Stanley Black & Decker Reports 3Q 2013 Results

  Stanley Black & Decker Reports 3Q 2013 Results

Business Wire

NEW BRITAIN, Conn. -- October 16, 2013

Stanley Black & Decker (NYSE: SWK) today announced third quarter 2013
financial results.

  *3Q’13 Revenues Increased 10% To $2.8 Billion; Organic Growth 4%
  *Organic Growth Initiatives Continue To Gain Traction Driving One-Half Of
    The Organic Growth (2 Points)
  *3Q’13 Diluted GAAP EPS Was $1.07; Excluding Charges, 3Q’13 Diluted EPS Was
    $1.39
  *2013 FY EPS Guidance Range, Excluding Charges, Revised To $4.90 - $5.00
    ($3.75 - $3.95 On A GAAP Basis) From $5.40 - $5.65 as a result of slower
    margin rate recovery within the Security segment, weakening emerging
    markets and the impact of the U.S. government shutdown on organic growth
  *Free Cash Flow Excluding Charges And Payments Revised To Approximately
    $800 Million Vs. Prior Estimate Of Approximately $1 Billion

3Q’13 Key Points:

  *Net sales for the period were $2.8 billion, up 10% versus the prior year,
    attributable to volume (+5%) and acquisitions (+7%), partially offset by
    price (-1%) and currency (-1%).
  *The gross margin rate for the quarter was 35.8%. Excluding charges, the
    gross margin rate was 36.0%, down from the prior year rate of 36.7%, as
    the favorable impact of volume and  cost synergies was more than offset by
    Security margins.
  *SG&A expenses were 24.3% of sales. Excluding charges, SG&A expenses were
    23.1% of sales, compared to a 3Q’12 level of 22.7%, primarily reflecting
    investments in organic growth initiatives.

  *Operating margin was 11.5% of sales. Excluding charges, operating margin
    was 12.9% of sales, down 110 basis points from the 3Q’12 operating margin
    of 14.0%.
  *The tax rate was 9.2%. Excluding charges, the tax rate was 13.1%,
    reflecting the realization of certain tax credits and the higher level of
    earnings in lower-taxed foreign jurisdictions.

  *Diluted GAAP EPS was $1.07. Excluding charges, 3Q’13 diluted EPS was
    $1.39.

Stanley Black & Decker’s Chairman and CEO, John F. Lundgren, commented, “We
continue to make significant progress driving organic growth throughout the
organization. Our focused organic growth initiatives have resulted in a strong
third quarter performance and maintained the momentum we achieved in the
second quarter.

“Growth was robust across the portfolio with our CDIY and Industrial segments
posting another strong organic growth quarter, and with the exception of
Europe, Security also achieved solid, mid-single digit organic growth. Within
Security, we are gaining further traction with our verticals initiative based
on recent order activity and are encouraged by the sequential growth and
margin improvements in this segment during the quarter. However, the
achievement of high teen margins, which we believe represent the appropriate
level given the characteristics of this business, is taking longer than
anticipated.

“Progress from our organic growth initiatives combined with the overall
strength and diversity of our portfolio and underlying strategic framework
position us well to deliver on our previously stated long-term financial
objectives.”

3Q’13 Segment Results

            
($ in M)     3Q' 13 Segment Results
                                                   Profit           Profit     Profit Rate
            Sales    Profit   Charges^1                  Rate    
                                                   Ex-Charges^1                Ex-Charges^1
                                                             
CDIY         $1,388   $203.9   $3.1        $207.0         14.7%    14.9%
                                                             
Industrial   $771     $109.2   $2.3        $111.5         14.2%    14.5%
                                                             
Security     $600     $61.4    $11.9       $73.3          10.2%    12.2%
^1 M&A charges primarily pertaining to synergy attainment & facility closures


