Momentum in Strategic Transformation Supports
Improved Profitability Expectations in 2024; Global Cost Reduction
Program On-Track for Expected $2
Billion Run-Rate Savings by End of 2025
Fourth Quarter Gross Margin Expanded
Sequentially Driven by Accelerated Supply Chain Actions to Counter
Reduced Volumes, and Lower Shipping Costs
Generated Full Year Cash From Operating
Activities of $1.2 Billion and Free
Cash Flow* of $853 Million; Inventory
Reduced by $1.9 Billion Since
Mid-2022
NEW
BRITAIN, Conn., Feb. 1, 2024
/PRNewswire/ -- Stanley Black &
Decker (NYSE: SWK), a worldwide leader in tools and outdoor,
today announced fourth quarter and full year 2023 financial
results.
- Full Year Revenues of $15.8
Billion and Fourth Quarter Revenues of $3.7 Billion, Down Versus Prior Year Primarily
Due to Lower Outdoor and DIY Volume as well as Infrastructure
Customer Destocking
- Fourth Quarter Gross Margin Was 29.6%, Up 10.7 Points Versus
Prior Year; Fourth Quarter Adjusted Gross Margin* Was 29.8%, Up
10.3 Points Versus Prior Year
- Fourth Quarter GAAP EPS Was ($1.84); Fourth Quarter Adjusted EPS* Was
$0.92. Full Year GAAP EPS Was
($1.88); Full Year Adjusted EPS* Was
$1.45
- Fourth Quarter Cash From Operating Activities Was $769 Million; Fourth Quarter Free Cash Flow* Was
$647 Million
- Announced Agreement in December to Divest STANLEY
Infrastructure for $760 Million in
Cash
- Guiding 2024 Full Year Diluted GAAP EPS of $1.60 to $2.85 and
Adjusted EPS* of $3.50 to
$4.50; Free Cash Flow* Expected to
Approximate $0.6 Billion to
$0.8 Billion
Donald Allan, Jr., Stanley Black & Decker's President &
CEO, commented, "Our performance in 2023 reflects our relentless
focus on the successful execution of the strategic business
transformation objectives and supports a strong foundation for
improved profitability in 2024. Stanley
Black & Decker today is 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. Despite a challenging market backdrop
that lowered volume expectations throughout the year, our
disciplined efforts drove adjusted gross margin* improvements in
each quarter and strong free cash flow* consistent with our plan,
two of our most important areas of focus for 2023.
"As we look ahead to 2024, we expect relative strength in
professional tools and some of our industrial markets and are
prepared for weak consumer and outdoor demand trends to
persist. Our plan for the year is underpinned by supply chain
cost improvements that are broadly in our control to deliver
earnings growth and strong cash generation. This improved
performance will fund additional investments to further accelerate
end-user inspired innovation and differentiated market activation
designed to capture the compelling long-term share gain
opportunities in the markets we serve.
"Stepping back, over the past year and a half we have
transformed Stanley Black &
Decker into a different company - refocused and reenergized - and 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 3x 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
4Q'23 Key Points:
- Net sales for the quarter were $3.7
billion, down 6% versus prior year as volume (-7%) was
moderately offset by currency (+1%).
- Inventory at the end of the quarter was $4.7 billion, down approximately $240 million from the prior quarter and
$1.1 billion versus the end of 2022
driven by the Company's focus on optimizing inventory with
approximately $100 million reduction
attributable to the Infrastructure business held for sale
accounting.
- Gross margin for the quarter was 29.6%, up 280 basis points
sequentially versus the third quarter 2023. Adjusted gross margin*
was 29.8%, up 220 basis points sequentially from third quarter
2023. Adjusted gross margin* was up versus the prior year rate of
19.5% as lower inventory destocking costs, supply chain
transformation benefits and lower shipping costs more than offset
the impact from lower volume.
- SG&A expenses were 22.3% of sales for the quarter versus
19.0% in the prior year. Excluding charges, fourth quarter adjusted
SG&A expenses* were 21.7% of sales versus 18.3% in the prior
year, as the Company invested more in growth initiatives and
realized higher variable compensation expense.
- Net loss from continuing operations was (7.4%) of sales, down
490 basis points versus prior year. Fourth quarter EBITDA* was 4.2%
of sales. Fourth quarter adjusted EBITDA* was 9.4% of sales, up 620
basis points versus prior year.
