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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 | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
NET SALES | $ | 1,019.3 | $ | 839.4 | $ | 4,018.6 | $ | 3,285.3 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Cost of sales | 647.2 | 550.1 | 2,560.1 | 2,104.0 | ||||||||||||
Selling, general and administrative | 239.9 | 184.9 | 955.2 | 736.8 | ||||||||||||
Interest-net | 15.4 | 9.9 | 64.9 | 33.8 | ||||||||||||
Other-net | 11.9 | 13.8 | 57.5 | 47.9 | ||||||||||||
Restructuring charges | 3.8 | 0.7 | 13.8 | 4.6 | ||||||||||||
918.2 | 759.4 | 3,651.5 | 2,927.1 | |||||||||||||
EARNINGS FROM CONTINUING OPERATIONS | ||||||||||||||||
BEFORE INCOME TAXES | 101.1 | 80.0 | 367.1 | 358.2 | ||||||||||||
Income taxes | 14.1 | 15.8 | 76.4 | 86.5 | ||||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 87.0 | 64.2 | 290.7 | 271.7 | ||||||||||||
Loss from discontinued operations (including loss | ||||||||||||||||
on disposal of $1.5 million in 2006) before income taxes | (0.5 | ) | (3.8 | ) | (1.5 | ) | (1.2 | ) | ||||||||
Income taxes (tax benefit) on discontinued operations | (0.1 | ) | 0.2 | (0.3 | ) | 0.9 | ||||||||||
NET LOSS FROM DISCONTINUED OPERATIONS | (0.4 | ) | (4.0 | ) | (1.2 | ) | (2.1 | ) | ||||||||
NET EARNINGS | $ | 86.6 | $ | 60.2 | $ | 289.5 | $ | 269.6 | ||||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 1.06 | $ | 0.76 | $ | 3.55 | $ | 3.26 | ||||||||
Discontinued operations | (0.01 | ) | (0.05 | ) | (0.01 | ) | (0.03 | ) | ||||||||
Total basic earnings per share of common stock | $ | 1.06 | $ | 0.72 | $ | 3.54 | $ | 3.23 | ||||||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 1.04 | $ | 0.75 | $ | 3.47 | $ | 3.18 | ||||||||
Discontinued operations | (0.01 | ) | (0.05 | ) | (0.01 | ) | (0.02 | ) | ||||||||
Total diluted earnings per share of common stock | $ | 1.03 | $ | 0.70 | $ | 3.46 | $ | 3.16 | ||||||||
DIVIDENDS PER SHARE | $ | 0.30 | $ | 0.29 | $ | 1.18 | $ | 1.14 | ||||||||
AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||||||||
Basic | 81,796 | 83,915 | 81,866 | 83,347 | ||||||||||||
Diluted | 83,691 | 85,856 | 83,704 | 85,406 | ||||||||||||
AGM | $ | 372.1 | $ | 289.3 | $ | 1,458.5 | $ | 1,181.3 | ||||||||
% of Net Sales | 36.5 | % | 34.5 | % | 36.3 | % | 36.0 | % | ||||||||
SG&A % of Net Sales | 23.5 | % | 22.0 | % | 23.8 | % | 22.4 | % | ||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
December 30, 2006 | December 31, 2005 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 176.6 | $ | 657.8 | ||||
Accounts and notes receivable | 749.6 | 609.6 | ||||||
Inventories | 598.9 | 460.7 | ||||||
Other current assets | 81.1 | 84.2 | ||||||
Assets held for sale | 28.4 | 13.3 | ||||||
Total current assets | 1,634.6 | 1,825.6 | ||||||
Property, plant and equipment | 555.2 | 467.1 | ||||||
Goodwill and other intangibles | 1,629.5 | 1,060.4 | ||||||
Other assets | 131.0 | 192.0 | ||||||
Total assets | $ | 3,950.3 | $ | 3,545.1 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 320.0 | $ | 170.2 | ||||
Accounts payable | 445.2 | 327.7 | ||||||
Accrued expenses | 486.9 | 374.3 | ||||||
Liabilities held for sale | — | 3.1 | ||||||