  *In the CDIY segment, net sales increased 5% vs. 3Q’12 as a result of
    volume (+6%) and acquisitions (+1%), partially offset by price (-1%) and
    currency (-1%). Similar to the prior quarter, strong organic volumes were
    achieved in North America, primarily driven by new product introductions,
    retail promotions and continued strength in the residential construction
    market, as well as within the emerging markets which grew 10%. While the
    emerging markets continue to be a source of strength, current
    macroeconomic conditions have caused growth rates to decelerate somewhat.
    European volumes were solid; up 3% organically, with growth in all
    regions. In particular, the UK performed well reflecting share gains in
    the face of continued soft economic conditions. Excluding charges, overall
    segment profit was 14.9%, relatively consistent with the 2Q’13 rate but
    down from the 3Q’12 rate of 15.5% as investments in organic growth
    initiatives and currency pressures offset volume and productivity.
  *Net sales in the Industrial segment rose 25%. Unit volumes increased
    approximately 4%, currency was down 1% and acquisitions added 22%. Pricing
    was flat for the quarter. Oil & Gas posted another strong quarter of
    impressive organic growth (+32%) driven primarily by continued strength
    within its North American onshore operations. Organic sales for Industrial
    and Automotive Repair (IAR) increased 2% primarily as a result of volume
    increases in North America and the emerging markets. Similar to CDIY,
    although strong, IAR’s emerging markets growth fell short of expectations
    due to the weakening of these markets. Consistent with the prior quarter,
    volume growth in North America was driven by the MRO vending growth
    initiative as well as strength within Mac Tools mobile distribution, which
    more than offset the impact of spending cuts on IAR’s US Government
    business and the results of IAR’s European operations. Engineered
    Fastening organic growth was relatively flat in the face of a difficult
    equipment sales comparison, even as organic fastener volume was up 6%. The
    integration of Infastech continues to progress as planned and is on track
    to deliver its planned synergies.

    Overall Industrial segment profit excluding charges was 14.5% down from
    the 3Q’12 rate of 15.4% due primarily to investments in organic growth
    initiatives and the mix impact of Infastech’s modestly below line average
    margins.

  *Net sales in Security increased 3% versus 3Q’12 due to pricing (+1%)
    acquisitions (+1%) and currency (+1%). Volume was relatively flat. Organic
    growth within the CSS North America business was up an encouraging 6%
    driven by higher installation and service volumes supported by early
    successes with the vertical markets organic growth initiative. CSS Europe
    declined 4% organically due primarily to continued softness in various
    regions, most notably France and the Nordics.

    Mechanical Access organic sales were up 4% driven by strong growth within
    the automatic door business due to successful door conversion wins and new
    product introductions. The commercial mechanical lock business also
    experienced growth during the quarter driven by gains in emerging markets.

    Security segment profit rate excluding charges was 12.2%, up 170 basis
    points from the 2Q’13 rate and 380 basis points lower than the 3Q’12 rate.
    The sequential improvement in the rate is primarily attributable to North
    America volume improvements due in part to organic growth investments, the
    elimination of costs associated with the commercial lock business model
    shift, and progress relating to field technician productivity. As
    previously communicated, the year over year decline in the rate resulted
    from field technician costs required to install and service the growing
    second half North American backlog, investments in organic growth
    initiatives, European volume declines and temporary negative rate pressure
    in the commercial lock business due to the business model shift.

President and Chief Operating Officer, James M. Loree, commented, “While the
slower macro backdrop has created some challenges as global economic growth
rates have notched downward, we are encouraged by the fact that most of our
businesses continue to post solid organic performances aided by our
substantial growth investments. As we move into 2014 we are entering the
period in which these investments will become accretive to operating margin.

“As for Security, notable progress was made during the quarter outside of
Europe on both organic growth (+4%) and operating margin rate (~15%) and we
expect to see continued progress in 2014. European Security made less tangible
progress on organic growth (down 4%) and rate (~7%); however, its management
team made significant underlying headway on talent upgrades and basic business
model fixes that will bear fruit as we enter 2014. Substantial improvements
have been made in both North America and Europe with the latter being
manifested about six months behind our expectations. Therefore, we fully
expect Security to regain its appropriate position as a revenue and earnings
growth driver in 2014 and beyond.”

