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Stanley Black & Decker Reports 2Q 2013 Results

Stanley Black & Decker (NYSE: SWK) today announced second quarter 2013 financial results.

  • 2Q’13 Revenues Increased 12% To $2.9 Billion
  • Organic Growth Accelerated To 5% As Company Growth Initiatives Gained Traction
  • 2Q’13 Diluted GAAP EPS, Including Charges, Was $1.23; Excluding Charges, 2Q’13 Diluted EPS Was $1.21
  • 2013 FY Guidance Reiterated: GAAP EPS Of $4.46 - $4.71; Excluding Charges, EPS Of $5.40 - $5.65 And Free Cash Flow Of Approximately $1 Billion

2Q’13 Key Points:

  • Net sales for the period were $2.9 billion, up 12% vs. the prior year, attributable to volume (+6%) and acquisitions (+7%), partially offset by price (-1%). Currency had a neutral impact on the quarter’s results although foreign exchange headwinds mounted late in the quarter.
  • The gross margin rate for the quarter was 35.1%. Excluding charges, the gross margin rate was 35.4%, down 100 basis points versus prior year, as the favorable impact of volume and cost synergies was offset by Security margins and higher promotional activity in CDIY.
  • SG&A expenses were 23.8% of sales. Excluding charges, SG&A expenses were 22.9% of sales, compared to a 2Q’12 level of 23.1%, reflecting volume leverage partially offset by investments in the organic growth initiatives.
  • Operating margin was 11.3% of sales. Excluding charges, operating margin was 12.4% of sales, down 90 basis points from the 2Q’12 operating margin of 13.3%.
  • The tax rate was 21.5%. Excluding charges, the tax rate was 24.6%, consistent with expectations for the quarter.
  • Diluted GAAP EPS, including charges, was $1.23. Excluding charges, 2Q’13 diluted EPS was $1.21.
  • Working capital turns for the quarter were 7.1, up 0.3 turns from 2Q’12. For the quarter, free cash flow was $96 million. Excluding charges and payments, free cash flow totaled $218 million.

Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “During the quarter we achieved strong organic growth particularly within CDIY and Industrial, bolstered by excellent growth across the emerging markets. We are also encouraged by positive second quarter Security order trends experienced in both North America and Europe which bode well for our second half Security performance. As a result of these factors, we anticipate a stronger second half organic growth performance for the overall Company accompanied by rebounding margin rates and are therefore able to reiterate our full year EPS guidance despite significant second half currency headwinds.”

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