STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | SECOND QUARTER | | YEAR-TO-DATE |
| | 2024 | | 2023 | | 2024 | | 2023 |
| NET SALES | $ | 4,024.4 | | | $ | 4,158.9 | | | $ | 7,893.9 | | | $ | 8,090.7 | |
| COSTS AND EXPENSES | | | | | | | |
| Cost of sales | 2,883.2 | | | 3,226.8 | | | 5,644.2 | | | 6,323.1 | |
| Gross profit | 1,141.2 | | | 932.1 | | | 2,249.7 | | | 1,767.6 | |
| % of Net Sales | 28.4 | % | | 22.4 | % | | 28.5 | % | | 21.8 | % |
| Selling, general and administrative | 828.6 | | | 837.3 | | | 1,680.4 | | | 1,662.4 | |
| % of Net Sales | 20.6 | % | | 20.1 | % | | 21.3 | % | | 20.5 | % |
| Other - net | 226.5 | | | 66.6 | | | 306.5 | | | 130.3 | |
| Loss on sales of businesses | — | | | — | | | — | | | 7.6 | |
| Asset impairment charge | — | | | — | | | 25.5 | | | — | |
| Restructuring charges | 29.8 | | | 4.6 | | | 44.8 | | | 16.7 | |
| Income (loss) from operations | 56.3 | | | 23.6 | | | 192.5 | | | (49.4) | |
| Interest - net | 78.4 | | | 99.4 | | | 166.3 | | | 190.5 | |
| (LOSS) EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | (22.1) | | | (75.8) | | | 26.2 | | | (239.9) | |
| Income taxes on continuing operations | (2.9) | | | (253.3) | | | 25.9 | | | (229.6) | |
| NET (LOSS) EARNINGS FROM CONTINUING OPERATIONS | $ | (19.2) | | | $ | 177.5 | | | $ | 0.3 | | | $ | (10.3) | |
| Gain (loss) on Security sale before income taxes | 10.4 | | | (0.8) | | | 10.4 | | | (0.8) | |
| Income taxes on discontinued operations | 2.4 | | | (0.3) | | | 2.4 | | | (0.3) | |
| NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS | $ | 8.0 | | | $ | (0.5) | | | $ | 8.0 | | | $ | (0.5) | |
| NET (LOSS) EARNINGS | $ | (11.2) | | | $ | 177.0 | | | $ | 8.3 | | | $ | (10.8) | |
| BASIC (LOSS) EARNINGS PER SHARE OF COMMON STOCK | | | | | | | |
| Continuing operations | $ | (0.13) | | | $ | 1.19 | | | $ | — | | | $ | (0.07) | |
| Discontinued operations | $ | 0.05 | | | $ | — | | | $ | 0.05 | | | $ | — | |
| Total basic (loss) earnings per share of common stock | $ | (0.07) | | | $ | 1.18 | | | $ | 0.06 | | | $ | (0.07) | |
| DILUTED (LOSS) EARNINGS PER SHARE OF COMMON STOCK | | | | | | | |
| Continuing operations | $ | (0.13) | | | $ | 1.18 | | | $ | — | | | $ | (0.07) | |
| Discontinued operations | $ | 0.05 | | | $ | — | | | $ | 0.05 | | | $ | — | |
| Total diluted (loss) earnings per share of common stock | $ | (0.07) | | | $ | 1.18 | | | $ | 0.05 | | | $ | (0.07) | |
| DIVIDENDS PER SHARE OF COMMON STOCK | $ | 0.81 | | | $ | 0.80 | | | $ | 1.62 | | | $ | 1.60 | |
| WEIGHTED-AVERAGE SHARES OUTSTANDING (in thousands) | | | | | | | |
| Basic | 150,394 | | 149,687 | | 150,311 | | 149,631 |
| Diluted | 150,394 | | 150,227 | | 151,012 | | 149,631 |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | |
| | June 29, 2024 | | December 30, 2023 |
| ASSETS | | | | |
| Cash and cash equivalents | | $ | 318.5 | | | $ | 449.4 | |
| Accounts and notes receivable, net | | 1,512.1 | | | 1,302.0 | |
| Inventories, net | | 4,562.4 | | | 4,738.6 | |
| Current assets held for sale | | — | | | 140.8 | |
| Other current assets | | 392.0 | | | 386.5 | |
| Total current assets | | 6,785.0 | | | 7,017.3 | |
| Property, plant and equipment, net | | 2,078.7 | | | 2,169.9 | |
| Goodwill and other intangibles, net | | 11,801.7 | | | 11,945.5 | |
| Long-term assets held for sale | | — | | | 716.8 | |
| Other assets | | 1,788.8 | | | 1,814.3 | |
| Total assets | | $ | 22,454.2 | | | $ | 23,663.8 | |
| LIABILITIES AND SHAREOWNERS’ EQUITY | | | | |