4Q'23 Segment Results
($ in M)
|
|
|
Sales
|
Segment
Profit
|
Charges1
|
Adjusted
Segment
Profit*
|
Segment
Margin
|
Adjusted
Segment
Margin*
|
Tools
&
Outdoor
|
$3,154
|
$293.5
|
$22.3
|
$315.8
|
9.3 %
|
10.0 %
|
|
|
|
|
|
|
|
Industrial
|
$582
|
$ 65.0
|
($0.6)
|
$64.4
|
11.2 %
|
11.1 %
|
|
1 See
Non-GAAP Adjustments On Page 5
|
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
- Tools & Outdoor net sales were down 7% versus fourth
quarter 2022 as volume (-8%) was moderately offset by currency
(+1%). The overall organic revenue* decline (-8%) was primarily the
result of lower consumer outdoor and DIY market demand. Regional
year-over-year organic revenue* included: North America (-10%), Europe (-1%) and Emerging markets (-1%).
Fourth quarter U.S. retail point-of-sale demand remained negative
versus the prior year, but above 2019 levels supported by price
increases and strength in professional tools. The Tools &
Outdoor segment margin was 9.3%, up 920 basis points versus prior
year. Adjusted segment margin* was 10.0%, up 900 basis points
versus fourth quarter 2022, as lower inventory destocking costs,
supply chain transformation savings and reduced shipping costs were
partially offset by lower volume.
- Industrial net sales were down 4% versus fourth quarter 2022 as
price (+1%) was more than offset by lower volume (-5%) in
Infrastructure. Engineered Fastening organic revenues* were up 7%,
with double digit growth in aerospace and automotive, which was
partially offset by softness in general industrial fastener
markets. The Industrial segment margin was 11.2%, down 10 basis
points versus prior year. The adjusted segment margin* was 11.1%,
down 40 basis points versus prior year as lower volume more than
offset price realization and cost control.
*Non-GAAP Financial
Measure As Further Defined On Page 6
|
Global Cost Reduction Program: Supply Chain Transformation
Supporting Gross Margin Accretion
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 Company was modestly ahead of its savings target for full
year 2023 and achieved $835 million
of pre-tax run-rate savings from lower headcount, indirect spend
reductions and the supply chain transformation.
Inventory was reduced by approximately $1.1 billion versus fourth quarter 2022, which
drove $1.2 billion of cash from
operating activities and $853 million
of free cash flow* generation in 2023. Since inception in mid-2022,
the Global Cost Reduction Program has generated over $1 billion in pre-tax run-rate savings and the
Company has reduced inventory by $1.9
billion.
2024 Outlook
Patrick D. Hallinan, Executive
Vice President and CFO, commented, "Focused execution of our Global
Cost Reduction Program in 2023 yielded improvements in our cost
structure that pushed fourth quarter gross margins toward 30%,
ahead of plan behind freight deflation and our teams accelerated
efforts to deliver profit and cash. This, along with over
$1 billion of inventory reductions
through the course of the year, helped us deliver strong free cash
flow*. Looking to 2024, we will continue our measured and
disciplined approach to cost management as we drive toward our
target of 35%+ adjusted gross margins* while funding additional
organic revenue growth* investments. The entire organization is
aligned around achieving margin expansion, cash generation and
balance sheet strength, and working together to position the
Company for long-term growth and value creation."
Management expects 2024 EPS to be in the range of $1.60 to $2.85 on a
GAAP basis, and between $3.50 to
$4.50 on an adjusted basis. Free cash
flow* is expected to approximate $0.6
billion to $0.8 billion,
significantly ahead of net income, as we continue to prioritize
inventory reductions. Guidance assumes the previously announced
Infrastructure divestiture closes at the end of first quarter 2024.
Other guidance assumptions will be discussed in more detail on the
upcoming earnings call.
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 fourth quarter of 2023
were $197.3 million, primarily
related to a non-cash impairment charge, footprint actions and
other costs related to the supply chain transformation. Gross
profit included $9.9 million of
charges while SG&A included $23.9
million. Other, net included a net benefit of $2.3 million and Restructuring included
$11.8 million of charges. In
addition, in the fourth quarter of 2023, the Company recognized a
$150.8 million non-cash asset
impairment charge related to the Infrastructure business and a
$3.2 million pre-tax loss related to
a previously divested business.
Earnings Webcast
Stanley Black & Decker will
host a webcast with investors today, February 1, 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 and
end-user inspired power tools, hand tools, storage, digital tool
solutions, lifestyle products, outdoor products and engineered
fasteners to support the world's makers, creators, tradespeople and
builders. The Company's world class portfolio of trusted brands
includes DEWALT®, CRAFTSMAN®, STANLEY®, BLACK+DECKER®, and CUB
CADET®. Guided by its purpose – for those who make the world –
Stanley Black & Decker strives
to be a force for good in support of its communities, employees,
customers and other stakeholders. To learn more visit:
www.stanleyblackanddecker.com.
