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
Strong Cash Generation and Proceeds from Infrastructure Divestiture in Second Quarter Supported
- 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 )
"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.
"
*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
2
Q'24
- 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) |
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Sales |
Segment |
Charges 1 |
Adjusted |
Segment |
Adjusted |
Tools & |
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9.0 % |
10.4 % |
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Industrial |
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13.5 % |
13.5 % |
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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 quarterU.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
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
*Non-GAAP Financial Measure As Further Defined On Page 6 |
2024 Outlook
Management is updating its guidance ranges and expects 2024 GAAP EPS to be in the range of
The difference between 2024 GAAP and adjusted EPS* guidance is approximately
* 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
Earnings Webcast
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
About
Headquartered in the
Investor Contacts:
Vice President, Investor Relations
dennis.lange@sbdinc.com
(860) 827-3833
Director, Investor Relations
christina.francis@sbdinc.com
(860) 438-3470
Media Contacts:
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
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
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.
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(Unaudited, Millions of Dollars Except Per Share Amounts) |
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SECOND QUARTER |
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YEAR-TO-DATE |
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2024 |
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2023 |
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2024 |
|
2023 |
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$ 4,024.4 |
|
$ 4,158.9 |
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$ 7,893.9 |
|
$ 8,090.7 |
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COSTS AND EXPENSES |
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Cost of sales |
|
2,883.2 |
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3,226.8 |
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5,644.2 |
|
6,323.1 |
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Gross profit |
|
1,141.2 |
|
932.1 |
|
2,249.7 |
|
1,767.6 |
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% of |
|
28.4 % |
|
22.4 % |
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28.5 % |
|
21.8 % |
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Selling, general and administrative |
|
828.6 |
|
837.3 |
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1,680.4 |
|
1,662.4 |
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% of |
|
20.6 % |
|
20.1 % |
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21.3 % |
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20.5 % |
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Other - net |
|
226.5 |
|
66.6 |
|
306.5 |
|
130.3 |
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Loss on sales of businesses |
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- |
|
- |
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- |
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7.6 |
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Asset impairment charge |
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- |
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- |
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25.5 |
|
- |
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Restructuring charges |
|
29.8 |
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4.6 |
|
44.8 |
|
16.7 |
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Income (loss) from operations |
|
56.3 |
|
23.6 |
|
192.5 |
|
(49.4) |
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Interest - net |
|
78.4 |
|
99.4 |
|
166.3 |
|
190.5 |
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|
(LOSS) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
(22.1) |
|
(75.8) |
|
26.2 |
|
(239.9) |
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||
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Income taxes on continuing operations |
|
(2.9) |
|
(253.3) |
|
25.9 |
|
(229.6) |
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NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS |
$ (19.2) |
|
$ 177.5 |
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$ 0.3 |
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$ (10.3) |
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Gain (loss) on Security sale before income taxes |
10.4 |
|
(0.8) |
|
10.4 |
|
(0.8) |
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Income taxes on discontinued operations |
2.4 |
|
(0.3) |
|
2.4 |
|
(0.3) |
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NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS |
$ 8.0 |
|
$ (0.5) |
|
$ 8.0 |
|
$ (0.5) |
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||
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NET (LOSS) EARNINGS |
|
$ (11.2) |
|
$ 177.0 |
|
$ 8.3 |
|
$ (10.8) |
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BASIC (LOSS) EARNINGS PER SHARE OF COMMON STOCK |
|
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||
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Continuing operations |
|
$ (0.13) |
|
$ 1.19 |
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$ - |
|
$ (0.07) |
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Discontinued operations |
|
$ 0.05 |
|
$ - |
|
$ 0.05 |
|
$ - |
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Total basic (loss) earnings per share of common stock |
$ (0.07) |
|
$ 1.18 |
|
$ 0.06 |
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$ (0.07) |
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DILUTED (LOSS) EARNINGS PER SHARE OF COMMON STOCK |
|
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Continuing operations |
|
$ (0.13) |
|
$ 1.18 |
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$ - |
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$ (0.07) |
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Discontinued operations |
|
$ 0.05 |
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$ - |
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$ 0.05 |
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$ - |
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Total diluted (loss) earnings per share of common stock |
$ (0.07) |
|
$ 1.18 |
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$ 0.05 |
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$ (0.07) |
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DIVIDENDS PER SHARE OF COMMON STOCK |
|
$ 0.81 |
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$ 0.80 |
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$ 1.62 |
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$ 1.60 |
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WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands) |
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Basic |
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150,394 |
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149,687 |
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150,311 |
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149,631 |