| Short-term borrowings | | $ | 492.4 | | | $ | 1,074.8 | |
| Current maturities of long-term debt | | 500.1 | | | 1.1 | |
| Accounts payable | | 2,450.4 | | | 2,298.9 | |
| Accrued expenses | | 1,899.9 | | | 2,464.3 | |
| Current liabilities held for sale | | — | | | 44.1 | |
| Total current liabilities | | 5,342.8 | | | 5,883.2 | |
| Long-term debt | | 5,602.4 | | | 6,101.0 | |
| Long-term liabilities held for sale | | — | | | 84.8 | |
| Other long-term liabilities | | 2,787.1 | | | 2,538.7 | |
| Shareowners’ equity | | 8,721.9 | | | 9,056.1 | |
| Total liabilities and shareowners' equity | | $ | 22,454.2 | | | $ | 23,663.8 | |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | SECOND QUARTER | | YEAR-TO-DATE |
| | 2024 | | 2023 | | 2024 | | 2023 |
| OPERATING ACTIVITIES | | | | | | | |
| Net (loss) earnings | $ | (11.2) | | | $ | 177.0 | | | $ | 8.3 | | | $ | (10.8) | |
| Depreciation and amortization | 155.0 | | | 164.4 | | | 295.2 | | | 325.6 | |
| Loss on sales of businesses | — | | | — | | | — | | | 7.6 | |
| (Gain) loss on sale of discontinued operations | (10.4) | | | 0.8 | | | (10.4) | | | 0.8 | |
| Asset impairment charge | — | | | — | | | 25.5 | | | — | |
| Changes in working capital1 | 397.8 | | | 278.9 | | | 38.0 | | | 97.7 | |
| Other | 41.8 | | | (356.7) | | | (214.6) | | | (442.8) | |
| Net cash provided by (used in) operating activities | 573.0 | | | 264.4 | | | 142.0 | | | (21.9) | |
| INVESTING AND FINANCING ACTIVITIES | | | | | | | |
| Capital and software expenditures | (87.2) | | | (68.3) | | | (152.9) | | | (136.5) | |
| Proceeds from sales of businesses, net of cash sold | 735.6 | | | (6.3) | | | 735.6 | | | (5.7) | |
| Proceeds from debt issuances, net of fees | — | | | (1.3) | | | — | | | 745.9 | |
| Net short-term commercial paper repayments | (1,245.7) | | | (42.0) | | | (570.8) | | | (327.9) | |
| Cash dividends on common stock | (121.8) | | | (119.7) | | | (243.6) | | | (239.5) | |
| Effect of exchange rate changes on cash | (15.0) | | | (14.2) | | | (42.6) | | | (5.1) | |
| Other | 0.4 | | | (7.4) | | | (1.6) | | | (18.3) | |
| Net cash (used in) provided by investing and financing activities | (733.7) | | | (259.2) | | | (275.9) | | | 12.9 | |
| (Decrease) increase in cash, cash equivalents and restricted cash | (160.7) | | | 5.2 | | | (133.9) | | | (9.0) | |
| Cash, cash equivalents and restricted cash, beginning of period | 481.4 | | | 390.7 | | | 454.6 | | | 404.9 | |
| Cash, cash equivalents and restricted cash, end of period | $ | 320.7 | | | $ | 395.9 | | | $ | 320.7 | | | $ | 395.9 | |
| | | | | | | | |
| Free Cash Flow Computation2 | | | | | | | |
| Net cash provided by (used in) operating activities | $ | 573.0 | | | $ | 264.4 | | | $ | 142.0 | | | $ | (21.9) | |
| Less: capital and software expenditures | (87.2) | | | (68.3) | | | (152.9) | | | (136.5) | |
| Free cash flow (before dividends) | $ | 485.8 | | | $ | 196.1 | | | $ | (10.9) | | | $ | (158.4) | |
| | | | | | | | |
| Reconciliation of Cash, Cash Equivalents and Restricted Cash | | | | | | | |
| | June 29, 2024 | | December 30, 2023 | | | | |
| Cash and cash equivalents | $ | 318.5 | | | $ | 449.4 | | | | | |
| Restricted cash included in Other current assets | 2.2 | | | 4.6 | | | | | |
| Cash and cash equivalents included in Current assets held for sale | — | | | 0.6 | | | | | |
| Cash, cash equivalents and restricted cash | $ | 320.7 | | | $ | 454.6 | | | | | |
| | | | | | | | |
| 1 | Working capital is comprised of accounts receivable, inventory, accounts payable and deferred revenue. |