Investor
Contacts:
|
|
|
Dennis Lange
|
Christina
Francis
|
|
Vice President,
Investor Relations
|
Director, Investor
Relations
|
|
dennis.lange@sbdinc.com
|
christina.francis@sbdinc.com
|
|
(860) 827-3833
|
(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 16 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 5. 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
YEAR-TO-DATE
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
SALES
|
|
$ 3,736.5
|
|
$
3,986.8
|
|
$
15,781.1
|
|
$
16,947.4
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
2,632.1
|
|
3,233.3
|
|
11,848.5
|
|
12,663.3
|
|
|
Gross profit
|
|
1,104.4
|
|
753.5
|
|
3,932.6
|
|
4,284.1
|
|
|
% of Net
Sales
|
|
29.6 %
|
|
18.9 %
|
|
24.9 %
|
|
25.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
834.0
|
|
757.2
|
|
3,290.7
|
|
3,370.0
|
|
|
% of Net
Sales
|
|
22.3 %
|
|
19.0 %
|
|
20.9 %
|
|
19.9 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other - net
|
|
95.8
|
|
64.6
|
|
320.1
|
|
274.8
|
|
|
Loss on sales of
businesses
|
|
3.2
|
|
-
|
|
10.8
|
|
8.4
|
|
|
Asset impairment
charges
|
|
150.8
|
|
-
|
|
274.8
|
|
168.4
|
|
|
Restructuring
charges
|
|
11.8
|
|
-
|
|
39.4
|
|
140.8
|
|
|
Income (loss) from
operations
|
|
8.8
|
|
(68.3)
|
|
(3.2)
|
|
321.7
|
|
|
Interest -
net
|
|
87.6
|
|
83.9
|
|
372.5
|
|
283.8
|
|
(LOSS) EARNINGS
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
(78.8)
|
|
(152.2)
|
|
(375.7)
|
|
37.9
|
|
|
Income taxes on
continuing operations
|
|
197.3
|
|
(51.6)
|
|
(94.0)
|
|
(132.4)
|
|
NET (LOSS)
EARNINGS FROM CONTINUING OPERATIONS
|
(276.1)
|
|
(100.6)
|
|
(281.7)
|
|
170.3
|
|
|
Less: Net earnings
attributable to non-controlling interests
|
-
|
|
-
|
|
-
|
|
0.2
|
|
NET (LOSS)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO STANLEY BLACK
& DECKER, INC.
|
$
(276.1)
|
|
$
(100.6)
|
|
$
(281.7)
|
|
$
170.1
|
|
|
Less: Preferred stock
dividends and beneficial conversion feature
|
$
-
|
|
$
5.8
|
|
$
-
|
|
$
5.8
|
|
NET (LOSS)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON
SHAREOWNERS
|
$
(276.1)
|
|
$
(106.4)
|
|
$
(281.7)
|
|
$
164.3
|
|
|
Add: Contract
adjustment payments accretion
|
|
-
|
|
0.2
|
|
-
|
|
1.2
|
|
NET (LOSS)
EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON
SHAREOWNERS - DILUTED
|
$
(276.1)
|
|
$
(106.2)
|
|
$
(281.7)
|
|
$
165.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings from
discontinued operations before income taxes (including 2023 pre-tax
loss on Security sale of $14.3 million and 2022
pre-tax gain on Security sale of $1,197.4 million)
|
(13.5)
|
|
(22.6)
|
|
(14.3)
|
|
1,210.9
|
|
|
Income taxes on
discontinued operations (including 2023 income taxes of $14.5
million for loss on Security sale and 2022 income taxes of
$312.5 million for gain on Security sale)
|
14.8
|
|
(78.2)
|
|
14.5
|
|
318.5
|
|
NET (LOSS)
EARNINGS FROM DISCONTINUED OPERATIONS
|
$
(28.3)
|
|
$
55.6
|
|
$
(28.8)
|
|
$
892.4
|
|
NET (LOSS)
EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS -
DILUTED
|
$
(304.4)
|
|
$
(50.6)
|
|
$
(310.5)
|
|
$
1,057.9
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS)
EARNINGS ATTRIBUTABLE TO STANLEY BLACK & DECKER,
INC.