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Diluted |
|
150,394 |
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150,227 |
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151,012 |
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149,631 |
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CONDENSED CONSOLIDATED BALANCE SHEETS |
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(Unaudited, Millions of Dollars) |
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2024 |
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2023 |
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ASSETS |
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Cash and cash equivalents |
|
$ 318.5 |
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$ 449.4 |
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Accounts and notes receivable, net |
|
1,512.1 |
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1,302.0 |
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Inventories, net |
|
4,562.4 |
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4,738.6 |
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Current assets held for sale |
|
- |
|
140.8 |
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Other current assets |
|
392.0 |
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386.5 |
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Total current assets |
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6,785.0 |
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7,017.3 |
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Property, plant and equipment, net |
|
2,078.7 |
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2,169.9 |
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11,801.7 |
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11,945.5 |
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Long-term assets held for sale |
|
- |
|
716.8 |
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Other assets |
|
1,788.8 |
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1,814.3 |
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Total assets |
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$ 22,454.2 |
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$ 23,663.8 |
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LIABILITIES AND SHAREOWNERS' EQUITY |
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Short-term borrowings |
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$ 492.4 |
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$ 1,074.8 |
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Current maturities of long-term debt |
|
500.1 |
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1.1 |
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Accounts payable |
|
2,450.4 |
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2,298.9 |
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Accrued expenses |
|
1,899.9 |
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2,464.3 |
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Current liabilities held for sale |
|
- |
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44.1 |
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Total current liabilities |
|
5,342.8 |
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5,883.2 |
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Long-term debt |
|
5,602.4 |
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6,101.0 |
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Long-term liabilities held for sale |
|
- |
|
84.8 |
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Other long-term liabilities |
|
2,787.1 |
|
2,538.7 |
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Shareowners' equity |
|
8,721.9 |
|
9,056.1 |
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Total liabilities and shareowners' equity |
$ 22,454.2 |
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$ 23,663.8 |
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SUMMARY OF CASH FLOW ACTIVITY |
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(Unaudited, Millions of Dollars) |
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SECOND QUARTER |
|
YEAR-TO-DATE |
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2024 |
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2023 |
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2024 |
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2023 |
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OPERATING ACTIVITIES |
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Net (loss) earnings |
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|
$ (11.2) |
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$ 177.0 |
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$ 8.3 |
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$ (10.8) |
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Depreciation and amortization |
|
|
155.0 |
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164.4 |
|
295.2 |
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325.6 |
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Loss on sales of businesses |
|
|
- |
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- |
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- |
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7.6 |
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(Gain) loss on sale of discontinued operations |
|
|
(10.4) |
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0.8 |
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(10.4) |
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0.8 |
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Asset impairment charge |
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|
- |
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- |
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25.5 |
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- |
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Changes in working capital1 |
|
|
397.8 |
|
278.9 |
|
38.0 |
|
97.7 |
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Other |
|
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|
41.8 |
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(356.7) |
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(214.6) |
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(442.8) |
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Net cash provided by (used in) operating activities |
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573.0 |
|
264.4 |
|
142.0 |
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(21.9) |
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INVESTING AND FINANCING ACTIVITIES |
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Capital and software expenditures |
|
|
(87.2) |
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(68.3) |
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(152.9) |
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(136.5) |
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Proceeds from sales of businesses, net of cash sold |
|
|
735.6 |
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(6.3) |
|
735.6 |
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(5.7) |
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Proceeds from debt issuances, net of fees |
|
|
- |
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(1.3) |
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- |
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745.9 |
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Net short-term commercial paper repayments |
|
|
(1,245.7) |
