Stanley Black & Decker Reports 2Q 2024 Results
Second 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 Remains On-Track for Expected Pre-Tax Run-Rate Savings of $1.5 Billion by End of 2024 and $2 Billion by End of 2025
Strong Cash Generation and Proceeds from Infrastructure Divestiture in Second Quarter Supported $1.2 Billion Debt Reduction
NEW BRITAIN, Conn., July 30, 2024 /PRNewswire/ -- Stanley Black & Decker (NYSE: SWK), a worldwide leader in tools and outdoor, today announced second quarter 2024 financial results.
-- Second Quarter Revenues of $4.0 Billion, Down 3% Versus Prior Year as 1%
Organic Revenue Growth* Led by DEWALT, Outdoor Products and Engineered
Fastening Was More Than Offset by the Previously Announced
Infrastructure Divestiture and Currency
-- Second Quarter Gross Margin Was 28.4%, Up 600 Basis Points Versus Prior
Year; Second Quarter Adjusted Gross Margin* Was 29.2%, Up 560 Basis
Points Versus Prior Year
-- Second Quarter GAAP EPS Was ($0.13); Second Quarter Adjusted EPS* Was
$1.09
-- Second Quarter Cash From Operating Activities Was $573 Million and Free
Cash Flow* Was $486 Million
-- Revising GAAP EPS Range to $0.90 to $2.00 (From $1.60 to $2.85), Raising
Adjusted EPS* to $3.70 to $4.50 (From $3.50 to $4.50) and Raising Free
Cash Flow* to $650 Million to $850 Million (From $600 Million to $800
Million)
Donald Allan, Jr., Stanley Black & Decker's President & CEO, commented, "We extended our trajectory of solid execution on our operational priorities, which drove gross margin improvement versus the prior year and strong cash generation in the second quarter. Strength in DEWALT, outdoor and aerospace fasteners combined to yield organic growth* amidst a weak consumer backdrop.
"As we look to the back half of 2024, we expect mixed demand trends across our markets. With that in mind, we remain focused on implementing supply chain improvements designed to reshape our cost structure and expand margins, delivering earnings growth and generating strong cash flow. We are continuing to reinvest a portion of the savings to fund new growth investments intended to further strengthen our powerful brands, accelerate innovation and deploy differentiated market activation to capture compelling long-term opportunities in our industry.
"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. 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
2Q'24 Key Points:
-- Net sales for the quarter were $4.0 billion, down 3% versus prior year
as volume growth (+2%) was offset by the previously announced
Infrastructure business divestiture (-3%), currency (-1%) and price
(-1%).
-- Gross margin for the quarter was 28.4%, up versus the prior year rate of
22.4%. Adjusted gross margin* was 29.2%, up versus the prior year rate
of 23.6%, primarily due to lower inventory destocking costs, supply
chain transformation benefits and lower shipping costs.
-- SG&A expenses were 20.6% of sales for the quarter versus 20.1% in the
prior year. Excluding charges, adjusted SG&A expenses* were 19.9% of
sales, up versus 19.5% in the prior year, as the Company increased
investments to position the business to gain additional market share.
-- Other, net totaled $227 million for the quarter, up versus the prior
year, due to $154 million in environmental charges, primarily related to
the non-active Centredale Superfund site. On an adjusted basis, other,
net was $78 million, relatively in-line versus prior year.
-- Net loss from continuing operations was (0.5%) of sales versus net
earnings from continuing operations of 4.3% of sales in the prior year.
Second quarter EBITDA* was 5.3% of sales. Second quarter adjusted
EBITDA* was 10.7% of sales, up 500 basis points versus prior year.
-- Second quarter cash from operating activities was $573 million. Free
cash flow* in the second quarter was $486 million, primarily aided by
accelerated working capital improvements and timing within the year.
Strong cash generation along with proceeds from the Infrastructure
divestiture contributed to $1.2 billion of second quarter debt
reduction.
