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TheStreet Open House

Stanley Black & Decker Reports 4Q 2012 And Full Year 2012 Results

Stocks in this article: SWK

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 Europe and the vast majority of global GDP growth generated by the emerging markets. With this, we believe our core businesses will grow at a similar rate to last year and that the organic growth initiatives now layered within them will generate an incremental point of growth, bringing our forecast to 2-3% organic growth in 2013, which will drive 16-21% of EPS accretion.

“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 $4.62 to $4.87 in 2013. For the full year of 2013 the Company estimates the one-time after tax charges to be approximately $125 million, which includes $30 million for Infastech.

Merger And Acquisition Related One-Time Charges and Credits

  • 4Q’12: Total one-time charges in 4Q’12 for continuing operations related to Mergers and Acquisitions were $131.4 million. Gross margin includes $11.3 million of these one-time charges, primarily facility closure-related charges, and SG&A includes $38.5 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee related matters. Approximately $30.4 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. Lastly, one-time charges of $24.1 million are included in Other, net and $57.5 million are included in restructuring charges, the majority of which represent acquisition-related restructuring charges associated with the severance of employees.
  • 2012: Total one-time charges in 2012 for continuing operations related to Mergers and Acquisitions charges, the charges associated with the $200 million in cost actions implemented in 2012, as well as the charges related to the extinguishment of debt during the third quarter were $442.2 million, or $330 million on an after-tax basis. Gross margin includes $29.6 million of these one-time charges, primarily facility closure-related charges, and SG&A includes $138.4 million in one-time charges, primarily for integration-related administration costs and consulting fees, as well as employee related matters. Approximately $90.9 million of these costs that impact the Company’s operating margin are included in segment results, with the remainder in corporate overhead. One-time charges of $98.8 million are included in Other, net primarily related to the extinguishment of debt and transaction costs. Lastly, one-time charges of $175.4 million are included in restructuring charges, the majority of which represent Niscayah-related restructuring charges and cost containment actions associated with the severance of employees.

The Company will host a conference call with investors today, Thursday, January 24th, at 8:00am ET. A slide presentation which will accompany the call will be available at www.stanleyblackanddecker.com and will remain available after the call.

You can also access the slides via the just-released Stanley Black & Decker Investor Relations iPad app from the Apple App Store by searching for “SWK Investor Relations”.

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