Revision Of 2013 Outlook

As a result of a slower than expected margin rate recovery within our Security
operations as well as overall lower than previously anticipated organic growth
related to macro issues affecting emerging markets and the U.S. government
budget impasse, the Company is revising its outlook for full year 2013 EPS and
free cash flow to approximately $4.90 - $5.00 per share and $800 million,
respectively, excluding charges and payments, based on the following:

  *Approximately half of the full year EPS outlook reduction relates to the
    aforementioned slower than expected pace of the Security margin
    improvement.
  *The balance of the reduction relates to lower organic growth expectations
    within our CDIY and Industrial segments. This is primarily attributable to
    growth pressure within the emerging markets due to the current volatile
    macroeconomic environment, and the uncertainty created by the U.S.
    government’s sequestration and shut-down, and its impact on business,
    consumer confidence and spending levels.
  *Partially offsetting these items will be a lower tax rate of ~20% versus
    our prior estimated tax rate of ~23%.
  *These factors combined with lower than expected working capital
    performance create a reduction to our free cash flow estimate for the
    year.
  *FY’13 organic growth is now expected to approximate 3% versus the prior
    expectation range of 4%-5%.
  *All other assumptions remain unchanged from our prior guidance

Including all charges, the Company expects GAAP EPS to be in the range of
$3.75 - $3.95 in 2013. For the full year of 2013 the Company estimates
one-time pre-tax charges to be approximately $225 - $250 million.

Donald Allan Jr., Senior Vice President and CFO commented, “As the year
progresses, our strong organic growth performance within many of our
businesses continues to be a bright spot for Stanley Black & Decker. However,
the year-to-date performance of our Security business has created pressure on
our results which has, along with lower organic growth expectations within
certain businesses and geographies, caused us to revise our full year 2013
earnings and free cash flow outlook. The actions we have taken and are
executing to address the Security segment’s margin performance will enable us
to increase Security margins to levels that are more closely aligned to
historical results. We remain focused and committed to attaining our long-term
financial goals and 2016/2017 vision enabled by our disciplined focus on
organic growth initiatives, our commitment to allocating capital in ways that
provide excellent returns for our shareholders, and our proven capabilities of
driving efficiencies and streamlining our operations via the Stanley
Fulfillment System.

“Assuming that the level of volatility and current uncertainty in the markets
we serve does not worsen in 2014 and based on our path to recovery in
Security, we see conditions in 2014 that support our long-term 4%-6% organic
growth expectations and 2014 EPS growth, excluding charges, ranging from 7% -
9%.”

Merger And Acquisition (M&A) One-Time Charges

Total one-time charges in 3Q’13 related to M&A were $67.2 million. Gross
margin includes $5.3 million of these one-time charges, primarily for
integration-related matters, and SG&A includes $31.9 million in one-time
charges, primarily for integration-related administration costs and consulting
fees, as well as employee-related matters. $17.3 million of these costs that
impact the Company’s operating margin are included in segment results, with
the remainder in corporate overhead. One-time charges of $1.5 million are
included in Other, net, primarily related to deal costs, and $28.5 million are
included in restructuring charges, the majority of which represent
Niscayah-related restructuring charges and cost containment actions associated
with the severance of employees.

The company will host a conference call with investors today, Wednesday,
October 16, at 8:00am ET. A slide presentation which will accompany the call
will be available at www.stanleyblackanddecker.com and will remain available
after the call.

You can also access the slides via the Stanley Black & Decker Investor
Relations iPad & iPhone app from the Apple App Store by searching for “SWK
Investor Relations”.

The call will be accessible by telephone at (800) 447-0521, from outside the
U.S. at +1 (847) 413-3238, and via the Internet at
www.stanleyblackanddecker.com. To participate, please register on the web site
at least fifteen minutes prior to the call and download and install any
necessary audio software. Please use the conference identification number
3574-6661. A replay will also be available two hours after the call and can be
accessed at (888) 843-7419 or +1 (630) 652-3042 using the passcode 3574-6661#.
The replay will also be available as a podcast within 24 hours and can be
accessed on our website and via iTunes.

Stanley Black & Decker, an S&P 500 company, is a diversified global provider
of hand tools, power tools and related accessories, mechanical access
solutions and electronic security solutions, healthcare solutions, engineered
fastening systems, and more. Learn more at www.stanleyblackanddecker.com.