| 2 | Free cash flow is defined as cash flow from operations less capital and software expenditures. Management considers free cash flow an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners, and is useful information for investors. 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, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | SECOND QUARTER | | YEAR-TO-DATE |
| | 2024 | | 2023 | | 2024 | | 2023 |
| NET SALES | | | | | | | |
| Tools & Outdoor | $ | 3,528.7 | | | $ | 3,542.2 | | | $ | 6,813.3 | | | $ | 6,857.6 | |
| Industrial | 495.7 | | | 616.7 | | | 1,080.6 | | | 1,233.1 | |
| Total | $ | 4,024.4 | | | $ | 4,158.9 | | | $ | 7,893.9 | | | $ | 8,090.7 | |
| SEGMENT PROFIT | | | | | | | |
| Tools & Outdoor | $ | 316.1 | | | $ | 102.0 | | | $ | 571.8 | | | $ | 120.7 | |
| Industrial | 66.8 | | | 71.6 | | | 132.0 | | | 139.0 | |
| Segment Profit | 382.9 | | | 173.6 | | | 703.8 | | | 259.7 | |
| Corporate Overhead | (70.3) | | | (78.8) | | | (134.5) | | | (154.5) | |
| Total | $ | 312.6 | | | $ | 94.8 | | | $ | 569.3 | | | $ | 105.2 | |
| Segment Profit as a Percentage of Net Sales | | | | | | | |
| Tools & Outdoor | 9.0 | % | | 2.9 | % | | 8.4 | % | | 1.8 | % |
| Industrial | 13.5 | % | | 11.6 | % | | 12.2 | % | | 11.3 | % |
| Segment Profit | 9.5 | % | | 4.2 | % | | 8.9 | % | | 3.2 | % |
| | | | | | | | |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER 2024 |
| | | GAAP | | Non-GAAP
Adjustments | | Non-GAAP2 |
| Gross profit | | $ | 1,141.2 | | | $ | 33.5 | | | $ | 1,174.7 | |
| % of Net Sales | | 28.4 | % | | | | 29.2 | % |
| Selling, general and administrative | | 828.6 | | | (27.6) | | | 801.0 | |
| % of Net Sales | | 20.6 | % | | | | 19.9 | % |
| (Loss) earnings from continuing operations before income taxes | | (22.1) | | | 239.3 | | | 217.2 | |
| Income taxes on continuing operations | | (2.9) | | | 55.6 | | | 52.7 | |
| Net (loss) earnings from continuing operations | | (19.2) | | | 183.7 | | | 164.5 | |
| Diluted (loss) earnings per share of common stock - Continuing operations1 | | $ | (0.13) | | | $ | 1.22 | | | $ | 1.09 | |
| | | | | | | |
| 1 | The Non-GAAP diluted earnings per share for the second quarter of 2024 is calculated using diluted weighted-average shares outstanding of 151.103 million. |
| | | | | | | |
| | | SECOND QUARTER 2023 |
| | | GAAP | | Non-GAAP
Adjustments | | Non-GAAP2 |
| Gross profit | | $ | 932.1 | | | $ | 51.4 | | | $ | 983.5 | |
| % of Net Sales | | 22.4 | % | | | | 23.6 | % |
| Selling, general and administrative | | 837.3 | | | (25.4) | | | 811.9 | |
| % of Net Sales | | 20.1 | % | | | | 19.5 | % |
| Loss from continuing operations before income taxes | | (75.8) | | | 71.1 | | | (4.7) | |
| Income taxes on continuing operations | | (253.3) | | | 265.5 | | | 12.2 | |
| Net earnings (loss) from continuing operations | | 177.5 | | | (194.4) | | | (16.9) | |
| Diluted earnings (loss) per share of common stock - Continuing operations | | $ | 1.18 | | | $ | (1.29) | | | $ | (0.11) | |
| | | | | | | |
| 2 | The Non-GAAP 2024 and 2023 information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the Company’s results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. See further detail on Non-GAAP adjustments on page 16. |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | YEAR-TO-DATE 2024 |
| | | GAAP | | Non-GAAP
Adjustments | | Non-GAAP1 |
| Gross profit | | $ | 2,249.7 | | | $ | 47.9 | | | $ | 2,297.6 | |
| % of Net Sales | | 28.5 | % | | | | 29.1 | % |