|
$
(304.4)
|
|
$
(45.0)
|
|
$
(310.5)
|
|
$
1,062.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC (LOSS)
EARNINGS PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(1.84)
|
|
$
(0.72)
|
|
$
(1.88)
|
|
$
1.11
|
|
|
Discontinued
operations
|
|
$
(0.19)
|
|
$
0.38
|
|
$
(0.19)
|
|
$
6.02
|
|
|
Total basic (loss) earnings
per share of common stock
|
$
(2.03)
|
|
$
(0.35)
|
|
$
(2.07)
|
|
$
7.13
|
|
|
|
|
|
|
|
|
|
|
|
|
DILUTED (LOSS)
EARNINGS PER SHARE OF COMMON STOCK
|
|
|
|
|
|
|
|
|
|
Continuing
operations
|
|
$
(1.84)
|
|
$
(0.72)
|
|
$
(1.88)
|
|
$
1.06
|
|
|
Discontinued
operations
|
|
$
(0.19)
|
|
$
0.37
|
|
$
(0.19)
|
|
$
5.70
|
|
|
Total diluted (loss)
earnings per share of common stock
|
$
(2.03)
|
|
$
(0.34)
|
|
$
(2.07)
|
|
$
6.76
|
|
|
|
|
|
|
|
|
|
|
|
|
DIVIDENDS PER
SHARE OF COMMON STOCK
|
|
$
0.81
|
|
$
0.80
|
|
$
3.22
|
|
$
3.18
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED-AVERAGE
SHARES OUTSTANDING (in thousands)
|
|
|
|
|
|
|
|
|
|
Basic
|
|
149,933
|
|
146,967
|
|
149,751
|
|
148,170
|
|
|
Diluted
|
|
149,933
|
|
146,967
|
|
149,751
|
|
156,553
|
|
|
|
|
|
|
|
|
|
|
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
December
30,
|
|
December
31,
|
|
|
|
2023
|
|
2022
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
449.4
|
|
$
395.6
|
|
Accounts and notes
receivable, net
|
|
1,302.0
|
|
1,231.0
|
|
Inventories,
net
|
|
4,738.6
|
|
5,861.1
|
|
Current assets held for
sale
|
|
140.8
|
|
-
|
|
Other current
assets
|
|
386.5
|
|
487.0
|
|
Total current assets
|
|
7,017.3
|
|
7,974.7
|
|
Property, plant and
equipment, net
|
|
2,169.9
|
|
2,353.1
|
|
Goodwill and other
intangibles, net
|
|
11,945.5
|
|
12,977.5
|
|
Long-term assets held
for sale
|
|
716.8
|
|
-
|
|
Other assets
|
|
1,814.3
|
|
1,658.0
|
|
Total assets
|
|
$
23,663.8
|
|
$
24,963.3
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREOWNERS' EQUITY
|
|
|
|
|
Short-term
borrowings
|
|
$
1,074.8
|
|
$
2,102.9
|
|
Current maturities of
long-term debt
|
|
1.1
|
|
1.2
|
|
Accounts
payable
|
|
2,298.9
|
|
2,344.4
|
|
Accrued
expenses
|
|
2,464.3
|
|
2,120.7
|
|
Current liabilities
held for sale
|
|
44.1
|
|
-
|
|
Total current liabilities
|
|
5,883.2
|
|
6,569.2
|
|
Long-term
debt
|
|
6,101.0
|
|
5,352.9
|
|
Long-term liabilities
held for sale
|
|
84.8
|
|
-
|
|
Other long-term
liabilities
|
|
2,538.7
|
|
3,327.0
|
|
Stanley Black &
Decker, Inc. shareowners' equity
|
9,056.1
|
|
9,712.1
|
|
Non-controlling
interests' equity
|
|
-
|
|
2.1
|
|
Total liabilities and shareowners' equity
|
$
23,663.8
|
|
$
24,963.3
|
STANLEY BLACK
& DECKER, INC. AND SUBSIDIARIES
|
SUMMARY OF CASH FLOW
ACTIVITY
|
(Unaudited,
Millions of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
YEAR-TO-DATE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
OPERATING
ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)
earnings
|
|
|
$
(304.4)
|
|
$
(45.0)
|
|
$
(310.5)
|
|
$
1,062.7
|
|
|
Depreciation and
amortization
|
|
|
148.4
|
|
147.1
|
|
625.1
|
|
572.2
|
|
|
Loss on sales of
businesses
|
|
|
3.2
|
|
-
|
|
10.8
|
|
8.4
|
|
|
Loss (gain) on sale of
discontinued operations
|
|
|
13.5
|
|
22.6
|
|
14.3
|
|
(1,197.4)
|
|
|
Asset impairment
charges
|
|
|
150.8
|
|
-
|
|
274.8
|
|
168.4
|
|
|
Changes in working
capital1
|
|
|
515.7
|
|
592.7
|
|
769.0
|
|
(1,704.7)
|
|
|
Other
|
|
|
|
242.1
|
|
(66.3)
|
|
(192.2)
|
|
(369.1)
|
|
|
Net cash provided by
(used in) operating activities
|
|
|
769.3
|
|
651.1
|
|
1,191.3
|
|
(1,459.5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INVESTING AND
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
Capital and software
expenditures
|
|
|
(122.3)
|
|
(130.5)
|
|
(338.7)
|
|
(530.4)
|
|
|
Proceeds from sales of
assets
|
|
|
2.0
|
|
1.8
|
|
15.1
|
|
41.7
|
|
|
Proceeds from sales of
businesses, net of cash sold
|
|
|
-
|
|
-
|
|
(5.7)
|
|
4,147.1
|
|
|
Business acquisitions,
