(75.7)
|
|
14.6
|
|
(61.1)
|
|
|
|
Total
|
|
$
10.4
|
|
$
94.1
|
|
$
104.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
0.6 %
|
|
|
|
3.0 %
|
|
|
|
Industrial
|
|
10.9 %
|
|
|
|
11.0 %
|
|
|
|
Segment
Profit
|
|
2.2 %
|
|
|
|
4.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
Non-GAAP adjustments
relate primarily to footprint actions and other costs associated
with the supply chain
transformation and integration-related costs.
|
|
3
|
The Non-GAAP 2024 and
2023 business segment information, as reconciled to GAAP above, is
considered relevant to
aid analysis and understanding of the Company's results, business
trends and outlook measures aside from the material
impact of certain gains and charges and ensures appropriate
comparability to operating results of prior periods.
|
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP EARNINGS (LOSS) TO EBITDA
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
2024
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings
(loss)
|
|
$
19.5
|
|
$
(187.8)
|
|
% of Net
Sales
|
|
0.5 %
|
|
-4.8 %
|
|
|
|
|
|
|
|
Interest -
net
|
|
87.9
|
|
91.1
|
|
Income taxes
|
|
28.8
|
|
23.7
|
|
Depreciation and
amortization
|
|
140.2
|
|
161.2
|
|
EBITDA1
|
|
$
276.4
|
|
$
88.2
|
|
% of Net
Sales
|
|
7.1 %
|
|
2.2 %
|
|
|
|
|
|
|
|
Non-GAAP Adjustments
before income taxes
|
|
71.5
|
|
106.8
|
|
|
|
|
|
|
|
Less: Accelerated
depreciation included in Non-GAAP Adjustments before income
taxes
|
|
5.3
|
|
17.5
|
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
|
$
342.6
|
|
$
177.5
|
|
% of Net
Sales
|
|
8.9 %
|
|
4.5 %
|
|
|
|
|
|
|
1
|
EBITDA is earnings
before interest, taxes, depreciation and amortization. Adjusted
EBITDA represents EBITDA excluding certain
gains and charges, as summarized below. EBITDA and Adjusted EBITDA,
both Non-GAAP measures, are considered relevant to aid
analysis and understanding of the Company's operating results and
ensures appropriate comparability to prior periods.
|
|
|
|
|
|
|
|
SUMMARY OF NON-GAAP
ADJUSTMENTS BEFORE INCOME TAXES
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
FIRST
QUARTER
|
|
|
|
2024
|
|
2023
|
|
Supply Chain
Transformation Costs:
|
|
|
|
|
|
Footprint
Rationalization2
|
|
$
8.4
|
|
$
59.3
|
|
Strategic Sourcing
& Operational Excellence3
|
|
5.8
|
|
14.1
|
|
Facility-related
costs
|
|
0.7
|
|
0.7
|
|
Voluntary retirement
program
|
|
-
|
|
(0.1)
|
|
Other charges
(gains)
|
|
(0.5)
|
|
(0.6)
|
|
Gross Profit
|
|
$
14.4
|
|
$
73.4
|
|
|
|
|
|
|
|
Supply Chain
Transformation Costs:
|
|
|
|
|
|
Footprint
Rationalization2
|
|
$
7.5
|
|
$
0.1
|
|
Complexity
Reduction
|
|
0.3
|
|
0.1
|
|
Acquisition &
integration-related costs4
|
|
2.8
|
|
10.1
|
|
Transition services
costs related to previously divested businesses
|
|
5.5
|
|
12.8
|
|
Voluntary retirement
program
|
|
-
|
|
(0.9)
|
|
Other charges
(gains)
|
|
4.0
|
|
(1.5)
|
|
Selling, general and
administrative
|
|
$
20.1
|
|
$
20.7
|
|
|
|
|
|
|
|
Other,
net5
|
|
$
(3.5)
|
|
$
(7.0)
|
|
Loss on sales of
businesses
|
|
-
|
|
7.6
|
|
Asset impairment
charge6
|
|
25.5
|
|
-
|
|
Restructuring
charges
|
|
15.0
|
|
12.1
|
|
Earnings (loss) before
income taxes
|
|
$
71.5
|
|
$
106.8
|
|
|
|
|
|
|
2
|
Footprint
Rationalization costs in 2024 primarily relate to accelerated
depreciation of production equipment of $4.9 million and other
facility exit and re-configuration costs of $10.0 million. In 2023,
transfers and closures of targeted manufacturing sites, including
Fort Worth, Texas
and Cheraw, South Carolina as previously announced in March 2023,
resulted in accelerated depreciation of production equipment of
$17.0 million
and non-cash asset write-downs of $42.2 million (predominantly
tooling, raw materials and WIP).
|
|
|
|
|
|
|
3
|
Strategic Sourcing
& Operational Excellence costs in 2023 primarily relate to
third-party consultant fees to provide expertise in identifying
and
quantifying opportunities to source in a more integrated manner and
re-design in-plant operations following footprint rationalization,
developing
a detailed program and related governance, and assisting the
Company with the implementation of actions necessary to achieve the
related objectives.
|
|
|
|
|
|
|
4
|
Acquisition &
integration-related costs primarily relate to the MTD and Excel
acquisitions, including costs to integrate the organizations
and
shared processes, as well as harmonize key IT applications and
infrastructure.
|
|
|
|
|
|
|
5
|
Includes deal-related
costs, net of income related to providing transition services to
previously divested businesses.
|
|
|
|
|
|
|
6
|
The $25.5 million
pre-tax asset impairment charge in 2024 related to the
Infrastructure business.
|
|
|
|
|
|
|
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SOURCE Stanley Black &
Decker, Inc.