THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, Millions of Dollars Except Per Share Amounts)
Fourth Quarter
Year to Date
2004
2003
2004
2003
NET SALES
$
802.9
$
688.3
$
3,043.4
$
2,530.6
COSTS AND EXPENSES
Cost of sales
509.4
466.4
1,931.1
1,673.0
Selling, general and administrative
183.1
151.8
694.3
615.5
Interest-net
9.8
6.7
34.4
27.9
Other-net
19.8
26.2
54.5
91.6
722.1
651.1
2,714.3
2,408.0
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
80.8
37.2
329.1
122.6
Income taxes
15.6
8.3
88.9
31.7
NET EARNINGS FROM CONTINUING OPERATIONS
$
65.2
$
28.9
$
240.2
$
90.9
Earnings from discontinued operations (including gain
on disposals of $38.5 million on the quarter and of $180.7 million year to date)
40.6
9.4
195.9
28.2
Income taxes on discontinued operations
17.7
3.7
69.2
11.2
NET EARNINGS FROM DISCONTINUED OPERATIONS
22.9
5.7
126.7
17.0
NET EARNINGS
$
88.1
$
34.6
$
366.9
$
107.9
BASIC EARNINGS PER SHARE OF COMMON STOCK
Continuing operations
$
0.79
$
0.35
$
2.93
$
1.08
Discontinued operations
0.28
0.07
1.54
0.20
Total basic earnings per share of common stock
$
1.07
$
0.42
$
4.47
$
1.28
DILUTED EARNINGS PER SHARE OF COMMON STOCK
Continuing operations
$
0.77
$
0.35
$
2.85
$
1.07
Discontinued operations
0.27
0.07
1.50
0.20
Total diluted earnings per share of common stock
$
1.04
$
0.42
$
4.36
$
1.27
DIVIDENDS PER SHARE
$
0.28
$
0.26
$
1.08
$
0.99
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
82,487
81,514
82,058
84,143
Diluted
85,020
82,572
84,244
84,839
* * * * — PAGE 8 — * * * *
1
THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars)
January 1, 2005
January 3, 2004
ASSETS
Cash and cash equivalents
$
250.0
$
204.4
Accounts receivable
595.8
462.8
Inventories
414.3
361.6
Other current assets
102.4
97.0
Assets held for sale
1.4
110.3
Total current assets
1,363.9
1,236.1
Property, plant and equipment
398.9
392.5
Goodwill and other intangibles
924.8
629.2
Other assets
184.8
166.0
Total assets
$
2,872.4
$
2,423.8
LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term borrowings
$
102.5
$
157.7
Accounts payable
301.2
222.2
Accrued expenses
436.0
314.3
Liabilities held for sale
—
62.5
Total current liabilities
839.7
756.7
Long-term debt
481.8
534.5
Other long-term liabilities
340.1
274.0
Shareowners’ equity
1,210.8
858.6
Total liabilities and shareowners’ equity
$
2,872.4
$
2,423.8
* * * * — PAGE 9 — * * * *
2
THE STANLEY WORKS AND SUBSIDIARIES SUMMARY OF CASH FLOW ACTIVITY (Unaudited, Millions of Dollars)
Fourth Quarter
Year to Date
2004
2003
2004
2003
OPERATING ACTIVITIES
Net earnings
$
88.1
$
34.6
$
366.9
$
107.9
Depreciation and amortization
24.7
21.0
95.0
86.5
Reclassify net proceeds from sale of businesses to
investing activities
(75.4
)
—
(204.9
)
—
Changes in working capital and other
91.0
142.1
114.5
269.9
Net cash provided by operating activities
128.4
197.7
371.5
464.3
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(18.4
)
(11.7
)
(54.8
)
(39.4
)
Proceeds (taxes paid) from sale of businesses
75.4
—
204.9
—
Business acquisitions
(43.2
)
(1.4
)
(301.2
)
(22.3
)
Cash dividends on common stock
(22.8
)
(21.1
)
(89.4
)
(86.1
)
Other
(125.7
)
(128.7
)
(85.4
)
(233.8
)
Net cash used in investing and financing activities
(134.7
)
(162.9
)
(325.9
)
(381.6
)
Increase(Decrease) in Cash and Cash Equivalents
(6.3
)
34.8
45.6
82.7
Cash and Cash Equivalents, Beginning of Period
256.3
169.6
204.4
121.7
Cash and Cash Equivalents, End of Period
$
250.0
$
204.4
$
250.0
$
204.4
Free Cash Flow Computation
Operating Cash Flow
$
128.4
$
197.7
$
371.5
$
464.3
Less: capital and software expenditures
(18.4
)
(11.7
)
(54.8
)
(39.4
)
Free Cash Flow from Operations (before dividends)
$
110.0
$
186.0
$
316.7
$
424.9
Free cash flow is defined as cash flow from operations less capital expenditures; the company believes this is an important measure of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners.