These results reflect the Company’s continuing operations. The Company sold
its Hardware & Home Improvement business (HHI), including the residential
portion of Tong Lung in December of 2012. The sale of this business occurred
in a First and Second Closing. The First closing, which excluded the
residential portion of Tong Lung, occurred on December 17, 2012. The Second
closing in which the residential portion of Tong Lung was sold occurred on
April 8, 2013. The operating results of the residential portion of Tong Lung
and HHI have been reported as discontinued operations for 3Q’12. In addition,
in 3Q’13 the Company has reported two small businesses as discontinued
operations. Total sales reported as discontinued operations were $7.8 million
and $268.8 million for 3Q’13 and 3Q’12, respectively.

Organic sales growth is defined as total sales growth less the sales of
companies acquired in the past twelve months and any foreign currency impacts.
Operating marginis defined as sales less cost of sales and selling, general
and administrative expenses. Management uses operating margin and its
percentage of net sales as key measures to assess the performance of the
Company as a whole, as well as the related measuresat the segment level. Free
cash flow is defined as cash flow from operations less capital and 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. 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
normalized statement of operations, cash flows and business segment
information, as reconciled to GAAP on pages 13-18 for 2013 and 2012, are
considered relevant to aid analysis of the Company’s operating performance,
earnings results and cash flows aside from the material impact of the one-time
charges and payments associated with the Black & Decker merger, the Niscayah
and Infastech acquisitions and other smaller acquisitions of the Company.
Normalized cash flow and free cash flow, as reconciled from the associated
GAAP measures on pages 15-16 for 2013 and 2012 are considered meaningful pro
forma metrics to aid the understanding of the Company’s cash flow performance
aside from the material impact of the M&A-related payments and charges.

                            CAUTIONARY STATEMENTS

          Under the Private Securities Litigation Reform Act of 1995

Statements in this press release that are not historical, including but not
limited to those regarding the Company’s ability to: (i) achieve full year
2013 diluted EPS of $4.90 - $5.00 ($3.75 - $3.95 on a GAAP basis); (ii)
generate approximately $800 million in free cash flow for 2013, excluding
charges and payments; (iii) achieve its 2016/2017 vision; and (iv) achieve
long term organic growth of 4% - 6% and 2014 EPS growth ranging from 7% - 9%
(collectively, the “Results”); are “forward looking statements” and subject to
risk and uncertainty.

The Company’s ability to deliver the Results as described above is based on
current expectations and involves inherent risks and uncertainties, including
factors listed below and other factors that could delay, divert, or change any
of them, and could cause actual outcomes and results to differ materially from
current expectations. In addition to the risks, uncertainties and other
factors discussed in this press release, the risks, uncertainties and other
factors that could cause or contribute to actual results differing materially
from those expressed or implied in the forward looking statements include,
without limitation, those set forth under Item 1A Risk Factors of the
Company’s Annual Report on Form 10-K and any material changes thereto set
forth in any subsequent Quarterly Reports on Form 10-Q, or those contained in
the Company’s other filings with the Securities and Exchange Commission, and
those set forth below.

The Company’s ability to deliver the Results is dependent, or based, upon: (i)
the Company’s ability to achieve $50 million of synergies in 2013 from Black &
Decker merger and another $50 million from the acquisition of Niscayah; (ii)
the Company’s ability to execute its integration plans and achieve synergies
from the Infastech acquisition sufficient to generate $.20 of EPS accretion in
2013; (iii) the Company’s ability to generate organic net sales increases of
approximately 3% in 2013; (iv) the Company’s ability to generate a modest
increase in operating margin vs. the prior year in the CDIY segment and to
minimize any decrease in operating margin vs. the prior year in the Security
and Industrial segments; (v) the Company’s ability to continue to identify and
execute upon acquisitions and sales opportunities to increase its CDIY, IAR
and Security businesses in the emerging markets while minimizing associated
costs; (vi) the Company’s ability to achieve a tax rate of approximately 20%
in 2013; (vii) the Company’s ability to limit interest expense to
approximately $145 million and other-net to approximately $250 million in
2013; (viii) the Company’s ability to minimize tax liabilities associated with
the HHI divestiture; (ix) successful integration of acquisitions completed in
2012 and 2013, and any additional acquisitions completed during the year, as
well as integration of existing businesses; (x) the continued acceptance of
technologies used in the Company’s products and services; (xi) the Company’s
ability to manage existing Sonitrol franchisee and Mac Tools relationships;
(xii) the Company’s ability to minimize costs associated with any sale or
discontinuance of a business or product line, including any severance,
restructuring, legal or other costs; (xiii) the proceeds realized with respect
to any business or product line disposals; (xiv) the extent of any asset
impairments with respect to any businesses or product lines that are sold or
discontinued; (xv) the success of the Company’s efforts to manage freight
costs, steel and other commodity costs as well as capital expenditures; (xvi)
the Company’s ability to sustain or increase prices in order to, among other
things, offset or mitigate the impact of steel, freight, energy, non-ferrous
commodity and other commodity costs and any inflation increases; (xvii) the
Company’s ability to generate free cash flow and maintain a strong debt to
capital ratio; (xviii) the Company’s ability to identify and effectively
execute productivity improvements and cost reductions, while minimizing any
associated restructuring charges; (xix) the Company’s ability to obtain
favorable settlement of routine tax audits; (xx) the ability of the Company to
generate earnings sufficient to realize future income tax benefits during
periods when temporary differences become deductible; (xxi) the continued
ability of the Company to access credit markets under satisfactory terms;
(xxii) the Company’s ability to negotiate satisfactory payment terms under
which the Company buys and sells goods, services, materials and products; and
(xxiii) the Company’s ability to successfully develop, market and achieve
sales from new products and services.