*Non-GAAP Financial Measure As Further Defined On Page 6
2Q'24 Segment Results
($ in M)
Sales Segment Charges
1 Adjusted Segment Adjusted
Profit Segment Margin Segment
Profit Margin
* *
Tools & $3,529 $316.1 $52.6 $368.7 9.0 % 10.4 %
Outdoor
Industrial $496 $66.8 $0.3 $67.1 13.5 % 13.5 %
(1) See Non-GAAP Adjustments On Page 5
*Non-GAAP Financial Measure As Further Defined On Page 6
-- Tools & Outdoor net sales were flat versus second quarter 2023 with
DEWALT and outdoor leading volume gains (+2%) that were partially offset
by price (-1%) and currency (-1%). Regional organic revenues* were:
North America (+1%), Europe (-3%) and rest of world (+5%). Second
quarter U.S. retail point-of-sale demand was up modestly versus the
prior year led by outdoor growth and recaptured DEWALT cordless
promotions. The Tools & Outdoor segment margin was 9.0%, up 610 basis
points versus prior year. Adjusted segment margin* was 10.4%, up 590
basis points versus second quarter 2023, primarily due to lower
inventory destocking costs, supply chain transformation benefits and
lower shipping costs, which were partially offset by growth investments.
-- Industrial net sales were down 20% versus second quarter 2023 as the
Infrastructure divestiture (-20%) and currency (-2%) was partially
offset by price (+2%). Engineered Fastening organic revenues* were up
2%, driven by aerospace growth which offset market softness in
automotive and general industrial. The Industrial segment margin was
13.5%, up 190 basis points versus prior year. The adjusted segment
margin* was 13.5%, up 50 basis points versus second 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 second quarter 2024 of $150 million. Since inception of the program in mid-2022, the Company has generated approximately $1.3 billion in pre-tax run-rate savings and reduced inventory by over $2 billion.
*Non-GAAP Financial Measure As Further Defined On Page 6
2024 Outlook
Patrick D. Hallinan, Executive Vice President and CFO, commented, "In the first half of 2024 we enhanced gross margins versus the prior year and accelerated working capital improvements, which together with proceeds from the Infrastructure divestiture, reduced $1.2 billion debt and further strengthened our balance sheet. Looking forward, we remain focused on executing our supply chain improvements to further improve gross margin and earnings in the second half of 2024 and our progress to date supports our improved full year adjusted earnings* and free cash flow* outlook. We remain confident that our actions to drive toward our target of 35%+ adjusted gross margins* while funding additional organic revenue growth* investments will continue generating positive results. Our top priorities remain delivering margin expansion, cash generation and balance sheet strength to position the Company for long-term growth and value creation."
Management is updating its guidance ranges and expects 2024 GAAP EPS to be in the range of $0.90 to $2.00 (From $1.60 to $2.85) primarily due to the second quarter environmental reserve adjustments. Adjusted EPS* is expected to be between $3.70 to $4.50, (From $3.50 to $4.50). Free cash flow* is increased to be approximately $650 million to $850 million (From $600 million to $800 million). The Company expects second half free cash flow to fund the cash dividend and support an additional $400 - $500 million short term debt reduction by year end.
The difference between 2024 GAAP and adjusted EPS* guidance is approximately $2.50 to $2.80, consisting primarily of charges related to the supply chain transformation under the Global Cost Reduction Program and environmental reserve adjustments.
* Non-GAAP Financial Measure As Further Defined On Page 6
Non-GAAP Adjustments
Total pre-tax non-GAAP adjustments in the second quarter of 2024 were $239.3 million, primarily related to an environmental charge, footprint actions and other costs related to the supply chain transformation, and restructuring costs. Gross profit included $33.5 million of charges, while SG&A included $27.6 million. Other, net included $148.4 million of charges, primarily related to environmental remediation reserve adjustments, and Restructuring included $29.8 million of charges.
