THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, Millions of Dollars Except Per Share Amounts)
FIRST QUARTER
2006
2005
NET SALES
$
968.7
$
796.3
COSTS AND EXPENSES
Cost of sales
636.8
509.3
Selling, general and administrative
238.8
184.4
Interest-net
15.6
7.6
Other-net
19.3
9.5
Restructuring charges
7.3
—
917.8
710.8
EARNINGS FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES
50.9
85.5
Income taxes
12.4
19.7
NET EARNINGS FROM CONTINUING OPERATIONS
$
38.5
$
65.8
Earnings (loss) from discontinued operations (including loss
on disposal of $1.5 million in 2006) before income taxes
(1.0
)
0.9
Income taxes (benefit) on discontinued operations
(0.2
)
0.1
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS
(0.8
)
0.8
NET EARNINGS
$
37.7
$
66.6
BASIC EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$
0.46
$
0.79
Discontinued operations
(0.01
)
0.01
Total basic earnings per share of common stock
$
0.46
$
0.80
DILUTED EARNINGS (LOSS) PER SHARE OF COMMON STOCK
Continuing operations
$
0.45
$
0.77
Discontinued operations
(0.01
)
0.01
Total diluted earnings per share of common stock
$
0.45
$
0.78
DIVIDENDS PER SHARE
$
0.29
$
0.28
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
82,892
82,822
Diluted
84,804
85,156
1
-Page 9-
THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars)
April 1, 2006
December 31, 2005
ASSETS
Cash and cash equivalents
$
204.9
$
657.8
Accounts and notes receivable
782.4
609.6
Inventories
548.5
460.7
Other current assets
90.5
84.2
Assets held for sale
3.4
13.3
Total current assets
1,629.7
1,825.6
Property, plant and equipment
491.4
467.1
Goodwill and other intangibles
1,482.0
1,060.4
Other assets
184.5
192.0
Total assets
$
3,787.6
$
3,545.1
LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term borrowings
$
400.7
$
170.2
Accounts payable
411.0
327.7
Accrued expenses
464.5
374.3
Liabilities held for sale
—
3.1
Total current liabilities
1,276.2
875.3
Long-term debt
821.3
895.3
Other long-term liabilities
363.1
329.6
Shareowners’ equity
1,327.0
1,444.9
Total liabilities and equity
$
3,787.6
$
3,545.1
2
-Page 10-
THE STANLEY WORKS AND SUBSIDIARIES SUMMARY OF CASH FLOW ACTIVITY (Unaudited, Millions of Dollars)
FIRST QUARTER
2006
2005
OPERATING ACTIVITIES
Net earnings
$
37.7
$
66.6
Depreciation and amortization
30.3
23.4
Changes in working capital
9.6
(21.2
)
Other
7.6
(8.2
)
Net cash provided by operating activities
85.2
60.6
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(14.5
)
(10.5
)
Proceeds (taxes paid) from sale of business
0.9
(10.6
)
Business acquisitions and asset disposals
(490.6
)
(59.7
)
Cash dividends on common stock
(23.8
)
(23.2
)
Other
(10.1
)
103.9
Net cash used in investing and financing activities
(538.1
)
(0.1
)
Increase(decrease) in Cash and Cash Equivalents
(452.9
)
60.5
Cash and Cash Equivalents, Beginning of Period
657.8
250.0
Cash and Cash Equivalents, End of Period
$
204.9
$
310.5
Free Cash Flow Computation
Operating Cash Flow
$
85.2
$
60.6
Less: capital and software expenditures
(14.5
)
(10.5
)
Free Cash Flow (before dividends)
$
70.7
$
50.1
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.
3
-Page 11-
THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars)
FIRST QUARTER
2006
2005
NET SALES
Consumer Products
$
309.8
$
257.2
Industrial Tools
451.0
349.3
Security Solutions
207.9
189.8
Total
$
968.7
$
796.3
OPERATING PROFIT
Consumer Products
$
37.3
$
41.0
Industrial Tools
28.7
36.8
Security Solutions
27.1
24.8
Total
$
93.1
$
102.6
4
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