The Company’s ability to deliver the Results is also dependent upon: (i) the
success of the Company’s marketing and sales efforts, including the ability to
develop and market new and innovative products in both existing and new
markets; (ii) the ability of the Company to maintain or improve production
rates in the Company’s manufacturing facilities, respond to significant
changes in product demand and fulfill demand for new and existing products;
(iii) the Company’s ability to continue improvements in working capital
through effective management of accounts receivable and inventory levels; (iv)
the ability to continue successfully managing and defending claims and
litigation; (v) the success of the Company’s efforts to mitigate any cost
increases generated by, for example, increases in the cost of energy or
significant Chinese Renminbi or other currency appreciation; (vi) the
geographic distribution of the Company’s earnings; (vii) the commitment to and
success of the Stanley Fulfillment System; and (viii) successful
implementation with expected results of cost reduction programs.

The Company’s ability to achieve the Results will also be affected by external
factors. These external factors include: challenging global macroeconomic
environment; the continued economic growth of emerging markets, particularly
Latin America; pricing pressure and other changes within competitive markets;
the continued consolidation of customers particularly in consumer channels;
inventory management pressures on the Company’s customers; the impact the
tightened credit markets may have on the Company or its customers or
suppliers; the extent to which the Company has to write off accounts
receivable or assets or experiences supply chain disruptions in connection
with bankruptcy filings by customers or suppliers; increasing competition;
changes in laws, regulations and policies that affect the Company, including,
but not limited to trade, monetary, tax and fiscal policies and laws; the
timing and extent of any inflation or deflation; currency exchange
fluctuations; the impact of dollar/foreign currency exchange and interest
rates on the competitiveness of products and the Company’s debt program; the
strength of the U.S. and European economies; the extent to which world-wide
markets associated with homebuilding and remodeling stabilize and rebound; the
impact of events that cause or may cause disruption in the Company’s supply,
manufacturing, distribution and sales networks such as war, terrorist
activities, and political unrest; and recessionary or expansive trends in the
economies of the world in which the Company operates. The Company undertakes
no obligation to publicly update or revise any forward-looking statements to
reflect events or circumstances that may arise after the date hereof.

                                                             
                                                                      
STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, Millions of Dollars Except Per Share Amounts)

                                                                      
                      THIRD QUARTER                   YEAR TO DATE
                      2013            2012            2013            2012
                                                                      
NET SALES             $ 2,759.3       $ 2,517.2       $ 8,095.2       $ 7,488.4
                                                                      
COSTS AND
EXPENSES
  Cost of sales        1,771.6       1,605.3       5,193.0       4,739.0 
  Gross margin          987.7           911.9           2,902.2         2,749.4
  % of Net Sales        35.8    %       36.2    %       35.9    %       36.7    %
                                                                      
  Selling,
  general and           669.6           609.2           2,011.5         1,863.3
  administrative
  % of Net sales        24.3    %       24.2    %       24.8    %       24.9    %
                                                                      
