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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 | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
NET SALES | $ | 969.4 | $ | 1,085.9 | $ | 3,737.1 | $ | 4,426.2 | ||||||||
COSTS AND EXPENSES | ||||||||||||||||
Cost of sales | 575.2 | 693.4 | 2,228.8 | 2,754.8 | ||||||||||||
Gross margin | 394.2 | 392.5 | 1,508.3 | 1,671.4 | ||||||||||||
% to Net sales | 40.7 | % | 36.1 | % | 40.4 | % | 37.8 | % | ||||||||
Selling, general and administrative | 269.0 | 275.3 | 1,028.4 | 1,107.6 | ||||||||||||
% to Net sales | 27.7 | % | 25.4 | % | 27.5 | % | 25.0 | % | ||||||||
Operating margin | 125.2 | 117.2 | 479.9 | 563.8 | ||||||||||||
% to Net sales | 12.9 | % | 10.8 | % | 12.8 | % | 12.7 | % | ||||||||
Other-net | 44.0 | 33.7 | 95.3 | 102.2 | ||||||||||||
Restructuring and asset impairments | 15.1 | 60.5 | 40.7 | 85.5 | ||||||||||||
Income from operations | 66.1 | 23.0 | 343.9 | 376.1 | ||||||||||||
Interest-net | 14.0 | 20.9 | 60.6 | 82.9 | ||||||||||||
EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 52.1 | 2.1 | 283.3 | 293.2 | ||||||||||||
Income taxes (benefit) | (2.3 | ) | (2.0 | ) | 55.8 | 72.5 | ||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS | 54.4 | 4.1 | 227.5 | 220.7 | ||||||||||||
Less: net earnings (loss) attributable to noncontrolling interests | (0.2 | ) | 0.5 | 2.0 | 1.7 | |||||||||||
NET EARNINGS FROM CONTINUING OPERATIONS ATTRIBUTABLE TO COMMON SHAREOWNERS | 54.6 | 3.6 | 225.5 | 219.0 | ||||||||||||
Net (loss) earnings from discontinued operations before income taxes | — | (5.8 | ) | (5.8 | ) | 132.8 | ||||||||||
Income taxes (benefit) on discontinued operations | (0.8 | ) | (1.5 | ) | (3.3 | ) | 44.9 | |||||||||
NET EARNINGS (LOSS) FROM DISCONTINUED OPERATIONS | 0.8 | (4.3 | ) | (2.5 | ) | 87.9 | ||||||||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO THE STANLEY WORKS | $ | 55.4 | $ | (0.7 | ) | $ | 223.0 | $ | 306.9 | |||||||
BASIC EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.67 | $ | 0.05 | $ | 2.82 | $ | 2.77 | ||||||||
Discontinued operations | 0.01 | (0.06 | ) | (0.03 | ) | 1.11 | ||||||||||
Total basic earnings (loss) per share of common stock | $ | 0.69 | $ | (0.01 | ) | $ | 2.79 | $ | 3.88 | |||||||
DILUTED EARNINGS PER SHARE OF COMMON STOCK | ||||||||||||||||
Continuing operations | $ | 0.67 | $ | 0.05 | $ | 2.80 | $ | 2.74 | ||||||||
Discontinued operations | 0.01 | (0.06 | ) | (0.03 | ) | 1.10 | ||||||||||
Total diluted earnings (loss) per share of common stock | $ | 0.68 | $ | (0.01 | ) | $ | 2.77 | $ | 3.84 | |||||||
DIVIDENDS PER SHARE | $ | 0.33 | $ | 0.32 | $ | 1.30 | $ | 1.26 | ||||||||
AVERAGE SHARES OUTSTANDING (in thousands) | ||||||||||||||||
Basic | 80,626 | 78,985 | 79,788 | 78,897 | ||||||||||||
Diluted | 81,663 | 79,525 | 80,396 | 79,874 | ||||||||||||
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
(Unaudited) | ||||||||
January 2, 2010 | January 3, 2009 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 400.7 | $ | 211.6 | ||||
Accounts and notes receivable | 532.0 | 677.7 | ||||||
Inventories | 366.2 | 514.7 | ||||||
Other current assets | 117.2 | 94.0 | ||||||
Total current assets | 1,416.1 | 1,498.0 | ||||||
Property, plant and equipment | 575.9 | 579.8 | ||||||
Goodwill and other intangibles | 2,594.8 | 2,596.1 | ||||||
Other assets | 186.0 | 192.7 | ||||||
Total assets | $ | 4,772.8 | $ | 4,866.6 | ||||
LIABILITIES AND SHAREOWNERS’ EQUITY | ||||||||
Short-term borrowings | $ | 298.4 | $ | 227.7 | ||||
Accounts payable | 410.1 | 461.5 | ||||||
Accrued expenses | 483.1 | 504.0 | ||||||
Total current liabilities | 1,191.6 | 1,193.2 | ||||||
Long-term debt | 1,084.7 | 1,383.8 | ||||||
Other long-term liabilities | 486.4 | 564.8 | ||||||
The Stanley Works’ shareowners’ equity | 1,984.8 | 1,706.3 | ||||||
Noncontrolling interests equity | 25.3 | 18.5 | ||||||
Total liabilities and equity | $ | 4,772.8 | $ | 4,866.6 | ||||
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THE STANLEY WORKS AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
FOURTH QUARTER | YEAR TO DATE | |||||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||||