* * * * — PAGE 10 — * * * *
3
THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars)
Fourth Quarter
Year to Date
2004
2003
2004
2003
BUSINESS SEGMENTS
Net Sales
Consumer products
$
296.2
$
275.5
$
1,073.1
$
958.2
Industrial tools
331.7
285.7
1,292.5
1,098.3
Security solutions
175.0
127.1
677.8
474.1
Consolidated
$
802.9
$
688.3
$
3,043.4
$
2,530.6
Operating Profit
Consumer products
$
49.4
$
47.3
$
175.4
$
149.4
Industrial tools
34.1
5.4
131.9
17.0
Security solutions
26.9
17.4
110.7
75.7
Consolidated
$
110.4
$
70.1
$
418.0
$
242.1
* * * * — PAGE 11 — * * * *
4
THE STANLEY WORKS AND SUBSIDIARIES Consolidated Statements of Operations and Business Segment Information Reconciliation to GAAP Earnings Fourth Quarter 2003 (Unaudited, Millions of Dollars Except Per Share Amounts)
2003
(a)
Pro-forma Excludes Charges
Charges
Reported
Net sales
$
688.3
$
—
$
688.3
Cost of sales
453.8
12.6
466.4
Gross Margin
234.5
(12.6
)
221.9
34.1
%
32.2
%
Selling, general & administrative
144.8
7.0
151.8
21.0
%
22.1
%
Subtotal
89.7
(19.6
)
70.1
13.0
%
10.2
%
Interest, net
6.7
—
6.7
Other, net
8.5
17.7
26.2
Earnings from continuing operations before income taxes
74.5
(37.3
)
37.2
Income taxes
20.2
(11.9
)
8.3
27.1
%
22.3
%
Net earnings from continuing operations
$
54.3
$
(25.4
)
$
28.9
Earnings from discontinued operations
9.4
—
9.4
Income taxes on discontinued operations
3.7
—
3.7
Net earnings
$
60.0
$
(25.4
)
$
34.6
Average shares outstanding (diluted, in thousands)
82,572
82,572
82,572
Earnings per share (diluted)
$
0.73
$
(0.31
)
$
0.42
BUSINESS SEGMENTS
Net sales
Consumer products
$
275.5
$
—
$
275.5
Industrial tools
285.7
—
285.7
Security solutions
127.1
—
127.1
Consolidated
$
688.3
$
—
$
688.3
Operating profit (loss)
Consumer products
$
47.4
$
(0.1
)
$
47.3
Industrial tools
24.8
(19.4
)
5.4
Security Solutions
17.5
(0.1
)
17.4
Consolidated
$
89.7
$
(19.6
)
$
70.1
Interest, net
6.7
—
6.7
Other, net
8.5
17.7
26.2
Earnings from continuing operations before income taxes
$
74.5
$
(37.3
)
$
37.2
(a) Includes $37.3 million of pre-tax Operation 15 restructuring costs, asset impairment charges and other exit costs. Aggregate restructuring charges of $17.4 million include the following: $11.5 million attributable to asset impairments, $3.1 million in severance and related benefits for headcount reductions pertaining to Operation 15 initiatives, and $2.5 million other. Cost of sales reflects a $12.6 million inventory charge associated with the planned closure of a U. S. distribution facility. Costs of $7.0 million and $0.6 million related to the Mac Direct retail channel exit and other Operation 15 costs are classified in SG&A and Other, net, respectively.
* * * * — PAGE 12 — * * * *
5
THE STANLEY WORKS AND SUBSIDIARIES Consolidated Statements of Operations and Business Segment Information Reconciliation to GAAP Earnings Year 2003 (Unaudited, Millions of Dollars Except Per Share Amounts)
2003
(a)
Pro-forma Excludes Charges
Charges
Reported
Net sales
$
2,530.6
$
—
$
2,530.6
Cost of sales
1,653.4
19.6
1,673.0
Gross Margin
877.2
(19.6
)
857.6
34.7
%
33.9
%
Selling, general & administrative
578.3
37.2
615.5
22.9
%
24.3
%
Subtotal
298.9
(56.8
)
242.1
11.8
%
9.6
%
Interest, net
27.9
—
27.9
Other, net
29.9
61.7
91.6
Earnings from continuing operations before income taxes
241.1
(118.5
)
122.6
Income taxes
69.6
(37.9
)
31.7
28.9
%
25.9
%
Net earnings from continuing operations
$
171.5
$
(80.6
)
$
90.9
Earnings from discontinued operations
28.2
—
28.2
Income taxes on discontinued operations
11.2
—
11.2
Net earnings
$
188.5
$
(80.6
)
$
107.9
Average shares outstanding (diluted, in thousands)
84,839
84,839
84,839
Earnings per share (diluted)
$
2.22
$
(0.95
)
$
1.27
BUSINESS SEGMENTS
Net sales
Consumer products
$
958.2
$
—
$
958.2
Industrial tools
1,098.3
—
1,098.3
Security solutions
474.1
—
474.1
Consolidated
$
2,530.6
$
—
$
2,530.6
Operating profit (loss)
Consumer products
$
153.0
$
(3.6
)
$
149.4
Industrial tools
68.6
(51.6
)
17.0
Security Solutions
77.3
(1.6
)
75.7
Consolidated
$
298.9
$
(56.8
)
$
242.1
Interest, net
27.9
—
27.9
Other, net
29.9
61.7
91.6
Earnings from continuing operations before income taxes
$
241.1
$
(118.5
)
$
122.6
(a) Includes $118.5 million of pre-tax Operation 15 restructuring costs, asset impairment charges, other exit costs and Chief Executive Officer (CEO) retirement costs. Aggregate charges of $52.7 million arising from the Mac Direct retail channel exit are classified as follows: Cost of sales - $7.0 million; SG&A – 26.1 million; Other, net — $9.5 million; and Restructuring and asset impairment charges — $10.1 million. Cost of sales also reflects a $12.6 million inventory charge related to the planned closure of a U. S. distribution facility. In addition, $7.6 million in compensation and benefit costs associated with the CEO’s announced retirement plans and $3.5 million other are classified in SG&A. Restructuring and asset impairment charges, aside from the $10.1 million for Mac Direct, are comprised of the following: asset impairments of $21.9 million, contract termination charges of $2.8 million, and $17.4 million mainly attributable to severance and related benefits for Operation 15 headcount reduction initiatives.
* * * * — PAGE 13 — * * * *
6
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