Earnings Webcast
Stanley Black & Decker will host a webcast with investors today, July 30, 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 approximately 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, earnings, EBITDA and EBITDA margin are adjusted for certain gains and charges, such as environmental charges, 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 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" "looking forward" 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 changes in environmental regulations or requirements, which may be more stringent and complex, impacting its manufacturing facilities and business operations as well as remediation plans and costs relating to any of its current or former locations or other sites;; (xv) maintaining or improving production rates in the Company's manufacturing facilities, responding to significant changes in customer preferences or expectations, product demand and fulfilling demand for new and existing products, and learning, adapting and integrating new technologies into products, services and processes; (xvi) changes in the competitive landscape in the Company's markets; (xvii) the Company's non-U.S. operations, including sales to non-U.S. customers; (xviii) the impact from demand changes within world-wide markets associated with homebuilding and remodeling; (xix) potential adverse developments in new or pending litigation and/or government investigations; (xx) the incurrence of debt and changes in the Company's ability to obtain debt on commercially reasonable terms and at competitive rates; (xxi) substantial pension and other postretirement benefit obligations; (xxii) potential regulatory liabilities, including environmental, privacy, data breach, workers compensation and product liabilities; (xxiii) attracting, developing and retaining senior management and other key employees, managing a workforce in many jurisdictions, labor shortages, work stoppages or other labor disruptions; (xxiv) the Company's ability to keep abreast with the pace of technological change; (xxv) changes in accounting estimates; (xxvi) the Company's ability to protect its intellectual property rights and to maintain its public reputation and the strength of its brands; and (xxvii) 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, rationalize manufacturing and distribution networks, including consolidating facilities and optimizing 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)
SECOND QUARTER YEAR-TO-DATE
2024 2023 2024 2023
NET SALES $4,024.4 $4,158.9 $7,893.9 $8,090.7
COSTS AND EXPENSES
Cost of sales 2,883.2 3,226.8 5,644.2 6,323.1
Gross profit 1,141.2 932.1 2,249.7 1,767.6
% of Net Sales 28.4 % 22.4 % 28.5 % 21.8 %
Selling, general and administrative 828.6 837.3 1,680.4 1,662.4
% of Net Sales 20.6 % 20.1 % 21.3 % 20.5 %
Other - net 226.5 66.6 306.5 130.3
Loss on sales of businesses 7.6
Asset impairment charge 25.5
Restructuring charges 29.8 4.6 44.8 16.7
Income (loss) from operations 56.3 23.6 192.5 (49.4)
Interest - net 78.4 99.4 166.3 190.5
(LOSS) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (22.1) (75.8) 26.2 (239.9)
Income taxes on continuing operations (2.9) (253.3) 25.9 (229.6)
NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS $(19.2) $177.5 $0.3 $(10.3)
Gain (loss) on Security sale before income taxes 10.4 (0.8) 10.4 (0.8)
Income taxes on discontinued operations 2.4 (0.3) 2.4 (0.3)
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS $8.0 $(0.5) $8.0 $(0.5)
NET (LOSS) EARNINGS $(11.2) $177.0 $8.3 $(10.8)
BASIC (LOSS) EARNINGS PER SHARE OF COMMON STOCK
Continuing operations $(0.13) $1.19
$ - $(0.07)
Discontinued operations $0.05
$ - $0.05
$ -
Total basic (loss) earnings per share of common stock $(0.07) $1.18 $0.06 $(0.07)
DILUTED (LOSS) EARNINGS PER SHARE OF COMMON STOCK
Continuing operations $(0.13) $1.18
$ - $(0.07)
Discontinued operations $0.05
$ - $0.05
$ -
Total diluted (loss) earnings per share of common stock $(0.07) $1.18 $0.05 $(0.07)
DIVIDENDS PER SHARE OF COMMON STOCK $0.81 $0.80 $1.62 $1.60
WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands)
Basic 150,394 149,687 150,311 149,631
Diluted 150,394 150,227 151,012 149,631
