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|Stanley Black & Decker Reports 3Q 2012 Results|
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NEW BRITAIN, Conn.--(BUSINESS WIRE)--Oct. 17, 2012--
3Q'12 Key Points:
Stanley Black & Decker's President and CEO,
Separately, we announced last week that we had reached agreement to divest our Hardware & Home Improvement (HHI) business, an important step in our ongoing transformation to a diversified industrial company. The company maintains the significant upside potential of a housing market recovery through our
3Q'12 Segment Results
1 charges primarily pertaining to synergy attainment & facility closures
For the entire CDIY segment, including Pfister, net sales increased 3% versus 3Q'11 due to a 4% increase in unit volumes and acquisitions (+3%), which was partially offset by a 4% decline in currency. Excluding charges, overall segment profit was 15.8%, up 260 basis points versus 3Q'11, due to cost synergies and volume leverage, marking record profitability since the merger with Black & Decker.
Convergent Security Solutions (CSS) organic revenues declined low single digits primarily due to weakness in
Mechanical Access (MAS) organic sales were up slightly as modest growth in the residential lock business offset mid-single digit organic revenue declines in the commercial mechanical lock and automatic door businesses driven by soft U.S. retrofit markets and national accounts, respectively.
The segment profit rate, excluding charges, was 16.5%. Excluding Niscayah and charges, segment profit was a very strong 18.8%, reflective of the cost actions taken to offset volume pressures within the commercial mechanical lock and automatic door businesses.
Executive Vice President and Chief Operating Officer,
Revision Of 2012 Outlook
As a result of continued organic volume pressures and the negative mix effect associated with them, as well as increased investments in organic growth, the company is lowering expectations for its full year 2012 EPS to approximately
Free cash flow, excluding one-time charges and payments, is expected to be approximately
Including all acquisition, Black & Decker transaction-related one-time charges, the charges associated with the 2012 cost actions and the charges associated with the extinguishment of debt, the company expects EPS to approximate
Merger And Acquisition and Other Charges
Total one-time charges in 3Q'12 related to Merger and Acquisition charges, the charges associated with the
The company will host a conference call with investors today,
You can also access the slides via the Stanley Black & Decker Investor Relations iPad & iPhone app from the
The call will be accessible by telephone at (800) 446-1671, from outside the U.S. at +1 (847) 413-3362 and via the Internet at www.stanleyblackanddecker.com. To participate, please register on the web site at least fifteen minutes prior to the call and download and install any necessary audio software. Please use the conference identification number 33464852. A replay will also be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 33464852#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.
Organic sales growth is defined as total sales growth less the sales of companies acquired in the past twelve months and any foreign currency impacts. Operating margin is defined as sales less cost of sales and selling, general and administrative expenses. Management uses operating margin and its percentage of net sales as key measures to assess the performance of the Company as a whole, as well as the related measures at the segment level. The normalized statement of operations, cash flows and business segment information, as reconciled to GAAP on pages 14-19 for 2012 and 2011, is considered relevant to aid analysis of the Company's operating performance, earnings results and cash flows aside from the material impact of the one-time charges and payments associated with the Black & Decker merger, Niscayah acquisition and other smaller acquisitions of the Company, as well as the charges associated with the extinguishment of debt during 3Q'12.
Statements in this press release that are not historical, including but not limited to those regarding the Company's ability to: (i) achieve full year EPS of approximately
The Company's ability to deliver the Results as described above is based on current expectations and involves inherent risks and uncertainties, including factors listed below and other factors that could delay, divert, or change any of them, and could cause actual outcomes and results to differ materially from current expectations. In addition to the risks, uncertainties and other factors discussed in this press release, the risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied in the forward looking statements include, without limitation, those set forth under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and any material changes thereto set forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in the Company's other filings with the
The Company's ability to deliver the Results is dependent, or based, upon: (i) the receipt of regulatory approvals and satisfaction of other conditions to completion of the Infastech acquisition and HHI disposition within anticipated time frames; (ii) the Company's ability to execute integration and achieve the synergies, capitalize on growth opportunities, achieve the anticipated results of, and at the estimated costs for, the combination with Black & Decker and the acquisition of Niscayah; (iii) achieving organic net sales increase of 1% from a 2011 pro forma (to include Niscayah) revenue base of
The Company's ability to deliver the Results is also dependent upon: (i) the success of the Company's marketing and sales efforts, including the ability to develop and market new and innovative products in both existing and new markets; (ii) the ability of the Company to maintain or improve production rates in the Company's manufacturing facilities, respond to significant changes in product demand and fulfill demand for new and existing products; (iii) the Company's ability to continue improvements in working capital through effective management of accounts receivable and inventory levels; (iv) the ability to continue successfully managing and defending claims and litigation; (v) the success of the Company's efforts to mitigate any cost increases generated by, for example, increases in the cost of energy or significant Chinese Renminbi or other currency appreciation; (vi) the geographic distribution of the Company's earnings; (vii) the commitment to and success of the Stanley Fulfillment System; (viii) successful implementation with expected results of cost reduction programs; and (ix) successful completion of share repurchases at anticipated costs.
The Company's ability to achieve the Results will also be affected by external factors. These external factors include: challenging global macroeconomic environment; the continued economic growth of emerging markets, particularly
Stanley Black & Decker