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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
NET SALES | $ | 824.0 | $ | 753.9 | $ | 1,630.3 | $ | 1,488.7 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Cost of sales | 521.8 | 480.8 | 1,039.2 | 947.7 | ||||||||||||
Selling, general and administrative | 189.1 | 171.3 | 374.3 | 338.0 | ||||||||||||
Interest-net | 8.1 | 8.4 | 15.7 | 16.3 | ||||||||||||
Other-net | 12.0 | 10.5 | 21.5 | 24.4 | ||||||||||||
Restructuring charges | 1.6 | — | 1.6 | — | ||||||||||||
732.6 | 671.0 | 1,452.3 | 1,326.4 | |||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||||||||||
BEFORE INCOME TAXES | 91.4 | 82.9 | 178.0 | 162.3 | ||||||||||||
Income taxes | 25.4 | 24.1 | 45.3 | 48.5 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | $ | 66.0 | $ | 58.8 | $ | 132.7 | $ | 113.8 | ||||||||
Earnings from discontinued operations (including gain | ||||||||||||||||
on disposal of $142.7 million in 2004) before income taxes | 0.2 | 3.6 | 0.1 | 151.5 | ||||||||||||
Income taxes on discontinued operations | 0.3 | 1.0 | 0.3 | 50.4 | ||||||||||||
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS | (0.1 | ) | 2.6 | (0.2 | ) | 101.1 | ||||||||||
NET EARNINGS | $ | 65.9 | $ | 61.4 | $ | 132.5 | $ | 214.9 | ||||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.79 | $ | 0.72 | $ | 1.60 | $ | 1.39 | ||||||||
Discontinued operations | — | 0.03 | — | 1.24 | ||||||||||||
Total basic earnings per share of common stock | $ | 0.79 | $ | 0.75 | $ | 1.60 | $ | 2.63 | ||||||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.78 | $ | 0.70 | $ | 1.56 | $ | 1.36 | ||||||||
Discontinued operations | — | 0.03 | — | 1.21 | ||||||||||||
Total diluted earnings per share of common stock | $ | 0.78 | $ | 0.73 | $ | 1.56 | $ | 2.57 | ||||||||
DIVIDENDS PER SHARE | $ | 0.28 | $ | 0.26 | $ | 0.56 | $ | 0.52 | ||||||||
AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||||||||
Basic | 83,020 | 81,940 | 82,919 | 81,777 | ||||||||||||
Diluted | 84,983 | 84,112 | 85,076 | 83,763 | ||||||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
JULY 2, 2005 | JANUARY 1, 2005 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 325.6 | $ | 250.0 | ||||
Accounts receivable | 622.3 | 582.0 | ||||||
Inventories | 443.0 | 413.4 | ||||||
Other current assets | 75.7 | 82.2 | ||||||
Assets held for sale | 0.7 | 44.3 | ||||||
Total current assets | 1,467.3 | 1,371.9 | ||||||
Property, plant and equipment | 394.6 | 398.9 | ||||||
Goodwill and other intangibles | 989.3 | 928.2 | ||||||
Other assets | 152.4 | 151.6 | ||||||
Total assets | $ | 3,003.6 | $ | 2,850.6 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 246.2 | $ | 102.5 | ||||
Accounts payable | 308.4 | 300.4 | ||||||
Accrued expenses | 378.2 | 415.9 | ||||||
Total current liabilities | 932.8 | 818.8 | ||||||
Long-term debt | 468.1 | 481.8 | ||||||
Other long-term liabilities | 310.2 | 328.7 | ||||||
Shareowners’ equity | 1,292.5 | 1,221.3 | ||||||
Total liabilities and equity | $ | 3,003.6 | $ | 2,850.6 | ||||
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THE STANLEY WORKS AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net earnings | $ | 65.9 | $ | 61.4 | $ | 132.5 | $ | 214.9 | ||||||||
Depreciation and amortization | 23.9 | 22.7 | 47.3 | 47.1 | ||||||||||||
Reclassify taxes paid (proceeds) from sale of businesses | ||||||||||||||||
to investing activities | 8.1 | 21.9 | 18.7 | (140.0 | ) | |||||||||||
Changes in working capital | (4.2 | ) | 2.9 | (68.8 | ) | (13.0 | ) | |||||||||
Other | (16.6 | ) | (18.0 | ) | 8.0 | 34.0 | ||||||||||
Net cash provided by operating activities | 77.1 | 90.9 | 137.7 | 143.0 | ||||||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||||||
Capital and software expenditures | (16.5 | ) | (12.9 | ) | (27.0 | ) | (21.1 | ) | ||||||||
Proceeds (taxes paid) from sale of business | (8.1 | ) | (21.9 | ) | (18.7 | ) | 140.0 | |||||||||
Business acquisitions and asset disposals | (46.4 | ) | (4.2 | ) | (106.1 | ) | (254.3 | ) | ||||||||
Cash dividends on common stock | (23.2 | ) | (21.2 | ) | (46.4 | ) | (42.4 | ) | ||||||||
Other | 32.2 | 12.5 | 136.1 | 66.1 | ||||||||||||
Net cash used in investing and financing activities | (62.0 | ) | (47.7 | ) | (62.1 | ) | (111.7 | ) | ||||||||
Increase in Cash and Cash Equivalents | 15.1 | 43.2 | 75.6 | 31.3 | ||||||||||||
Cash and Cash Equivalents, Beginning of Period | 310.5 | 192.5 | 250.0 | 204.4 | ||||||||||||
Cash and Cash Equivalents, End of Period | $ | 325.6 | $ | 235.7 | $ | 325.6 | $ | 235.7 | ||||||||
Free Cash Flow Computation | ||||||||||||||||
Operating cash flow | $ | 77.1 | $ | 90.9 | $ | 137.7 | $ | 143.0 | ||||||||
Less: capital and software expenditures | (16.5 | ) | (12.9 | ) | (27.0 | ) | (21.1 | ) | ||||||||
Free cash flow (before dividends) | $ | 60.6 | $ | 78.0 | $ | 110.7 | $ | 121.9 | ||||||||
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.
The change in working capital is comprised of accounts receivable, inventory and accounts payable.
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THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
SECOND QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
NET SALES | ||||||||||||||||
Consumer Products | $ | 266.9 | $ | 257.7 | $ | 530.3 | $ | 520.0 | ||||||||
Industrial Tools | 348.2 | 321.4 | 697.5 | 637.4 | ||||||||||||
Security Solutions | 208.9 | 174.8 | 402.5 | 331.3 | ||||||||||||
Total | $ | 824.0 | $ | 753.9 | $ | 1,630.3 | $ | 1,488.7 | ||||||||
OPERATING PROFIT | ||||||||||||||||
Consumer Products | $ | 42.6 | $ | 39.4 | $ | 84.4 | $ | 84.4 | ||||||||
Industrial Tools | 38.0 | 35.5 | 74.7 | 64.1 | ||||||||||||
Security Solutions | 32.5 | 26.9 | 57.7 | 54.5 | ||||||||||||
Total | $ | 113.1 | $ | 101.8 | $ | 216.8 | $ | 203.0 | ||||||||
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