| Selling, general and administrative | | 1,680.4 | | | (47.7) | | | 1,632.7 | |
| % of Net Sales | | 21.3 | % | | | | 20.7 | % |
| Earnings from continuing operations before income taxes | | 26.2 | | | 310.8 | | | 337.0 | |
| Income taxes on continuing operations | | 25.9 | | | 62.4 | | | 88.3 | |
| Net earnings from continuing operations | | 0.3 | | | 248.4 | | | 248.7 | |
| Diluted earnings per share of common stock - Continuing operations | | $ | — | | | $ | 1.65 | | | $ | 1.65 | |
| | | | | | | |
| | | | | | | |
| | | YEAR-TO-DATE 2023 |
| | | GAAP | | Non-GAAP
Adjustments | | Non-GAAP1 |
| Gross profit | | $ | 1,767.6 | | | $ | 124.8 | | | $ | 1,892.4 | |
| % of Net Sales | | 21.8 | % | | | | 23.4 | % |
| Selling, general and administrative | | 1,662.4 | | | (46.1) | | | 1,616.3 | |
| % of Net Sales | | 20.5 | % | | | | 20.0 | % |
| Loss from continuing operations before income taxes | | (239.9) | | | 177.9 | | | (62.0) | |
| Income taxes on continuing operations | | (229.6) | | | 245.1 | | | 15.5 | |
| Net loss from continuing operations | | (10.3) | | | (67.2) | | | (77.5) | |
| Diluted loss per share of common stock - Continuing operations | | $ | (0.07) | | | $ | (0.45) | | | $ | (0.52) | |
| | | | | | | |
| 1 | The Non-GAAP 2024 and 2023 information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the Company’s results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. See further detail on Non-GAAP adjustments on page 16. |
| |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | SECOND QUARTER 2024 |
| | | GAAP | | Non-GAAP Adjustments1 | | Non-GAAP3 |
| SEGMENT PROFIT | | | | | | |
| Tools & Outdoor | | $ | 316.1 | | | $ | 52.6 | | | $ | 368.7 | |
| Industrial | | 66.8 | | | 0.3 | | | 67.1 | |
| Segment Profit | | 382.9 | | | 52.9 | | | 435.8 | |
| Corporate Overhead | | (70.3) | | | 8.2 | | | (62.1) | |
| Total | | $ | 312.6 | | | $ | 61.1 | | | $ | 373.7 | |
| Segment Profit as a Percentage of Net Sales | | | | | | |
| Tools & Outdoor | | 9.0 | % | | | | 10.4 | % |
| Industrial | | 13.5 | % | | | | 13.5 | % |
| Segment Profit | | 9.5 | % | | | | 10.8 | % |
| | | | | | | |
| 1 | Non-GAAP adjustments relate primarily to footprint actions associated with the supply chain transformation and transition services costs related to previously divested businesses. |
| | | | | | | |
| | | SECOND QUARTER 2023 |
| | | GAAP | | Non-GAAP Adjustments2 | | Non-GAAP3 |
| SEGMENT PROFIT | | | | | | |
| Tools & Outdoor | | $ | 102.0 | | | $ | 55.8 | | | $ | 157.8 | |
| Industrial | | 71.6 | | | 8.5 | | | 80.1 | |
| Segment Profit | | 173.6 | | | 64.3 | | | 237.9 | |
| Corporate Overhead | | (78.8) | | | 12.5 | | | (66.3) | |
| Total | | $ | 94.8 | | | $ | 76.8 | | | $ | 171.6 | |
| Segment Profit as a Percentage of Net Sales | | | | | | |
| Tools & Outdoor | | 2.9 | % | | | | 4.5 | % |
| Industrial | | 11.6 | % | | | | 13.0 | % |
| Segment Profit | | 4.2 | % | | | | 5.7 | % |
| | | | | | | |
| 2 | Non-GAAP adjustments relate primarily to footprint actions and other costs associated with the supply chain transformation. |
| 3 | The Non-GAAP 2024 and 2023 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the Company’s results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | |
| | | YEAR-TO-DATE 2024 |
| | | GAAP | | Non-GAAP Adjustments1 | | Non-GAAP3 |
| SEGMENT PROFIT | | | | | | |
| Tools & Outdoor | | $ | 571.8 | | | $ | 75.5 | | | $ | 647.3 | |
| Industrial | | 132.0 | | | 6.0 | | | 138.0 | |
| Segment Profit | | 703.8 | | | 81.5 | | | 785.3 | |
