THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, Millions of Dollars Except Per Share Amounts)
FIRST QUARTER
2009
2008
NET SALES
$
913.0
$
1,071.0
COSTS AND EXPENSES
Cost of sales
551.9
665.1
Gross margin
361.1
405.9
% to Net sales
39.6
%
37.9
%
Selling, general and administrative
252.7
274.6
% to Net sales
27.7
%
25.6
%
Operating margin
108.4
131.3
% to Net sales
11.9
%
12.3
%
Other-net
30.3
20.1
Restructuring charges and asset impairments
9.1
3.2
Income from operations
69.0
108.0
Interest-net
16.3
20.9
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
52.7
87.1
Income taxes
13.7
22.8
NET EARNINGS FROM CONTINUING OPERATIONS
39.0
64.3
Less: net earnings attributable to noncontrolling interests
0.7
0.2
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS
38.3
64.1
Net(loss) earnings from discontinued operations before income taxes
(1.1
)
3.8
Income taxes (benefit) on discontinued operations
(0.5
)
1.4
NET (LOSS) EARNINGS FROM DISCONTINUED OPERATIONS
(0.6
)
2.4
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREOWNERS
$
37.7
$
66.5
BASIC EARNINGS PER SHARE OF COMMON STOCK
Continuing operations
$
0.48
$
0.81
Discontinued operations
(0.01
)
0.03
Total basic earnings per share of common stock
$
0.48
$
0.84
DILUTED EARNINGS PER SHARE OF COMMON STOCK
��
Continuing operations
$
0.48
$
0.80
Discontinued operations
(0.01
)
0.03
Total diluted earnings per share of common stock
$
0.47
$
0.83
DIVIDENDS PER SHARE
$
0.32
$
0.31
AVERAGE SHARES OUTSTANDING (in thousands)
Basic
79,209
79,176
Diluted
79,471
80,404
1
-Page 8-
THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars)
April 4, 2009
January 3, 2009
ASSETS
Cash and cash equivalents
$
128.0
$
211.6
Accounts and notes receivable
659.1
677.7
Inventories
503.7
514.7
Other current assets
100.3
90.1
Total current assets
1,391.1
1,494.1
Property, plant and equipment, net
566.1
579.8
Goodwill and other intangibles, net
2,570.1
2,596.0
Other assets
196.4
195.6
Total assets
$
4,723.7
$
4,865.5
LIABILITIES AND SHAREOWNERS’ EQUITY
Short-term borrowings
$
215.1
$
227.6
Accounts payable
400.8
461.5
Accrued expenses
482.2
507.9
Total current liabilities
1,098.1
1,197.0
Long-term debt
1,385.4
1,383.8
Other long-term liabilities
534.4
560.3
The Stanley Works’ shareowners’ equity
1,687.0
1,706.3
Noncontrolling interests equity
18.8
18.1
Total liabilities and equity
$
4,723.7
$
4,865.5
2
-Page 9-
THE STANLEY WORKS AND SUBSIDIARIES SUMMARY OF CASH FLOW ACTIVITY (Unaudited, Millions of Dollars)
FIRST QUARTER
2009
2008
OPERATING ACTIVITIES
Net earnings attributable to common shareowners
$
37.7
$
66.5
Depreciation and amortization
48.0
40.8
Changes in working capital
(45.3
)
(8.1
)
Other
(36.8
)
8.5
Net cash provided by operating activities
3.6
107.7
INVESTING AND FINANCING ACTIVITIES
Capital and software expenditures
(21.7
)
(25.1
)
Business acquisitions and asset disposals
(6.0
)
(0.5
)
Cash dividends on common stock
(25.3
)
(24.3
)
Other
(34.2
)
26.6
Net cash used in investing and financing activities
(87.2
)
(23.3
)
Increase (decrease) in Cash and Cash Equivalents
(83.6
)
84.4
Cash and Cash Equivalents, Beginning of Period
211.6
240.4
Cash and Cash Equivalents, End of Period
$
128.0
$
324.8
Free Cash Flow Computation
Operating cash flow
$
3.6
$
107.7
Less: capital and software expenditures
(21.7
)
(25.1
)
Free Cash Flow (before dividends)
$
(18.1
)
$
82.6
Free cash flow is defined as cash flow from operations less capital and capitalized software expenditures. The Company believes this is an important measure of its liquidity, of its ability to fund future growth and to provide a return to the shareowners. Free cash flow does not reflect, among other things, deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and acquisitions.
The change in working capital is comprised of accounts receivable, inventory and accounts payable.
3
-Page 10-
THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars)
FIRST QUARTER
2009
2008
NET SALES
Security
$
373.7
$
332.5
Industrial
236.0
332.7
Construction & DIY
303.3
405.8
Total
$
913.0
$
1,071.0
SEGMENT PROFIT
Security
$
70.6
$
53.3
Industrial
24.5
48.7
Construction & DIY
28.8
47.0
Segment Profit
123.9
149.0
Corporate Overhead
(15.5
)
(17.7
)
Total
$
108.4
$
131.3
Segment Profit as a Percentage of Net Sales
Security
18.9
%
16.0
%
Industrial
10.4
%
14.6
%
Construction & DIY
9.5
%
11.6
%
Segment Profit
13.6
%
13.9
%
Corporate Overhead
-1.7
%
-1.6
%
Total
11.9
%
12.3
%
4
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