net of cash acquired
|
|
|
-
|
|
0.2
|
|
-
|
|
(71.9)
|
|
|
Proceeds from debt
issuances, net of fees
|
|
|
-
|
|
-
|
|
745.3
|
|
992.6
|
|
|
Stock purchase contract
fees
|
|
|
-
|
|
(9.9)
|
|
-
|
|
(39.4)
|
|
|
Credit facility
borrowings
|
|
|
-
|
|
-
|
|
-
|
|
2,500.0
|
|
|
Credit facility
repayments
|
|
|
-
|
|
-
|
|
-
|
|
(2,500.0)
|
|
|
Net short-term
commercial paper (repayments) borrowings
|
|
|
(450.4)
|
|
(466.1)
|
|
(1,044.7)
|
|
(138.1)
|
|
|
Proceeds from issuances
of common stock
|
|
|
7.5
|
|
15.7
|
|
19.0
|
|
38.7
|
|
|
Purchases of common
stock for treasury
|
|
|
(9.3)
|
|
(4.3)
|
|
(16.1)
|
|
(2,323.0)
|
|
|
Proceeds from issuances
of remarketed preferred stock
|
|
|
-
|
|
750.0
|
|
-
|
|
750.0
|
|
|
Redemption and
conversion of preferred stock
|
|
|
-
|
|
(750.0)
|
|
-
|
|
(750.0)
|
|
|
Craftsman contingent
consideration
|
|
|
-
|
|
(8.8)
|
|
(18.0)
|
|
(41.3)
|
|
|
Cash dividends on
common stock
|
|
|
(121.8)
|
|
(120.0)
|
|
(482.6)
|
|
(465.8)
|
|
|
Effect of exchange rate
changes on cash
|
|
|
30.8
|
|
63.9
|
|
2.1
|
|
(31.9)
|
|
|
Other
|
|
|
|
(3.3)
|
|
(2.8)
|
|
(17.3)
|
|
(8.7)
|
|
|
Net cash (used in)
provided by investing and financing activities
|
|
|
(666.8)
|
|
(660.8)
|
|
(1,141.6)
|
|
1,569.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase (decrease)
in cash, cash equivalents and restricted cash
|
|
|
102.5
|
|
(9.7)
|
|
49.7
|
|
110.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, beginning of period
|
|
|
352.1
|
|
414.6
|
|
404.9
|
|
294.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash, end of period
|
|
|
$
454.6
|
|
$
404.9
|
|
$
454.6
|
|
$
404.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Computation2
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
|
|
$
769.3
|
|
$
651.1
|
|
$
1,191.3
|
|
$
(1,459.5)
|
|
Less: capital and
software expenditures
|
|
|
(122.3)
|
|
(130.5)
|
|
(338.7)
|
|
(530.4)
|
|
Free cash flow (before
dividends)
|
|
|
$
647.0
|
|
$
520.6
|
|
$
852.6
|
|
$
(1,989.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Cash, Cash Equivalents and
Restricted Cash
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
449.4
|
|
$
395.6
|
|
|
|
|
|
Restricted cash
included in Other current assets
|
|
|
4.6
|
|
9.3
|
|
|
|
|
|
Cash and cash
equivalents included in Current assets held for sale
|
|
|
0.6
|
|
-
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash
|
|
|
$
454.6
|
|
$
404.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
YEAR-TO-DATE
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
NET
SALES
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
3,154.2
|
|
$
3,382.9
|
|
$
13,367.1
|
|
$
14,423.7
|
|
Industrial
|
|
582.3
|
|
603.9
|
|
2,414.0
|
|
2,523.4
|
|
Segment Net
Sales
|
|
3,736.5
|
|
3,986.8
|
|
15,781.1
|
|
16,947.1
|
|
Corporate
Overhead
|
|
-
|
|
-
|
|
-
|
|
0.3
|
|
Total
|
|
$
3,736.5
|
|
$
3,986.8
|
|
$
15,781.1
|
|
$
16,947.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
293.5
|
|
$
3.4
|
|
$
687.6
|
|
$
971.9
|
|
Industrial
|
|
65.0
|
|
68.2
|
|
266.5
|
|
236.2
|
|
Segment
Profit
|
|
358.5
|
|
71.6
|
|
954.1
|
|
1,208.1
|
|
Corporate
Overhead
|
|
(88.1)
|
|
(75.3)
|
|
(312.2)
|
|
(294.0)
|
|
Total
|
|
$
270.4
|
|
$
(3.7)
|
|
$
641.9
|
|
$
914.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
9.3 %
|
|
0.1 %
|
|
5.1 %
|
|
6.7 %
|
|
Industrial
|
|
11.2 %
|
|
11.3 %
|
|
11.0 %
|
|
9.4 %
|
|
Segment
Profit
|
|
9.6 %
|
|
1.8 %
|
|
6.0 %
|
|
7.1 %
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH QUARTER
2023
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP2
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
1,104.4
|
|
$
9.9
|
|
$
1,114.3
|
|
|
% of Net
Sales
|
|
29.6 %
|
|
|
|
29.8 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
834.0
|
|
(23.9)
|
|
810.1
|
|
|
% of Net
Sales
|
|
22.3 %
|
|
|
|
21.7 %
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings from
continuing operations before income taxes
|
(78.8)
|
|
197.3
|
|
118.5
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on
continuing operations
|
|
197.3
|
|
(216.8)
|
|
(19.5)
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
from continuing operations attributable to common shareowners -
Diluted
|
(276.1)
|
|
414.1
|
|
138.0
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings
per share of common stock - Continuing
operations1
|
$
(1.84)
|
|
$
2.76
|
|
$
0.92
|
|
|
|
|
|
|
|
|
|
|
1
|
The Non-GAAP diluted
earnings per share for the fourth quarter of 2023 is calculated
using diluted weighted-average shares outstanding of 150.671
million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH QUARTER
2022
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP2
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
753.5
|
|
$
24.5
|
|
$
778.0
|
|
|
% of Net
Sales
|
|
18.9 %
|
|
|
|
19.5 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
757.2
|
|
(27.2)
|
|
730.0
|
|
|
% of Net
Sales
|
|
19.0 %
|
|
|
|
18.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations before income taxes
|
(152.2)
|
|
54.0
|
|
(98.2)
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on
continuing operations
|
|
(51.6)
|
|
(37.7)
|
|
(89.3)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from
continuing operations attributable to common shareowners -
Diluted
|
(106.2)
|
|
91.7
|
|
(14.5)
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share
of common stock - Continuing operations
|
$
(0.72)
|
|
$
0.62
|
|
$
(0.10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
The Non-GAAP 2023 and
2022 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
16.
|
|
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
2023
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP2
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
3,932.6
|
|
$
166.9
|
|
$
4,099.5
|
|
|
% of Net
Sales
|
|
24.9 %
|
|
|
|
26.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
3,290.7
|
|
(99.4)
|
|
3,191.3
|
|
|
% of Net
Sales
|
|
20.9 %
|
|
|
|
20.2 %
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings from
continuing operations before income taxes
|
(375.7)
|
|
566.2
|
|
190.5
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on
continuing operations
|
|
(94.0)
|
|
65.8
|
|
(28.2)
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) earnings
from continuing operations attributable to common shareowners -
Diluted
|
(281.7)
|
|
500.4
|
|
218.7
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (loss) earnings
per share of common stock - Continuing
operations1
|
$
(1.88)
|
|
$
3.33
|
|
$
1.45
|
|
|
|
|
|
|
|
|
|
|
1
|
The Non-GAAP diluted
earnings per share for year-to-date 2023 is calculated using
diluted weighted-average shares outstanding of 150.371
million.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR-TO-DATE
2022
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments
|
|
Non-GAAP2
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
4,284.1
|
|
$
127.4
|
|
$
4,411.5
|
|
|
% of Net
Sales
|
|
25.3 %
|
|
|
|
26.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
3,370.0
|
|
(180.3)
|
|
3,189.7
|
|
|
% of Net
Sales
|
|
19.9 %
|
|
|
|
18.8 %
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from
continuing operations before income taxes
|
37.9
|
|
642.2
|
|
680.1
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes on
continuing operations
|
|
(132.4)
|
|
84.0
|
|
(48.4)
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings from
continuing operations attributable to common shareowners -
Diluted
|
165.5
|
|
558.2
|
|
723.7
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share of common stock - Continuing operations
|
$
1.06
|
|
$
3.56
|
|
$
4.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
The Non-GAAP 2023 and
2022 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 16.