| Corporate Overhead | | (134.5) | | | 14.1 | | | (120.4) | |
| Total | | $ | 569.3 | | | $ | 95.6 | | | $ | 664.9 | |
| Segment Profit as a Percentage of Net Sales | | | | | | |
| Tools & Outdoor | | 8.4 | % | | | | 9.5 | % |
| Industrial | | 12.2 | % | | | | 12.8 | % |
| Segment Profit | | 8.9 | % | | | | 9.9 | % |
| | | | | | | |
| 1 | Non-GAAP adjustments relate primarily to footprint actions associated with the supply chain transformation and transition services costs related to previously divested businesses. |
| | | | | | | |
| | | YEAR-TO-DATE 2023 |
| | | GAAP | | Non-GAAP Adjustments2 | | Non-GAAP3 |
| SEGMENT PROFIT | | | | | | |
| Tools & Outdoor | | $ | 120.7 | | | $ | 135.0 | | | $ | 255.7 | |
| Industrial | | 139.0 | | | 8.8 | | | 147.8 | |
| Segment Profit | | 259.7 | | | 143.8 | | | 403.5 | |
| Corporate Overhead | | (154.5) | | | 27.1 | | | (127.4) | |
| Total | | $ | 105.2 | | | $ | 170.9 | | | $ | 276.1 | |
| Segment Profit as a Percentage of Net Sales | | | | | | |
| Tools & Outdoor | | 1.8 | % | | | | 3.7 | % |
| Industrial | | 11.3 | % | | | | 12.0 | % |
| Segment Profit | | 3.2 | % | | | | 5.0 | % |
| | | | | | | |
| 2 | Non-GAAP adjustments relate primarily to footprint actions and other costs associated with the supply chain transformation and integration-related costs. |
| 3 | The Non-GAAP 2024 and 2023 business segment information, as reconciled to GAAP above, is considered relevant to aid analysis and understanding of the Company’s results, business trends and outlook measures aside from the material impact of certain gains and charges and ensures appropriate comparability to operating results of prior periods. |
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP (LOSS) EARNINGS TO EBITDA
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | SECOND QUARTER | | YEAR-TO-DATE |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Net (loss) earnings from continuing operations | | $ | (19.2) | | | $ | 177.5 | | | $ | 0.3 | | | $ | (10.3) | |
| % of Net Sales | | (0.5) | % | | 4.3 | % | | — | % | | (0.1) | % |
| | | | | | | | |
| Interest - net | | 78.4 | | | 99.4 | | | 166.3 | | | 190.5 | |
| Income taxes on continuing operations | | (2.9) | | | (253.3) | | | 25.9 | | | (229.6) | |
| Depreciation and amortization | | 155.0 | | | 164.4 | | | 295.2 | | | 325.6 | |
EBITDA1 | | $ | 211.3 | | | $ | 188.0 | | | $ | 487.7 | | | $ | 276.2 | |
| % of Net Sales | | 5.3 | % | | 4.5 | % | | 6.2 | % | | 3.4 | % |
| | | | | | | | |
| Non-GAAP Adjustments before income taxes | | 239.3 | | | 71.1 | | | 310.8 | | | 177.9 | |
| | | | | | | | |
| Less: Accelerated depreciation included in Non-GAAP Adjustments before income taxes | | 21.3 | | | 20.6 | | | 26.6 | | | 38.1 | |
Adjusted EBITDA1 | | $ | 429.3 | | | $ | 238.5 | | | $ | 771.9 | | | $ | 416.0 | |
| % of Net Sales | | 10.7 | % | | 5.7 | % | | 9.8 | % | | 5.1 | % |
| | | | | |
| 1 | EBITDA is earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA represents EBITDA excluding certain gains and charges, as summarized below. EBITDA and Adjusted EBITDA, both Non-GAAP measures, are considered relevant to aid analysis and understanding of the Company’s operating results and ensures appropriate comparability to prior periods. |
SUMMARY OF NON-GAAP ADJUSTMENTS BEFORE INCOME TAXES
(Unaudited, Millions of Dollars)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | SECOND QUARTER | | YEAR-TO-DATE |
| | 2024 | | 2023 | | 2024 | | 2023 |
| Supply Chain Transformation Costs: | | | | | | | | |
