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|Stanley Black & Decker Reports 4Q 2012 and Full Year 2012 Results|
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NEW BRITAIN, Conn.--(BUSINESS WIRE)--Jan. 24, 2013--
These results reflect the Company's continuing operations and hence exclude the Hardware & Home Improvement business (HHI) and the related gain on the sale, as the business was divested on
4Q'12 Key Points:
Stanley Black & Decker's CEO,
"At the three year anniversary of the merger of Stanley and Black & Decker, the combination has by all measures been a resounding success. By the end of 2013 we will have achieved
"The success of the Black & Decker merger further validates our Company's acquisition integration capabilities. Looking forward, we are confident in our ability to adapt and apply our expertise and specialized skills in this area to fuel organic growth initiatives. We expect these efforts to ultimately drive 2-3 points of profitable incremental revenue growth on top of what our core franchise will also yield, bringing us to our long-term target of 4-6% by 2015. 2013 will be another important year as we work toward our mid-decade vision of being a
4Q'12 Segment Results
President and Chief Operating Officer,
"With the significant transformational milestones we achieved in 2012 - divesting HHI and announcing the acquisition of Infastech - we have taken an important step forward towards our mid-decade goals. Including Infastech, 16% of our revenues will be generated in the emerging markets. The emerging markets represent a powerful opportunity for us in 2013 and beyond, as 70% of the tool and security industry growth over the next 20 years will come from these regions. We have plans to double our CDIY, IAR and Security businesses in the emerging markets by 2015, which will be supported by the addition of approximately 1,000 revenue producing employees, all in-region. We expect both growth and operating margin rates from the emerging markets to be well above line average for the foreseeable future."
Full Year 2012 Key Points & Segment Results:
FY'12 Segment Results
The Company expects full year 2013 EPS to be in the range of
Free cash flow, excluding one-time charges and payments, is expected to be approximately
Mr. Allan added, "Looking at 2013 we are anticipating a global macroeconomic climate similar to 2012: modest growth in the U.S. as continued housing related momentum offsets slowly recovering security and industrial end markets, a stagnant to slightly negative environment in
"Lastly, as we have previously communicated, the company does not anticipate any significant M&A activity in 2013, and only foresees potential bolt-on transactions concentrated in the emerging markets. We are focused on modest deleveraging and continuing to pay our strong dividend, and we do not anticipate any significant share repurchases outside of those in conjunction with the HHI divestiture. As a result, our cash flow return on investment, or CFROI, will be solidly within our 12-15% target range.
Including all charges, the Company expects EPS to approximate
Merger And Acquisition Related One-Time Charges and Credits
The Company will host a conference call with investors today,
You can also access the slides via the just-released Stanley Black & Decker Investor Relations iPad app from the
The call will be accessible by telephone at (800) 447-0521, from outside the U.S. at +1 (847) 413-3238 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 3403 7396. 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 3403 7396#.
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. 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. 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. The normalized statement of operations, cash flows and business segment information, as reconciled to GAAP on pages 16-21 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. Normalized cash flow and free cash flow, as reconciled from the associated GAAP measures on pages 18 and 19 for 2012 and 2011 are considered meaningful pro forma metrics to aid the understanding of the company's cash flow performance aside from the material impact of the M&A-related payments and charges.
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 2013 diluted EPS of
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 Company's ability to achieve additional synergies in 2013 from the combination with Black & Decker and the acquisition of Niscayah; (ii) receipt of regulatory approvals required to complete the Infastech acquisition prior to
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