OPERATING ACTIVITIES | ||||||||||||||||||||
Net earnings (loss) | $ | 55.4 | $ | (0.7 | ) | $ | 223.0 | $ | 306.9 | |||||||||||
Depreciation and amortization | 51.3 | 54.5 | 200.1 | 183.0 | ||||||||||||||||
Pretax (gain) loss from sale of businesses | (0.8 | ) | (40.6 | ) | 1.6 | (126.5 | ) | |||||||||||||
Income taxes paid on CST/berger divestiture | — | (11.8 | ) | — | (46.0 | ) | ||||||||||||||
Changes in working capital | 209.2 | 127.4 | 226.0 | 122.7 | ||||||||||||||||
Other | (23.7 | ) | 64.9 | (111.3 | ) | 76.5 | ||||||||||||||
Net cash provided by operating activities | 291.4 | 193.7 | 539.4 | 516.6 | ||||||||||||||||
INVESTING AND FINANCING ACTIVITIES | ||||||||||||||||||||
Capital and software expenditures | (28.2 | ) | (58.9 | ) | (93.4 | ) | (140.8 | ) | ||||||||||||
Net proceeds from sales of businesses | 0.1 | 4.6 | — | 204.6 | ||||||||||||||||
Business acquisitions and asset disposals | (1.8 | ) | (207.5 | ) | (21.8 | ) | (570.7 | ) | ||||||||||||
Proceeds from long-term borrowings | — | 249.5 | — | 249.7 | ||||||||||||||||
Cash dividends on common stock | (26.7 | ) | (25.2 | ) | (103.6 | ) | (99.0 | ) | ||||||||||||
Other | (41.5 | ) | (243.9 | ) | (131.5 | ) | (189.2 | ) | ||||||||||||
Net cash used in investing and financing activities | (98.1 | ) | (281.4 | ) | (350.3 | ) | (545.4 | ) | ||||||||||||
Increase (Decrease) in Cash and Cash Equivalents | 193.3 | (87.7 | ) | 189.1 | (28.8 | ) | ||||||||||||||
Cash and Cash Equivalents, Beginning of Period | 207.4 | 299.3 | 211.6 | 240.4 | ||||||||||||||||
Cash and Cash Equivalents, End of Period | $ | 400.7 | $ | 211.6 | $ | 400.7 | $ | 211.6 | ||||||||||||
Free Cash Flow Computation | ||||||||||||||||||||
Operating cash flow | $ | 291.4 | $ | 193.7 | $ | 539.4 | $ | 516.6 | ||||||||||||
Less: capital and software expenditures | (28.2 | ) | (58.9 | ) | (93.4 | ) | (140.8 | ) | ||||||||||||
Add: Income taxes paid on CST/berger divestiture | — | 11.8 | — | 46.0 | ||||||||||||||||
Free Cash Flow (before dividends) | $ | 263.2 | $ | 146.6 | $ | 446.0 | $ | 421.8 | ||||||||||||
Free cash flow is defined as cash flow from operations less capital and capitalized software expenditures. Management considers free cash flow an important indicator of its liquidity, as well as its ability to fund future growth and to provide a return to the shareowners. In 2008, free cash flow also excludes the income taxes paid on the CST/berger divestiture due to the fact the taxes are non-recurring and the directly related gross cash proceeds are classified in investing cash flows. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items.
The change in working capital is comprised of current 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 | |||||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||||
NET SALES | ||||||||||||||||||
Security | $ | 393.2 | $ | 410.2 | $ | 1,560.2 | $ | 1,497.2 | ||||||||||
Industrial | 235.9 | 304.5 | 881.6 | 1,273.5 | ||||||||||||||
Construction & DIY | 340.3 | 371.2 | 1,295.3 | 1,655.5 | ||||||||||||||
Total | $ | 969.4 | $ | 1,085.9 | $ | 3,737.1 | $ | 4,426.2 | ||||||||||
SEGMENT PROFIT | ||||||||||||||||||
Security | $ | 78.3 | $ | 75.3 | $ | 307.0 | $ | 268.7 | ||||||||||
Industrial | 26.7 | 31.2 | 89.3 | 164.2 | ||||||||||||||
Construction & DIY | 40.4 | 23.6 | 154.1 | 190.7 | ||||||||||||||
Segment Profit | 145.4 | 130.1 | 550.4 | 623.6 | ||||||||||||||
Corporate Overhead | (20.2 | ) | (12.9 | ) | (70.5 | ) | (59.8 | ) | ||||||||||
Total | $ | 125.2 | $ | 117.2 | $ | 479.9 | $ | 563.8 | ||||||||||
Segment Profit as a Percentage of Net Sales | ||||||||||||||||||
Security | 19.9 | % | 18.4 | % | 19.7 | % | 17.9 | % | ||||||||||
Industrial | 11.3 | % | 10.2 | % | 10.1 | % | 12.9 | % | ||||||||||
Construction & DIY | 11.9 | % | 6.4 | % | 11.9 | % | 11.5 | % | ||||||||||
Segment Profit | 15.0 | % | 12.0 | % | 14.7 | % | 14.1 | % | ||||||||||
Corporate Overhead | -2.1 | % | -1.2 | % | -1.9 | % | -1.4 | % | ||||||||||
Total | 12.9 | % | 10.8 | % | 12.8 | % | 12.7 | % | ||||||||||
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