  Operating             318.1           302.7           890.7           886.1
  margin
  % of Net sales        11.5    %       12.0    %       11.0    %       11.8    %
                                                                      
  Other - net           66.6            112.7           208.8           262.3
  Restructuring        28.5          52.9          40.6          116.6   
  charges
  Income from           223.0           137.1           641.3           507.2
  operations
                                                                      
  Interest - net       36.1          34.2          109.1         98.0    
                                                                      
EARNINGS FROM
CONTINUING              186.9           102.9           532.2           409.2
OPERATIONS BEFORE
INCOME TAXES
  Income taxes on
  continuing           17.3          12.9          80.5          82.9    
  operations
NET EARNINGS FROM
CONTINUING             169.6         90.0          451.7         326.3   
OPERATIONS
                                                                      
  Less: net loss
  attributable to      (0.3    )      (0.2    )      (0.9    )      (1.2    )
  non-controlling
  interests
                                                                      
NET EARNINGS FROM
CONTINUING
OPERATIONS
ATTRIBUTABLE
  TO COMMON            169.9         90.2          452.6         327.5   
  SHAREOWNERS
                                                                      
  (Loss) earnings
  from
  discontinued          (23.4   )       40.8            (33.0   )       98.1
  operations
  before income
  taxes
  Income tax
  (benefit)
  expense on           (19.5   )      15.8          (14.6   )      33.8    
  discontinued
  operations
NET (LOSS)
EARNINGS FROM          (3.9    )      25.0          (18.4   )      64.3    
DISCONTINUED
OPERATIONS
                                                                      
NET EARNINGS
ATTRIBUTABLE TO       $ 166.0        $ 115.2        $ 434.2        $ 391.8   
COMMON
SHAREOWNERS
                                                                      
                                                                      
BASIC EARNINGS
(LOSS) PER SHARE
OF COMMON STOCK
  Continuing          $ 1.10          $ 0.55          $ 2.92          $ 2.00
  operations
  Discontinued         (0.02   )      0.15          (0.12   )      0.39    
  operations
  Total basic
  earnings per        $ 1.07         $ 0.71         $ 2.80         $ 2.39    
  share of common
  stock
                                                                      
DILUTED EARNINGS
(LOSS) PER SHARE
OF COMMON STOCK
  Continuing          $ 1.07          $ 0.54          $ 2.85          $ 1.95
  operations
  Discontinued         (0.02   )      0.15          (0.12   )      0.38    
  operations
  Total diluted
  earnings per        $ 1.04         $ 0.69         $ 2.74         $ 2.34    
  share of common
  stock
                                                                      
DIVIDENDS PER         $ 0.50         $ 0.49         $ 1.48         $ 1.31    
SHARE
                                                                      
AVERAGE SHARES
OUTSTANDING (in
thousands)
  Basic                155,043       162,990       155,140       163,835 
  Diluted              158,925       166,043       158,717       167,568 
                                                                      

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
                                                            
                                                September 28,     December 29,
                                                2013              2012
                                                                  
ASSETS
  Cash and cash equivalents                     $   469.1         $  716.0
  Accounts and notes receivable, net                1,936.4          1,525.8
  Inventories, net                                  1,629.5          1,304.6
  Assets held for sale                              15.0             171.7
  Other current assets                             381.2           393.2
  Total current assets                             4,431.2         4,111.3
  Property, plant and equipment, net                1,455.4          1,329.9
  Goodwill and other intangibles, net               10,688.8         9,947.0
  Other assets                                     448.3           455.8
  Total assets                                  $   17,023.7      $  15,844.0
                                                                  
                                                                  
LIABILITIES AND SHAREOWNERS' EQUITY
  Short-term borrowings                         $   1,220.1       $  11.5
  Accounts payable                                  1,625.9          1,345.9
  Accrued expenses                                  1,097.8          1,680.0
  Liabilities held for sale                        5.0             37.3
  Total current liabilities                        3,948.8         3,074.7
  Long-term debt                                    3,396.9          3,526.5
  Other long-term liabilities                       2,659.7          2,515.7
  Stanley Black & Decker, Inc. shareowners'         6,936.9          6,667.1
  equity
  Non-controlling interests' equity                81.4            60.0
  Total liabilities and equity                  $   17,023.7      $  15,844.0
                                                                     