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(42.0) |
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(570.8) |
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(327.9) |
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Cash dividends on common stock |
|
|
(121.8) |
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(119.7) |
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(243.6) |
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(239.5) |
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Effect of exchange rate changes on cash |
|
|
(15.0) |
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(14.2) |
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(42.6) |
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(5.1) |
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Other |
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0.4 |
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(7.4) |
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(1.6) |
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(18.3) |
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Net cash (used in) provided by investing and financing activities |
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|
(733.7) |
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(259.2) |
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(275.9) |
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12.9 |
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(Decrease) increase in cash, cash equivalents and restricted cash |
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|
(160.7) |
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5.2 |
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(133.9) |
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(9.0) |
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Cash, cash equivalents and restricted cash, beginning of period |
|
|
481.4 |
|
390.7 |
|
454.6 |
|
404.9 |
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Cash, cash equivalents and restricted cash, end of period |
|
|
$ 320.7 |
|
$ 395.9 |
|
$ 320.7 |
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$ 395.9 |
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|
|
Free Cash Flow Computation2 |
|
|
|
|
|
|
|
|
|
||
|
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 |
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|||||||||
BUSINESS SEGMENT INFORMATION |
|||||||||
(Unaudited, Millions of Dollars) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER |
|
YEAR-TO-DATE |
||||
|
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
|
|
|
|
|
||
|
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 % |
|
||||||||
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 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 1,141.2 |
|
$ 33.5 |
|
$ 1,174.7 |
|
|
% of |
|
28.4 % |
|
|
|
29.2 % |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
828.6 |
|
(27.6) |
|
801.0 |
|
|
% of |
|
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 operations1 |
$ (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 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 932.1 |
|
$ 51.4 |
|
$ 983.5 |
|
|
% of |
|
22.4 % |
|
|
|
23.6 % |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
837.3 |
|
(25.4) |
|
811.9 |
|
|
% of |
|
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 |
|
|
||||||||
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 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 2,249.7 |
|
$ 47.9 |
|
$ 2,297.6 |
|
|
% of |
|
28.5 % |
|
|
|
29.1 % |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
1,680.4 |
|
(47.7) |
|
1,632.7 |
|
|
% of |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 1,767.6 |
|
$ 124.8 |
|
$ 1,892.4 |
|
|
% of |
|
21.8 % |
|
|
|
23.4 % |
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
1,662.4 |
|
(46.1) |
|
1,616.3 |
|
|
% of |
|
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 |
|
|
|||||||||
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 |
|
|
|
|
|
|
|
|
|||
|
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 |
|
|
|
|
|
|
||
|
|
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 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECOND QUARTER 2023 |
|
||||
|
|
|
|
GAAP |
|
Non-GAAP |
|
Non-GAAP 3 |
|
|
|
|
|
|
|
|
|||
|
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 |
|
|
|
|
|
|
||
|
|
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 |
|
|||||||
3 |
The Non-GAAP 2024 and 2023 business segment information, as reconciled to GAAP above, is considered relevant to |
|
|
|||||||||
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 |
|
|
|
|
|
|
|
|
|||
|
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 |
|
|
|
|
|
|
||
|
|
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 |
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YEAR-TO-DATE 2023 |
|
||||
|
|
|
|
GAAP |
|
Non-GAAP |
|
Non-GAAP 3 |
|
|
|
|
|
|
|
|
|||
|
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 |
|
|
|
|
|
|
||
|
|
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 |
|
|||||||
3 |
The Non-GAAP 2024 and 2023 business segment information, as reconciled to GAAP above, is considered relevant to |
|
|
|||||||||
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 |
|
-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 |
|
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 |
|
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. |
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SUMMARY OF NON-GAAP ADJUSTMENTS BEFORE INCOME TAXES |
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(Unaudited, Millions of Dollars) |
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SECOND QUARTER |
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YEAR-TO-DATE |
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2024 |
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2023 |
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2024 |
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2023 |
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Supply Chain Transformation Costs: |
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|
|
|
|
|
|
|
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Footprint Rationalization2 |
|
$ 24.0 |
|
$ 21.3 |
|
$ 32.4 |
|
$ 80.6 |
|
Strategic Sourcing & Operational Excellence3 |
|
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: |
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|
|
|
|
|
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Footprint Rationalization2 |
|
$ 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 |
|
|
|
|
|
|
|
|
|
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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 |
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|
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2 |
Footprint Rationalization costs in 2024 primarily relate to accelerated depreciation of manufacturing and distribution center equipment of |
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3 |
Strategic Sourcing & Operational Excellence costs in 2023 primarily relate to third-party consultant fees to provide expertise in identifying and quantifying opportunities to |
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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 |
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5 |
Includes deal-related costs, net of income related to providing transition services to previously divested businesses. |
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6 |
The |
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7 |
The |
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SOURCE