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
June 29, December 30,
2024 2023
ASSETS
Cash and cash equivalents $318.5 $449.4
Accounts and notes
receivable, net 1,512.1 1,302.0
Inventories, net 4,562.4 4,738.6
Current assets held for
sale 140.8
Other current assets 392.0 386.5
Total current assets 6,785.0 7,017.3
Property, plant and
equipment, net 2,078.7 2,169.9
Goodwill and other
intangibles, net 11,801.7 11,945.5
Long-term assets held
for sale 716.8
Other assets 1,788.8 1,814.3
Total assets $22,454.2 $23,663.8
LIABILITIES AND SHAREOWNERS' EQUITY
Short-term borrowings $492.4 $1,074.8
Current maturities of
long-term debt 500.1 1.1
Accounts payable 2,450.4 2,298.9
Accrued expenses 1,899.9 2,464.3
Current liabilities held
for sale 44.1
Total current liabilities 5,342.8 5,883.2
Long-term debt 5,602.4 6,101.0
Long-term liabilities
held for sale 84.8
Other long-term
liabilities 2,787.1 2,538.7
Shareowners' equity 8,721.9 9,056.1
Total liabilities and
shareowners' equity $22,454.2 $23,663.8
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
SECOND QUARTER
YEAR-TO-DATE
2024 2023 2024 2023
OPERATING ACTIVITIES
Net (loss) earnings $(11.2) $177.0 $8.3 $(10.8)
Depreciation and amortization 155.0 164.4 295.2 325.6
Loss on sales of businesses 7.6
(Gain) loss on sale of discontinued operations (10.4) 0.8 (10.4) 0.8
Asset impairment charge 25.5
Changes in working capital(1) 397.8 278.9 38.0 97.7
Other 41.8 (356.7) (214.6) (442.8)
Net cash provided by (used in) operating activities 573.0 264.4 142.0 (21.9)
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures (87.2) (68.3) (152.9) (136.5)
Proceeds from sales of businesses, net of cash sold 735.6 (6.3) 735.6 (5.7)
Proceeds from debt issuances, net of fees (1.3) 745.9
Net short-term commercial paper repayments (1,245.7) (42.0) (570.8) (327.9)
Cash dividends on common stock (121.8) (119.7) (243.6) (239.5)
Effect of exchange rate changes on cash (15.0) (14.2) (42.6) (5.1)
Other 0.4 (7.4) (1.6) (18.3)
Net cash (used in) provided by investing and
financing activities (733.7) (259.2) (275.9) 12.9
(Decrease) increase in cash, cash equivalents and
restricted cash (160.7) 5.2 (133.9) (9.0)
Cash, cash equivalents and restricted cash, beginning
of period 481.4 390.7 454.6 404.9
Cash, cash equivalents and restricted cash, end of
period $320.7 $395.9 $320.7 $395.9
Free Cash Flow Computation(2)
Net cash provided by (used in) operating activities $573.0 $264.4 $142.0 $(21.9)
Less: capital and software expenditures (87.2) (68.3) (152.9) (136.5)
Free cash flow (before dividends) $485.8 $196.1 $(10.9) $(158.4)
Reconciliation of Cash, Cash Equivalents and
Restricted Cash
June 29, 2024 December 30, 2023
Cash and cash equivalents $318.5 $449.4
Restricted cash included in Other current assets 2.2 4.6
Cash and cash equivalents included in Current assets
held for sale 0.6
Cash, cash equivalents and restricted cash $320.7 $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)
SECOND QUARTER YEAR-TO-DATE
2024 2023 2024 2023
NET SALES
Tools & Outdoor $3,528.7 $3,542.2 $6,813.3 $6,857.6
Industrial 495.7 616.7 1,080.6 1,233.1
Total $4,024.4 $4,158.9 $7,893.9 $8,090.7
SEGMENT PROFIT
Tools & Outdoor $316.1 $102.0 $571.8 $120.7
Industrial 66.8 71.6 132.0 139.0
Segment Profit 382.9 173.6 703.8 259.7
Corporate Overhead (70.3) (78.8) (134.5) (154.5)
Total $312.6 $94.8 $569.3 $105.2
Segment Profit as a Percentage of Net Sales
Tools & Outdoor 9.0 % 2.9 % 8.4 % 1.8 %
Industrial 13.5 % 11.6 % 12.2 % 11.3 %
Segment Profit 9.5 % 4.2 % 8.9 % 3.2 %
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)
SECOND QUARTER 2024
GAAP Non-GAAP Non-GAAP
(2)
Adjustments
Gross profit $1,141.2 $33.5 $1,174.7
% of Net Sales 28.4 % 29.2 %
Selling, general and administrative 828.6 (27.6) 801.0
% of Net Sales 20.6 % 19.9 %
(Loss) earnings from continuing operations before income taxes (22.1) 239.3 217.2
Income taxes on continuing operations (2.9) 55.6 52.7
Net (loss) earnings from continuing operations (19.2) 183.7 164.5
Diluted (loss) earnings per share of common stock -Continuing
operations(1) $(0.13) $1.22 $1.09
(1) The Non-GAAP diluted earnings per share for the second quarter of 2024 is calculated using diluted weighted-average shares
outstanding of 151.103 million.