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
SUMMARY OF CASH FLOW ACTIVITY
(Unaudited, Millions of Dollars)
                                                           
                          THIRD QUARTER             YEAR TO DATE
                                                                  
                          2013         2012         2013          2012
   OPERATING
   ACTIVITIES
     Net earnings
     from continuing      $ 169.6      $ 90.0       $ 451.7       $ 326.3
     operations
     Net (loss)
     earnings from          (3.9   )     25.0         (18.4   )     64.3
     discontinued
     operations
     Depreciation and       108.8        105.8        322.7         330.6
     amortization
     Changes in
     working                (244.2 )     (174.8 )     (371.6  )     (286.0   )
     capital^1
     Other                 69.3       105.2      (248.1  )    (17.1    )
     Net cash
     provided by            99.6         151.2        136.3         418.1
     operating
     activities
                                                                  
                                                                  
   INVESTING AND
   FINANCING
   ACTIVITIES
     Capital and
     software               (94.2  )     (89.0  )     (262.1  )     (259.5   )
     expenditures
     Proceeds from
     sale of business       1.0          2.3          96.5          8.6
     / assets
     Acquisitions,
     net of cash            (16.7  )     (106.4 )     (926.6  )     (695.1   )
     acquired
     Proceeds from
     long-term              -            729.4        -             729.4
     borrowings
     Premium paid on
     debt                   -            (91.0  )     -             (91.0    )
     extinguishment
     Proceeds from
     issuances of           32.3         27.4         138.7         102.9
     common stock
     Net short-term
     (repayments)           (70.9  )     527.4        1,199.5       1,316.3
     borrowings
     Cash dividends         (77.5  )     (82.5  )     (235.0  )     (221.3   )
     on common stock
     Payments on            (0.6   )     (900.9 )     (1.7    )     (1,222.0 )
     long-term debt
     Purchases of
     common stock for       (7.8   )     -            (32.6   )     (217.8   )
     treasury
     Payment on
     forward stock          -            -            (350.0  )     -
     purchase
     contract
     Other                 42.2       23.8       (9.9    )    (6.0     )
     Net cash (used
     in) provided by
     investing and          (192.2 )     40.5         (383.2  )     (555.5   )
     financing
     activities
                                                                  
   (Decrease)
   Increase in Cash         (92.6  )     191.7        (246.9  )     (137.4   )
   and Cash
   Equivalents
                                                                  
   Cash and Cash
   Equivalents,            561.7      577.8      716.0       906.9    
   Beginning of
   Period
                                                                  
   Cash and Cash
   Equivalents, End       $ 469.1     $ 769.5     $ 469.1      $ 769.5    
   of Period
                                                                  
                                                                  
^1 The change in working capital is comprised of accounts receivable,
   inventory, accounts payable and deferred revenue.
   

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
                                                             
                                                                        
                     THIRD QUARTER                     YEAR TO DATE
                                                                        
                     2013             2012             2013             2012
  NET SALES
                                                                        
    Construction     $ 1,387.5        $ 1,315.7        $ 4,025.7        $ 3,819.1
    & DIY
    Industrial         771.4            618.0            2,273.1          1,909.1
    Security          600.4          583.5          1,796.4        1,760.2 
    Total            $ 2,759.3       $ 2,517.2       $ 8,095.2       $ 7,488.4 
                                                                        
                                                                        
  SEGMENT PROFIT
    Construction     $ 203.9          $ 186.9          $ 588.8          $ 532.2
    & DIY
    Industrial         109.2            94.6             307.5            314.2
    Security          61.4           83.1           173.5          224.4   
    Segment            374.5            364.6            1,069.8          1,070.8
    Profit
    Corporate         (56.4   )       (61.9   )       (179.1  )       (184.7  )
    Overhead
    Total            $ 318.1         $ 302.7         $ 890.7         $ 886.1   
                                                                        
                                                                        
  Segment Profit
  as a
  Percentage of
  Net Sales
    Construction       14.7    %        14.2    %        14.6    %        13.9    %
    & DIY
    Industrial         14.2    %        15.3    %        13.5    %        16.5    %
    Security          10.2    %       14.2    %       9.7     %       12.7    %
    Segment            13.6    %        14.5    %        13.2    %        14.3    %
    Profit
    Corporate         (2.0    %)      (2.5    %)      (2.2    %)      (2.5    %)
    Overhead
    Total             11.5    %       12.0    %       11.0    %       11.8    %
                                                                                  