|
|
STANLEY BLACK &
DECKER, INC. AND SUBSIDIARIES
|
RECONCILIATION OF
GAAP SEGMENT PROFIT FINANCIAL MEASURES TO
CORRESPONDING
|
NON-GAAP FINANCIAL
MEASURES
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH QUARTER
2023
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments1
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
293.5
|
|
$
22.3
|
|
$
315.8
|
|
|
|
Industrial
|
|
65.0
|
|
(0.6)
|
|
64.4
|
|
|
|
Segment
Profit
|
|
358.5
|
|
21.7
|
|
380.2
|
|
|
|
Corporate
Overhead
|
|
(88.1)
|
|
12.1
|
|
(76.0)
|
|
|
|
Total
|
|
$
270.4
|
|
$
33.8
|
|
$
304.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
9.3 %
|
|
|
|
10.0 %
|
|
|
|
Industrial
|
|
11.2 %
|
|
|
|
11.1 %
|
|
|
|
Segment
Profit
|
|
9.6 %
|
|
|
|
10.2 %
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Non-GAAP adjustments
relate primarily to footprint actions and other costs associated
with the supply chain
transformation and integration-related costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH QUARTER
2022
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments2
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
3.4
|
|
$
29.8
|
|
$
33.2
|
|
|
|
Industrial
|
|
68.2
|
|
1.4
|
|
69.6
|
|
|
|
Segment
Profit
|
|
71.6
|
|
31.2
|
|
102.8
|
|
|
|
Corporate
Overhead
|
|
(75.3)
|
|
20.5
|
|
(54.8)
|
|
|
|
Total
|
|
$
(3.7)
|
|
$
51.7
|
|
$
48.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
0.1 %
|
|
|
|
1.0 %
|
|
|
|
Industrial
|
|
11.3 %
|
|
|
|
11.5 %
|
|
|
|
Segment
Profit
|
|
1.8 %
|
|
|
|
2.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
Non-GAAP adjustments
relate primarily to supply chain transformation and
integration-related costs.
|
|
3
|
The Non-GAAP 2023 and
2022 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 SEGMENT PROFIT FINANCIAL MEASURES TO
CORRESPONDING
|
NON-GAAP FINANCIAL
MEASURES
|
(Unaudited, Millions
of Dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR-TO-DATE
2023
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments1
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
687.6
|
|
$
196.7
|
|
$
884.3
|
|
|
|
Industrial
|
|
266.5
|
|
18.7
|
|
285.2
|
|
|
|
Segment
Profit
|
|
954.1
|
|
215.4
|
|
1,169.5
|
|
|
|
Corporate
Overhead
|
|
(312.2)
|
|
50.9
|
|
(261.3)
|
|
|
|
Total
|
|
$
641.9
|
|
$
266.3
|
|
$
908.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
5.1 %
|
|
|
|
6.6 %
|
|
|
|
Industrial
|
|
11.0 %
|
|
|
|
11.8 %
|
|
|
|
Segment
Profit
|
|
6.0 %
|
|
|
|
7.4 %
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Non-GAAP adjustments
relate primarily to footprint actions and other costs associated
with the supply chain
transformation and integration-related costs.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR-TO-DATE
2022
|
|
|
|
|
|
GAAP
|
|
Non-GAAP
Adjustments2
|
|
Non-GAAP3
|
|
|
|
|
|
|
|
|
|
SEGMENT
PROFIT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
$
971.9
|
|
$
235.4
|
|
$
1,207.3
|
|
|
|
Industrial
|
|
236.2
|
|
7.8
|
|
244.0
|
|
|
|
Segment
Profit
|
|
1,208.1
|
|
243.2
|
|
1,451.3
|
|
|
|
Corporate
Overhead
|
|
(294.0)
|
|
64.5
|
|
(229.5)
|
|
|
|
Total
|
|
$
914.1
|
|
$
307.7
|
|
$
1,221.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit as
a Percentage of Net Sales
|
|
|
|
|
|
|
|
|
Tools &
Outdoor
|
|
6.7 %
|
|
|
|
8.4 %
|
|
|
|
Industrial
|
|
9.4 %
|
|
|
|
9.7 %
|
|
|
|
Segment
Profit
|
|
7.1 %
|
|
|
|
8.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
Non-GAAP adjustments
relate primarily to integration-related costs, non-cash inventory
step-up charges, and a
voluntary retirement program.