SECOND QUARTER 2023
GAAP Non-GAAP Non-GAAP
(2)
Adjustments
Gross profit $932.1 $51.4 $983.5
% of Net Sales 22.4 % 23.6 %
Selling, general and administrative 837.3 (25.4) 811.9
% of Net Sales 20.1 % 19.5 %
Loss from continuing operations before income taxes (75.8) 71.1 (4.7)
Income taxes on continuing operations (253.3) 265.5 12.2
Net earnings (loss) from continuing operations 177.5 (194.4) (16.9)
Diluted earnings (loss) per share of common stock -Continuing
operations $1.18 $(1.29) $(0.11)
(2) 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 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 2024
GAAP Non-GAAP Non-GAAP
(1)
Adjustments
Gross profit $2,249.7 $47.9 $2,297.6
% of Net Sales 28.5 % 29.1 %
Selling, general and administrative 1,680.4 (47.7) 1,632.7
% of Net Sales 21.3 % 20.7 %
Earnings from continuing operations before income
taxes 26.2 310.8 337.0
Income taxes on continuing operations 25.9 62.4 88.3
Net earnings from continuing operations 0.3 248.4 248.7
Diluted earnings per share of common stock -
Continuing operations
$ - $1.65 $1.65
YEAR-TO-DATE 2023
GAAP Non-GAAP Non-GAAP
(1)
Adjustments
Gross profit $1,767.6 $124.8 $1,892.4
% of Net Sales 21.8 % 23.4 %
Selling, general and administrative 1,662.4 (46.1) 1,616.3
% of Net Sales 20.5 % 20.0 %
Loss from continuing operations before income taxes (239.9) 177.9 (62.0)
Income taxes on continuing operations (229.6) 245.1 15.5
Net loss from continuing operations (10.3) (67.2) (77.5)
Diluted loss per share of common stock -Continuing
operations $(0.07) $(0.45) $(0.52)
(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 16.
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 2024
GAAP Non-GAAP Non-GAAP
(3)
Adjustments
(1)
SEGMENT PROFIT
Tools & Outdoor $316.1 $52.6 $368.7
Industrial 66.8 0.3 67.1
Segment Profit 382.9 52.9 435.8
Corporate Overhead (70.3) 8.2 (62.1)
Total $312.6 $61.1 $373.7
Segment Profit as a Percentage of Net
Sales
Tools & Outdoor 9.0 % 10.4 %
Industrial 13.5 % 13.5 %
Segment Profit 9.5 % 10.8 %
(1) Non-GAAP adjustments relate primarily to footprint actions associated with the supply chain
transformation and
transition services costs related to previously divested businesses.
SECOND QUARTER 2023
GAAP Non-GAAP Non-GAAP
(3)
Adjustments
(2)
SEGMENT PROFIT
Tools & Outdoor $102.0 $55.8 $157.8
Industrial 71.6 8.5 80.1
Segment Profit 173.6 64.3 237.9
Corporate Overhead (78.8) 12.5 (66.3)
Total $94.8 $76.8 $171.6
Segment Profit as a Percentage of Net
Sales
Tools & Outdoor 2.9 % 4.5 %
Industrial 11.6 % 13.0 %
Segment Profit 4.2 % 5.7 %
(2) Non-GAAP adjustments relate primarily to footprint actions and other costs associated with the
supply chain
transformation.
