Stanley Black & Decker Provides 2014 Outlook; Expects ~4% Organic Growth

Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We made significant progress driving organic growth during 2013 and expect momentum to continue during 2014. The investments we made this year will help us achieve overall organic growth of approximately 4% in 2014 driven by year over year gains within the majority of our businesses despite a persistent low growth macro environment."

New Britain, CT - Stanley Black & Decker provided additional information regarding its near term operational priorities, capital allocation actions and its 2014 financial outlook, and also reaffirmed its 2013 guidance (1).

2013 / 2014 Guidance Highlights

 

 

 

 

 

 

 
  

2013

Guidance

   

2014

Guidance

- Organic Growth

 

~3%

   

~4%

- Earnings Per Share (1)

 

~$4.90 - $5.00

   

~$5.30 - $5.50

- Earnings Per Share–GAAP

 

~$3.05 - $3.15

   

~$5.20 - $5.40

- Free Cash Flow (2)

     

~$675M

- Free Cash Flow Before Charges (1)

 

~$800M

    
      

 

(1) Excluding Charges/Payments
(2) Includes $250M cash outlays in 2014 for payments related to M&A activity and general restructuring, primarily for severance.

Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We made significant progress driving organic growth during 2013 and expect momentum to continue during 2014. The investments we made this year will help us achieve overall organic growth of approximately 4% in 2014 driven by year over year gains within the majority of our businesses despite a persistent low growth macro environment. Additionally, benefits from the recent cost reductions and operational actions to improve Security margins will result in strong earnings per share growth while funding continued growth investments and facing significant currency and tax headwinds.

“We believe these steps will drive operating leverage within our businesses and combined with our recently announced capital allocation actions will result in meaningful improvements in shareholder returns. Solid execution in 2014 enabled by the overall strength and diversity of our portfolio, combined with our underlying strategic framework, position us well to deliver on our long-term financial objectives.”

Key 2014 Planning Assumptions Include The Following (All EPS Impacts Assume 2013 At The $4.95 Midpoint Of Guidance):

  • Organic growth expected to be ~4% (+~$0.50 - $0.60) inclusive of carry-over growth investments
  • Security margin improvement of ~150 bps expected to contribute ~$0.15
  • Cost actions in CDIY, Industrial and Corporate ~$0.20
  • Infastech accretion and carry-over synergies ~$0.10
  • Partially offsetting these items are:
    • Foreign exchange (~$0.30)
    • Higher tax rate of ~21% - 22% (~$0.10 – $0.15)
    • Interest & other expenses (~$0.10 - $0.15)
  • One-time charges anticipated to be ~$25 million to support the Infastech integration
    • GAAP EPS of $5.20 – $5.40
  • Free cash flow expected to be ~$675 million which includes ~$250M of one-time payments

The Company hosted a conference call with investors today, Thursday December 12, at 8:00am ET. A slide presentation which accompanied the call is available at www.stanleyblackanddecker.com.

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

A replay will be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3617-3537#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.

Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.

This guidance reflects the Company’s continuing operations. The Company sold its Hardware & Home Improvement business (HHI), including the residential portion of Tong Lung in December of 2012. The sale of this business occurred in a First and Second Closing. The First closing, which excluded the residential portion of Tong Lung, occurred on December 17, 2012. The Second closing in which the residential portion of Tong Lung was sold occurred on April 8, 2013 and the respective operating results were reported as discontinued operations through this date. In addition, in 3Q’13 the Company has reported two small businesses as discontinued operations.

Organic 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.

Stanley Black & Decker Provides 2014 Outlook

NEW BRITAIN, Conn.--(BUSINESS WIRE)--Dec 12, 2013--Stanley Black & Decker (NYSE: SWK) today provided additional information regarding its near term operational priorities, capital allocation actions and its 2014 financial outlook, and also reaffirmed its 2013 guidance (1).

2013 / 2014 Guidance Highlights

 

 

 

 

 

 

 
  

2013

Guidance

   

2014

Guidance

- Organic Growth

 

~3%

   

~4%

- Earnings Per Share (1)

 

~$4.90 - $5.00

   

~$5.30 - $5.50

- Earnings Per Share–GAAP

 

~$3.05 - $3.15

   

~$5.20 - $5.40

- Free Cash Flow (2)

     

~$675M

- Free Cash Flow Before Charges (1)

 

~$800M

    
      

 

(1) Excluding Charges/Payments
(2) Includes $250M cash outlays in 2014 for payments related to M&A activity and general restructuring, primarily for severance.

Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We made significant progress driving organic growth during 2013 and expect momentum to continue during 2014. The investments we made this year will help us achieve overall organic growth of approximately 4% in 2014 driven by year over year gains within the majority of our businesses despite a persistent low growth macro environment. Additionally, benefits from the recent cost reductions and operational actions to improve Security margins will result in strong earnings per share growth while funding continued growth investments and facing significant currency and tax headwinds.

“We believe these steps will drive operating leverage within our businesses and combined with our recently announced capital allocation actions will result in meaningful improvements in shareholder returns. Solid execution in 2014 enabled by the overall strength and diversity of our portfolio, combined with our underlying strategic framework, position us well to deliver on our long-term financial objectives.”

Key 2014 Planning Assumptions Include The Following (All EPS Impacts Assume 2013 At The $4.95 Midpoint Of Guidance):

  • Organic growth expected to be ~4% (+~$0.50 - $0.60) inclusive of carry-over growth investments
  • Security margin improvement of ~150 bps expected to contribute ~$0.15
  • Cost actions in CDIY, Industrial and Corporate ~$0.20
  • Infastech accretion and carry-over synergies ~$0.10
  • Partially offsetting these items are:
    • Foreign exchange (~$0.30)
    • Higher tax rate of ~21% - 22% (~$0.10 – $0.15)
    • Interest & other expenses (~$0.10 - $0.15)
  • One-time charges anticipated to be ~$25 million to support the Infastech integration
    • GAAP EPS of $5.20 – $5.40
  • Free cash flow expected to be ~$675 million which includes ~$250M of one-time payments

The Company hosted a conference call with investors today, Thursday December 12, at 8:00am ET. A slide presentation which accompanied the call is available at www.stanleyblackanddecker.com.

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

A replay will be available two hours after the call and can be accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3617-3537#. The replay will also be available as a podcast within 24 hours and can be accessed on our website and via iTunes.

Stanley Black & Decker, an S&P 500 company, is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, healthcare solutions, engineered fastening systems, and more. Learn more at www.stanleyblackanddecker.com.

This guidance reflects the Company’s continuing operations. The Company sold its Hardware & Home Improvement business (HHI), including the residential portion of Tong Lung in December of 2012. The sale of this business occurred in a First and Second Closing. The First closing, which excluded the residential portion of Tong Lung, occurred on December 17, 2012. The Second closing in which the residential portion of Tong Lung was sold occurred on April 8, 2013 and the respective operating results were reported as discontinued operations through this date. In addition, in 3Q’13 the Company has reported two small businesses as discontinued operations.

Organic 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.

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