Total current liabilities | 1,252.1 | 875.3 | ||||||
Long-term debt | 679.2 | 895.3 | ||||||
Other long-term liabilities | 472.3 | 329.6 | ||||||
Shareowners’ equity | 1,546.7 | 1,444.9 | ||||||
Total liabilities and equity | $ | 3,950.3 | $ | 3,545.1 | ||||
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THE STANLEY WORKS AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||||||
Net earnings | $ | 86.6 | $ | 60.2 | $ | 289.5 | $ | 269.6 | ||||||||||||
Depreciation and amortization | 29.9 | 25.8 | 121.2 | 96.5 | ||||||||||||||||
Changes in working capital | 55.2 | 82.6 | 28.7 | 1.2 | ||||||||||||||||
Other | (52.4 | ) | (18.6 | ) | (0.3 | ) | (5.0 | ) | ||||||||||||
Net cash provided by operating activities | 119.3 | 150.0 | 439.1 | 362.3 | ||||||||||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||||||||||
Capital and software expenditures | (20.7 | ) | (24.4 | ) | (80.5 | ) | (68.4 | ) | ||||||||||||
Proceeds (taxes paid) from sale of business | — | — | 0.9 | (20.6 | ) | |||||||||||||||
Business acquisitions and asset disposals | 0.3 | (174.5 | ) | (539.9 | ) | (282.9 | ) | |||||||||||||
Cash dividends on common stock | (24.5 | ) | (24.3 | ) | (96.1 | ) | (94.9 | ) | ||||||||||||
Other | (139.1 | ) | 392.9 | (204.7 | ) | 512.3 | ||||||||||||||
Net cash used in investing and financing activities | (184.0 | ) | 169.7 | (920.3 | ) | 45.5 | ||||||||||||||
Increase(Decrease) in Cash and Cash Equivalents | (64.7 | ) | 319.7 | (481.2 | ) | 407.8 | ||||||||||||||
Cash and Cash Equivalents, Beginning of Period | 241.3 | 338.1 | 657.8 | 250.0 | ||||||||||||||||
Cash and Cash Equivalents, End of Period | $ | 176.6 | $ | 657.8 | $ | 176.6 | $ | 657.8 | ||||||||||||
Free Cash Flow Computation | ||||||||||||||||||||
Operating Cash Flow | $ | 119.3 | $ | 150.0 | $ | 439.1 | $ | 362.3 | ||||||||||||
Less: capital and software expenditures | (20.7 | ) | (24.4 | ) | (80.5 | ) | (68.4 | ) | ||||||||||||
Free Cash Flow (before dividends) | $ | 98.6 | $ | 125.6 | $ | 358.6 | $ | 293.9 | ||||||||||||
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)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||||
NET SALES | ||||||||||||||||||||
Consumer Products | $ | 339.1 | $ | 289.5 | $ | 1,328.5 | $ | 1,097.8 | ||||||||||||
Industrial Tools | 456.5 | 339.4 | 1,802.9 | 1,369.5 | ||||||||||||||||
Security Solutions | 223.7 | 210.5 | 887.2 | 818.0 | ||||||||||||||||
Total | $ | 1,019.3 | $ | 839.4 | $ | 4,018.6 | $ | 3,285.3 | ||||||||||||
OPERATING PROFIT | ||||||||||||||||||||
Consumer Products | $ | 58.3 | $ | 45.2 | $ | 210.3 | $ | 185.2 | ||||||||||||
Industrial Tools | 43.5 | 30.9 | 159.1 | 135.5 | ||||||||||||||||
Security Solutions | 30.4 | 28.3 | 133.9 | 123.8 | ||||||||||||||||
Total | $ | 132.2 | $ | 104.4 | $ | 503.3 | $ | 444.5 | ||||||||||||
OPERATING PROFIT % OF NET SALES | ||||||||||||||||||||
Consumer Products | 17.2 | % | 15.6 | % | 15.8 | % | 16.9 | % | ||||||||||||
Industrial Tools | 9.5 | % | 9.1 | % | 8.8 | % | 9.9 | % | ||||||||||||
Security Solutions | 13.6 | % | 13.4 | % | 15.1 | % | 15.1 | % | ||||||||||||
Total | 13.0 | % | 12.4 | % | 12.5 | % | 13.5 | % | ||||||||||||
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