(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 SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
YEAR-TO-DATE 2024
GAAP Non-GAAP Non-GAAP
(3)
Adjustments
(1)
SEGMENT PROFIT
Tools & Outdoor $571.8 $75.5 $647.3
Industrial 132.0 6.0 138.0
Segment Profit 703.8 81.5 785.3
Corporate Overhead (134.5) 14.1 (120.4)
Total $569.3 $95.6 $664.9
Segment Profit as a Percentage of Net
Sales
Tools & Outdoor 8.4 % 9.5 %
Industrial 12.2 % 12.8 %
Segment Profit 8.9 % 9.9 %
(1) Non-GAAP adjustments relate primarily to footprint actions associated with the supply chain
transformation and
transition services costs related to previously divested businesses.
YEAR-TO-DATE 2023
GAAP Non-GAAP Non-GAAP
(3)
Adjustments
(2)
SEGMENT PROFIT
Tools & Outdoor $120.7 $135.0 $255.7
Industrial 139.0 8.8 147.8
Segment Profit 259.7 143.8 403.5
Corporate Overhead (154.5) 27.1 (127.4)
Total $105.2 $170.9 $276.1
Segment Profit as a Percentage of Net
Sales
Tools & Outdoor 1.8 % 3.7 %
Industrial 11.3 % 12.0 %
Segment Profit 3.2 % 5.0 %
(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 (LOSS) EARNINGS TO EBITDA
(Unaudited, Millions of Dollars)
SECOND QUARTER YEAR-TO-DATE
2024 2023 2024 2023
Net (loss) earnings from continuing operations $(19.2) $177.5 $0.3 $(10.3)
% of Net Sales -0.5 % 4.3 % 0.0 % -0.1 %
Interest - net 78.4 99.4 166.3 190.5
Income taxes on continuing operations (2.9) (253.3) 25.9 (229.6)
Depreciation and amortization 155.0 164.4 295.2 325.6
EBITDA
(1) $211.3 $188.0 $487.7 $276.2
% of Net Sales 5.3 % 4.5 % 6.2 % 3.4 %
Non-GAAP Adjustments before income taxes 239.3 71.1 310.8 177.9
Less: Accelerated depreciation included in Non-GAAP Adjustments
before income taxes 21.3 20.6 26.6 38.1
Adjusted EBITDA
(1) $429.3 $238.5 $771.9 $416.0
% of Net Sales 10.7 % 5.7 % 9.8 % 5.1 %
(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)
SECOND QUARTER YEAR-TO-DATE
2024 2023 2024 2023
Supply Chain Transformation Costs:
Footprint Rationalization(2) $24.0 $21.3 $32.4 $80.6
Strategic Sourcing & Operational Excellence(3) 7.6 30.7 13.4 44.8
Facility-related costs 1.6 0.2 2.3 0.9
Other charges (gains) 0.3 (0.8) (0.2) (1.5)
Gross Profit $33.5 $51.4 $47.9 $124.8
Supply Chain Transformation Costs:
Footprint Rationalization(2) $15.5 $3.7 $21.6 $3.8
Complexity Reduction & Operational Excellence 1.5 6.7 3.2 6.8
Acquisition & integration-related costs4 3.9 2.4 6.7 12.5
Transition services costs related to previously divested businesses 4.7 12.9 10.2 25.7
Other charges (gains) 2.0 (0.3) 6.0 (2.7)
Selling, general and administrative $27.6 $25.4 $47.7 $46.1
Other, net5 $(5.4) $(10.3) $(8.9) $(17.3)
Loss on sales of businesses 7.6
Asset impairment charge6 25.5
Environmental charges7 153.8 153.8
Restructuring charges 29.8 4.6 44.8 16.7
(Loss) earnings from continuing operations before income taxes $239.3 $71.1 $310.8 $177.9
(2) Footprint Rationalization costs in 2024 primarily relate to accelerated depreciation of manufacturing and distribution center equipment of
$24.7 million and other facility exit
and re-configuration costs of $18.2 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 $37.7 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.
7 The $153.8 million pre-tax environmental charges in 2024 related primarily to a reserve adjustment for the non-active Centredale Superfund
site as a result of regulatory
changes and revisions to remediation alternatives.
View original content to download multimedia:https://www.prnewswire.com/news-releases/stanley-black--decker-reports-2q-2024-results-302209098.html
SOURCE Stanley Black & Decker, Inc.