|
|
3
|
The Non-GAAP 2023 and
2022 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
YEAR-TO-DATE
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET (LOSS) EARNINGS
FROM CONTINUING OPERATIONS
|
|
$
(276.1)
|
|
$
(100.6)
|
|
$
(281.7)
|
|
$
170.3
|
|
% of Net
Sales
|
|
-7.4 %
|
|
-2.5 %
|
|
-1.8 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
Interest -
net
|
|
87.6
|
|
83.9
|
|
372.5
|
|
283.8
|
|
Income taxes on
continuing operations
|
|
197.3
|
|
(51.6)
|
|
(94.0)
|
|
(132.4)
|
|
Depreciation and
amortization
|
|
148.4
|
|
147.1
|
|
625.1
|
|
572.2
|
|
EBITDA1
|
|
$
157.2
|
|
$
78.8
|
|
$
621.9
|
|
$
893.9
|
|
% of Net
Sales
|
|
4.2 %
|
|
2.0 %
|
|
3.9 %
|
|
5.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjustments
before income taxes
|
|
197.3
|
|
54.0
|
|
566.2
|
|
642.2
|
|
|
|
|
|
|
|
|
|
|
|
Less: Accelerated
depreciation included in Non-GAAP Adjustments before income
taxes
|
|
4.2
|
|
5.5
|
|
50.0
|
|
7.5
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA1
|
|
$
350.3
|
|
$
127.3
|
|
$
1,138.1
|
|
$
1,528.6
|
|
% of Net
Sales
|
|
9.4 %
|
|
3.2 %
|
|
7.2 %
|
|
9.0 %
|
|
|
|
|
|
|
|
|
|
|
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOURTH
QUARTER
|
|
YEAR-TO-DATE
|
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
|
Supply Chain
Transformation Costs:
|
|
|
|
|
|
|
|
|
|
Footprint
Rationalization (2)
|
|
$
8.6
|
|
$
25.3
|
|
$
96.9
|
|
$
25.3
|
|
Strategic Sourcing
& Operational Excellence (3)
|
|
0.4
|
|
-
|
|
69.1
|
|
-
|
|
Inventory step-up
charges
|
|
-
|
|
-
|
|
-
|
|
80.3
|
|
Facility-related
costs
|
|
0.4
|
|
7.0
|
|
1.5
|
|
14.8
|
|
Voluntary retirement
program
|
|
-
|
|
-
|
|
(0.4)
|
|
5.7
|
|
Other charges
(gains)
|
|
0.5
|
|
(7.8)
|
|
(0.2)
|
|
1.3
|
|
Gross Profit
|
|
$
9.9
|
|
$
24.5
|
|
$
166.9
|
|
$
127.4
|
|
|
|
|
|
|
|
|
|
|
|
Supply Chain
Transformation Costs:
|
|
|
|
|
|
|
|
|
|
Footprint
Rationalization (2)
|
|
$
2.4
|
|
$
-
|
|
$
10.8
|
|
$
-
|
|
Complexity Reduction
(4)
|
|
1.0
|
|
-
|
|
9.0
|
|
7.2
|
|
Integration-related
costs
|
|
9.6
|
|
13.9
|
|
33.6
|
|
85.2
|
|
Transition services
costs related to previously divested businesses
|
|
9.6
|
|
12.2
|
|
46.6
|
|
21.1
|
|
Functional
transformation initiatives
|
|
-
|
|
4.3
|
|
-
|
|
19.2
|
|
Voluntary retirement
program
|
|
(0.3)
|
|
(0.6)
|
|
(2.7)
|
|
33.4
|
|
Other charges
(gains)
|
|
1.6
|
|
(2.6)
|
|
2.1
|
|
14.2
|
|
Selling, general and
administrative
|
|
$
23.9
|
|
$
27.2
|
|
$
99.4
|
|
$
180.3
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition &
divestiture-related costs and income (5)
|
|
$
0.9
|
|
$
2.3
|
|
$
(14.3)
|
|
$
18.2
|
|
Voluntary retirement
program
|
|
-
|
|
-
|
|
-
|
|
7.1
|
|
Asset impairment
charges (6)
|
|
150.8
|
|
-
|
|
274.8
|
|
168.4
|
|
Restructuring
charges
|
|
11.8
|
|
-
|
|
39.4
|
|
140.8
|
|
(Loss) earnings from
continuing operations before income taxes
|
|
$
197.3
|
|
$
54.0
|
|
$
566.2
|
|
$
642.2
|
|
|
|
|
|
|
|
|
|
|
2
|
Footprint
Rationalization costs in 2023 primarily relate to transfers and
closures of targeted manufacturing sites, which resulted in
accelerated depreciation
of production equipment of $49.1 million, non-cash asset
write-downs of $44.0 million (predominantly tooling, raw materials
and WIP) and other facility
exit and re-configuration costs of $14.6 million.
|
|
|
|
|
|
|
|
|
|
|
3
|
Strategic Sourcing
& Operational Excellence costs 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
|
Complexity Reduction
costs primarily relate to third-party consultant fees to assist the
Company with identifying strategies related to its SKU
reduction
and product platforming initiatives, quantifying the opportunities
and designing detailed plans to achieve the related
benefits.
|
|
|
|
|
|
|
|
|
|
|
5
|
Includes deal-related
costs and loss on sales of businesses, net of income related to
providing transition services to previously divested
businesses.
|
|
|
|
|
|
|
|
|
|
|
6
|
Asset impairment
charges in 2023 include a $124.0 million pre-tax impairment loss
related to the Irwin and Troy-Bilt trade names and a $150.8 million
pre-tax
impairment loss related to the Infrastructure business. The $168.4
million pre-tax asset impairment charge in 2022 related to the Oil
& Gas business.
|
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SOURCE Stanley Black &
Decker