Footprint Rationalization2 | | $ | 24.0 | | | $ | 21.3 | | | $ | 32.4 | | | $ | 80.6 | |
Strategic Sourcing & Operational Excellence3 | | 7.6 | | | 30.7 | | | 13.4 | | | 44.8 | |
| Facility-related costs | | 1.6 | | | 0.2 | | | 2.3 | | | 0.9 | |
| Other charges (gains) | | 0.3 | | | (0.8) | | | (0.2) | | | (1.5) | |
| Gross Profit | | $ | 33.5 | | | $ | 51.4 | | | $ | 47.9 | | | $ | 124.8 | |
| | | | | | | | |
| Supply Chain Transformation Costs: | | | | | | | | |
Footprint Rationalization2 | | $ | 15.5 | | | $ | 3.7 | | | $ | 21.9 | | | $ | 3.8 | |
| Complexity Reduction & Operational Excellence | | 1.5 | | | 6.7 | | | 3.2 | | | 6.8 | |
Acquisition & integration-related cost4 | | 3.9 | | | 2.4 | | | 6.7 | | | 12.5 | |
| Transition services costs related to previously divested businesses | | 4.7 | | | 12.9 | | | 10.2 | | | 25.7 | |
| Other charges (gains) | | 2.0 | | | (0.3) | | | 6.0 | | | (2.7) | |
| Selling, general and administrative | | $ | 27.6 | | | $ | 25.4 | | | $ | 47.7 | | | $ | 46.1 | |
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Other, net5 | | $ | (5.4) | | | $ | (10.3) | | | $ | (8.9) | | | $ | (17.3) | |
| Loss on sales of businesses | | — | | | — | | | — | | | 7.6 | |
Asset impairment charge6 | | — | | | — | | | 25.5 | | | — | |
Environmental charges7 | | 153.8 | | | — | | | 153.8 | | | — | |
| Restructuring charges | | 29.8 | | | 4.6 | | | 44.8 | | | 16.7 | |
| (Loss) earnings from continuing operations before income taxes | | $ | 239.3 | | | $ | 71.1 | | | $ | 310.8 | | | $ | 177.9 | |
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| 2 | Footprint Rationalization costs in 2024 primarily relate to accelerated depreciation of manufacturing and distribution center equipment of $24.7 million and other facility exit and re-configuration costs of $18.2 million. In 2023, transfers and closures of targeted manufacturing sites, including Fort Worth, Texas and Cheraw, South Carolina as previously announced in March 2023, resulted in accelerated depreciation of production equipment of $37.7 million and non-cash asset write-downs of $42.2 million (predominantly tooling, raw materials and WIP). |
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| 3 | Strategic Sourcing & Operational Excellence costs in 2023 primarily relate to third-party consultant fees to provide expertise in identifying and quantifying opportunities to source in a more integrated manner and re-design in-plant operations following footprint rationalization, developing a detailed program and related governance, and assisting the Company with the implementation of actions necessary to achieve the related objectives. |
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| 4 | Acquisition & integration-related costs primarily relate to the MTD and Excel acquisitions, including costs to integrate the organizations and shared processes, as well as harmonize key IT applications and infrastructure. |
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| 5 | Includes deal-related costs, net of income related to providing transition services to previously divested businesses. |
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| 6 | The $25.5 million pre-tax asset impairment charge in 2024 related to the Infrastructure business. |
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| 7 | The $153.8 million pre-tax environmental charges in 2024 related primarily to a reserve adjustment for the non-active Centredale Superfund site as a result of regulatory changes and revisions to remediation alternatives. |
