Stanley Black & Decker (NYSE: SWK) today announced fourth quarter and full year 2012 financial results.
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 December 17 th, 2012 and has been recorded as discontinued operations. The majority of this business was part of the Company’s Security segment, with the remainder being part of the Company’s CDIY segment. Total sales associated with this business were $930.6 million in 2012 and $940.9 million in 2011.
- 4Q’12 Revenues Increased 4% To $2.7 Billion; Organic Revenues Up 2%
- 4Q’12 Diluted GAAP EPS, Including Charges, Was $0.79
- Excluding Charges, 4Q’12 Diluted EPS Was $1.37
- Full Year Diluted GAAP EPS Was $2.70. Excluding Charges, Full Year EPS Was $4.67
- Full Year 2012 Free Cash Flow Of $1.1 Billion, Excluding Charges & Payments; Working Capital Turns Reached 7.5
4Q’12 Key Points:
- Net sales for the period were $2.7 billion, up 4% versus prior year, attributable to volume (+2%) and acquisitions (+3%), which more than offset the 1% negative impact of foreign exchange.
- Diluted GAAP earnings per share (“EPS”), including charges, was $0.79. Excluding charges, 4Q’12 diluted EPS was $1.37.
- The gross margin rate for the quarter was 35.5%. Excluding charges, the gross margin rate was 36.0%, up slightly from prior year levels due to cost synergies and margin improvement initiatives.
- SG&A expenses were 24.1% of sales. Excluding charges, SG&A expenses were 22.6% of sales, down from a 4Q’11 level of 23.2%, as a result of continued cost synergy execution.
- Operating margin was 11.5% of sales. Excluding charges, operating margin was 13.3% of sales, up 80 bps from the 4Q’11 operating margin of 12.5%, due to cost synergies, margin improvement initiatives and volume leverage.
- The tax rate was a benefit of 1.6%. Excluding charges, the tax rate was 13.3%. The lower tax rate can be attributed to the divestiture of the HHI business, which had a higher than corporate line average tax rate. For the purposes of comparison versus original tax guidance, including HHI and excluding charges, the effective tax rate was approximately 17% for the fourth quarter and approximately 22% for the full year.
- Working capital turns for the quarter were 7.5, up 4% from 4Q’11. Free cash flow was $596 million, before the effect of $174 million of charges and payments.
Stanley Black & Decker’s CEO, John F. Lundgren, commented, “The close of 2012 marked a transformational year for the Company as we continued our successful evolution into a diversified global industrial enterprise well-positioned for long-term value creation. While we have work to do, including driving organic revenue growth while maintaining our focus on costs and productivity improvements, our strong cash flow generation, diversified revenue base, commitment to innovation and other proven areas of core competency leave us optimistic about the future of our Company.“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 $500 million in cost synergies, exceeding our original target of $350 million by 43%. In fact, the approximately $760 million in operating profit, excluding charges, that our CDIY segment alone generated in 2012 surpassed the entire 2009 operating profit of the stand-alone Stanley Works and Black & Decker companies combined. Revenue synergies, which were targeted to be between $300 to $400 million by the end of 2013, have already surpassed $300 million. We hit our post-merger free cash flow goal of $1 billion, excluding charges, more than a year earlier than targeted and we have distributed a significant amount of it back to shareholders directly, increasing our dividend by almost 50% and repurchasing over $550 million of our stock since the end of 2009, in addition to the $850 million of repurchases we are executing in conjunction with the HHI divestiture.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV