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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
NET SALES | $ | 839.4 | $ | 790.9 | $ | 3,285.3 | $ | 2,997.4 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Cost of sales | 550.1 | 500.0 | 2,104.0 | 1,893.8 | ||||||||||||
Selling, general and administrative | 184.9 | 182.4 | 736.8 | 691.3 | ||||||||||||
Interest-net | 9.9 | 9.7 | 33.8 | 34.4 | ||||||||||||
Other-net | 13.8 | 12.2 | 47.9 | 46.0 | ||||||||||||
Restructuring charges | 0.7 | 7.7 | 4.6 | 7.7 | ||||||||||||
759.4 | 712.0 | 2,927.1 | 2,673.2 | |||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||||||||||
BEFORE INCOME TAXES | 80.0 | 78.9 | 358.2 | 324.2 | ||||||||||||
Income taxes | 15.8 | 14.5 | 86.5 | 87.3 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | $ | 64.2 | $ | 64.4 | $ | 271.7 | $ | 236.9 | ||||||||
Earnings (loss) from discontinued operations (including | ||||||||||||||||
gain on disposal of $38.5 million fourth quarter and | ||||||||||||||||
$180.7 million year to date 2004) before income taxes | (3.8 | ) | 42.6 | (1.2 | ) | 200.8 | ||||||||||
Income taxes on discontinued operations | 0.2 | 18.9 | 0.9 | 70.8 | ||||||||||||
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS | (4.0 | ) | 23.7 | (2.1 | ) | 130.0 | ||||||||||
NET EARNINGS | $ | 60.2 | $ | 88.1 | $ | 269.6 | $ | 366.9 | ||||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.76 | $ | 0.78 | $ | 3.26 | $ | 2.89 | ||||||||
Discontinued operations | (0.05 | ) | 0.29 | (0.03 | ) | 1.58 | ||||||||||
Total basic earnings per share of common stock | $ | 0.72 | $ | 1.07 | $ | 3.23 | $ | 4.47 | ||||||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.75 | $ | 0.76 | $ | 3.18 | $ | 2.81 | ||||||||
Discontinued operations | (0.05 | ) | 0.28 | (0.02 | ) | 1.54 | ||||||||||
Total diluted earnings per share of common stock | $ | 0.70 | $ | 1.04 | $ | 3.16 | $ | 4.36 | ||||||||
DIVIDENDS PER SHARE | $ | 0.29 | $ | 0.28 | $ | 1.14 | $ | 1.08 | ||||||||
AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||||||||
Basic | 83,915 | 82,487 | 83,347 | 82,058 | ||||||||||||
Diluted | 85,856 | 85,020 | 85,406 | 84,244 | ||||||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
December 31, 2005 | January 1, 2005 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 657.8 | $ | 250.0 | ||||
Accounts and notes receivable | 609.6 | 575.4 | ||||||
Inventories | 460.7 | 407.3 | ||||||
Other current assets | 75.6 | 82.3 | ||||||
Assets held for sale | 13.3 | 59.9 | ||||||
Total current assets | 1,817.0 | 1,374.9 | ||||||
Property, plant and equipment | 467.1 | 396.2 | ||||||
Goodwill and other intangibles | 1,060.4 | 928.0 | ||||||
Other assets | 191.0 | 168.5 | ||||||
Total assets | $ | 3,535.5 | $ | 2,867.6 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 170.2 | $ | 102.5 | ||||
Accounts payable | 327.7 | 297.9 | ||||||
Accrued expenses | 395.0 | 416.9 | ||||||
Liabilities held for sale | 3.1 | 3.7 | ||||||
Total current liabilities | 896.0 | 821.0 | ||||||
Long-term debt | 895.3 | 481.8 | ||||||
Other long-term liabilities | 309.4 | 328.2 | ||||||
Shareowners’ equity | 1,434.8 | 1,236.6 | ||||||
Total liabilities and equity | $ | 3,535.5 | $ | 2,867.6 | ||||
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THE STANLEY WORKS AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||
Net earnings | $ | 60.2 | $ | 88.1 | $ | 269.6 | $ | 366.9 | ||||||||
Depreciation and amortization | 25.8 | 24.7 | 96.5 | 95.0 | ||||||||||||
Changes in working capital | 90.1 | 40.0 | (23.9 | ) | (7.0 | ) | ||||||||||
Other | (26.1 | ) | (23.2 | ) | 20.1 | (83.4 | ) | |||||||||
Net cash provided by operating activities | 150.0 | 129.6 | 362.3 | 371.5 | ||||||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||||||
Capital and software expenditures | (24.4 | ) | (18.4 | ) | (68.4 | ) | (54.8 | ) | ||||||||
Proceeds (taxes paid) from sale of business | — | 75.4 | (20.6 | ) | 204.9 | |||||||||||
Business acquisitions and asset disposals | (174.5 | ) | (40.7 | ) | (282.9 | ) | (298.2 | ) | ||||||||
Cash dividends on common stock | (24.3 | ) | (24.0 | ) | (94.9 | ) | (89.4 | ) | ||||||||
Other | 392.9 | (128.2 | ) | 512.3 | (88.4 | ) | ||||||||||
Net cash provided by( used in) investing and financing activities | 169.7 | (135.9 | ) | 45.5 | (325.9 | ) | ||||||||||
Increase (decrease) in Cash and Cash Equivalents | 319.7 | (6.3 | ) | 407.8 | 45.6 | |||||||||||
Cash and Cash Equivalents, Beginning of Period | 338.1 | 256.3 | 250.0 | 204.4 | ||||||||||||
Cash and Cash Equivalents, End of Period | $ | 657.8 | $ | 250.0 | $ | 657.8 | $ | 250.0 | ||||||||
Free Cash Flow Computation | ||||||||||||||||
Operating Cash Flow | $ | 150.0 | $ | 129.6 | $ | 362.3 | $ | 371.5 | ||||||||
Less: capital and software expenditures | (24.4 | ) | (18.4 | ) | (68.4 | ) | (54.8 | ) | ||||||||
Free Cash Flow (before dividends) | $ | 125.6 | $ | 111.2 | $ | 293.9 | $ | 316.7 | ||||||||
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)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||
2005 | 2004 | 2005 | 2004 | |||||||||||||
NET SALES | ||||||||||||||||
Consumer Products | $ | 289.5 | $ | 288.6 | $ | 1,097.8 | $ | 1,042.7 | ||||||||
Industrial Tools | 339.4 | 331.6 | 1,369.5 | 1,292.5 | ||||||||||||
Security Solutions | 210.5 | 170.7 | 818.0 | 662.2 | ||||||||||||
Total | $ | 839.4 | $ | 790.9 | $ | 3,285.3 | $ | 2,997.4 | ||||||||
OPERATING PROFIT | ||||||||||||||||
Consumer Products | $ | 45.2 | $ | 48.0 | $ | 185.2 | $ | 171.4 | ||||||||
Industrial Tools | 30.9 | 35.1 | 135.5 | 133.1 | ||||||||||||
Security Solutions | 28.3 | 25.4 | 123.8 | 107.8 | ||||||||||||
Total | $ | 104.4 | $ | 108.5 | $ | 444.5 | $ | 412.3 | ||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
2006 SALES GROWTH
(Unaudited, Millions of Dollars)
2006 Earnings Outlook: | ||||||||||||||||||||||||
Total Year | Split By Quarter | |||||||||||||||||||||||
Sales Growth: | 2006 | Q1 | Q2 | Q3 | Q4 | |||||||||||||||||||
Consumer Products | 2-3 | % | (1-2 | %) | 4-6 | % | 2-4 | % | 3-4 | % | ||||||||||||||
Industrial Tools | 1-2 | % | (0-1 | %) | 2-3 | % | 2-3 | % | 1-2 | % | ||||||||||||||
Security Solutions | 3-4 | % | 2-3 | % | 4-5 | % | 4-5 | % | 2-3 | % | ||||||||||||||
Core Organic: | 2-4 | % | ~1 | % | ~4 | % | ~4 | % | ~3 | % | ||||||||||||||
Facom Tools | $ | 450M | 27 | % | 25 | % | 22 | % | 26 | % | ||||||||||||||
National Hardware | $ | 185M | 24 | % | 27 | % | 25 | % | 24 | % | ||||||||||||||
06 Acquisitions | $ | 100M | 0 | % | 0 | % | 50 | % | 50 | % | ||||||||||||||
+24% -26 | % |
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