Normalized earnings were $1.70 per diluted share compared with $1.59 per diluted share in the prior year. Net income, as reported, was $401.3 million, or $1.37 per diluted share. This compares with $125.2 million, or $0.42 per diluted share, in the prior year.
For the twelve months ended December 31, 2012, normalized diluted earnings per share exclude $0.24 per diluted share for restructuring and restructuring-related costs associated with Project Renewal and the European Transformation Plan; income tax charges of $0.08 per diluted share attributable to certain tax contingencies, expiration of statutes of limitation and resolution of tax examinations; $0.02 per diluted share related to the extinguishment of debt; and a net gain of $0.01 per diluted share from discontinued operations primarily related to the receipt of the escrow from the disposal of the hand torch and solder business. For the twelve months ended December 31, 2011, normalized earnings per diluted share exclude $1.03 per diluted share for impairment charges primarily related to goodwill write-downs; $0.24 per diluted share for restructuring and restructuring-related costs associated with the European Transformation Plan and Project Renewal; $0.02 per diluted share related to the incremental costs associated with the company’s CEO transition; $0.01 per diluted share related to the extinguishment of debt; and benefits of $0.17 per diluted share resulting from the reversal of certain tax contingencies due to the expiration of various statutes of limitation. In addition, last year the company recorded a net loss from discontinued operations of $9.4 million, or $0.03 per share, reflecting the income from discontinued operations and loss on disposal of the hand torch and solder business, which was excluded from normalized earnings. (A reconciliation of the “as reported” results to “normalized” results is included below.)
The company generated operating cash flow of $618.5 million during 2012 compared with $561.3 million in 2011. Capital expenditures were $177.2 million compared with $222.9 million in the prior year, principally related to lower expenditures on SAP implementations.
A reconciliation of the twelve months 2012 and 2011 results is as follows:
|Diluted earnings per share (as reported)||$||1.37||$||0.42|
|Restructuring and restructuring-related costs||$||0.24||$||0.24|
CEO transition costs
|Income tax– discrete contingencies,|
|expiration of statutes of limitation and|
|resolution of examinations||$||0.08||
|Loss related to the extinguishment of debt||$||0.02||$||0.01|
* totals may not add due to rounding
2013 OutlookThe company’s guidance and key assumptions for the full year 2013 are as follows:
- Core sales increase of 2 to 4 percent.
- Net sales are expected to grow 1 to 3 percent
- Currency rates are expected to decrease sales by about 100 basis points
- Normalized operating margin improvement of up to 20 basis points
- Normalized EPS growth of 5 to 8 percent, or $1.78 to $1.84
- The company’s 2013 normalized EPS expectation excludes between $90 and $110 million of restructuring and restructuring-related costs associated with Project Renewal. (A reconciliation to normalized results is included below.)
- The company is on track to realize cumulative annualized cost savings of approximately $270 to $325 million by the second quarter of 2015 related to Project Renewal, with cumulative annualized savings of $90 to $100 million expected by the first half of 2013. The company intends to reinvest the majority of Project Renewal savings in the business to strengthen brand building and selling capabilities and accelerate growth.
- Operating cash flow of between $575 and $625 million
- This operating cash flow guidance includes a U.S. pension plan contribution of approximately $100 million, approximately $50 million higher than the 2012 contribution, and
- restructuring and restructuring-related cash payments of approximately $70 to $90 million.
- The company plans to fund capital expenditures of $175 to $200 million during the year.
|Diluted earnings per share||$1.54 to $1.60|
|Restructuring and restructuring-related costs||$0.21 to $0.27|
|Normalized EPS||$1.78 to $1.84|
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