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
                                                          
                            THIRD QUARTER 2013
                                               Merger &
                                               Acquisition-
                            Reported           Related and       Normalized^3
                                               Other
                                               Charges^1
                                                                  
   Gross margin             $  987.7           $  5.3             $  993.0
   % of Net Sales              35.8   %                              36.0   %
                                                                  
   Selling, general
   and                         669.6              (31.9  )           637.7
   administrative
   % of Net Sales              24.3   %                              23.1   %
                                                                  
   Operating margin            318.1              37.2               355.3
   % of Net Sales              11.5   %                              12.9   %
                                                                  
   Earnings from
   continuing                  186.9              67.2               254.1
   operations before
   income taxes
                                                                  
   Income taxes on
   continuing                  17.3               16.0               33.3
   operations
                                                                  
   Net earnings from
   continuing                  169.9              51.3               221.2
   operations
                                                                  
   Diluted earnings
   per share of             $  1.07            $  0.32            $  1.39
   common stock
                                                                  
                                                                  
   Merger and acquisition-related and other charges relate primarily to the
^1 Black & Decker merger and Niscayah and Infastech acquisitions, including
   facility closure-related charges, employee-related charges and integration
   costs.
                                                                  
                            THIRD QUARTER 2012
                                               Merger &
                                               Acquisition-
                            Reported           Related and       Normalized^3
                                               Other
                                               Charges^2
                                                                  
   Gross margin             $  911.9           $  11.7            $  923.6
   % of Net Sales              36.2   %                              36.7   %
                                                                  
   Selling, general
   and                         609.2              (38.9  )           570.3
   administrative
   % of Net Sales              24.2   %                              22.7   %
                                                                  
   Operating margin            302.7              50.6               353.3
   % of Net Sales              12.0   %                              14.0   %
                                                                  
   Earnings from
   continuing                  102.9              157.3              260.2
   operations before
   income taxes
                                                                  
   Income taxes on
   continuing                  12.9               44.6               57.5
   operations
                                                                  
   Net earnings from
   continuing                  90.2               112.7              202.9
   operations
                                                                  
   Diluted earnings
   per share of             $  0.54            $  0.68            $  1.22
   common stock
                                                                  
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
   Decker merger and Niscayah acquisition, including facility closure-related
^2 charges, employee-related charges, integration costs, as well as cost
   containment charges. Other charges relate to the loss on extinguishment of
   debt.
   The normalized 2013 and 2012 information, as reconciled to GAAP above, is
   considered relevant to aid analysis of the Company’s margin and earnings
^3 results aside from the material impact of the merger & acquisition-related
   charges as well as charges associated with the loss on extinguishment of
   debt.
   

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP EARNINGS FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars Except Per Share Amounts)
                                                           
                            YEAR TO DATE 2013
                                                 Merger &
                                                 Acquisition-
                            Reported             Related and     Normalized^3
                                                 Other
                                                 Charges^1
                                                                  
   Gross margin             $  2,902.2              26.4          $  2,928.6
   % of Net Sales              35.9     %                            36.2    %
                                                                  
   Selling, general
   and                         2,011.5              (90.3  )         1,921.2
   administrative
   % of Net Sales              24.8     %                            23.7    %
                                                                  
   Operating margin            890.7                116.7            1,007.4
   % of Net Sales              11.0     %                            12.4    %
                                                                  
   Earnings from
   continuing                  532.2                178.6            710.8
   operations before
   income taxes
                                                                  
   Income taxes on
   continuing                  80.5                 50.0             130.5
   operations
                                                                  
   Net earnings from
   continuing                  452.6                128.6            581.2
   operations
                                                                  
   Diluted earnings
   per share of             $  2.85              $  0.81          $  3.66
   common stock
                                                                  
                                                                  
   Merger and acquisition-related and other charges relate primarily to the
   Black & Decker merger and Niscayah and Infastech acquisitions, including
^1 facility closure-related charges, employee-related charges and integration
   costs, as well as a restructuring reversal due to the termination of a
   previously approved restructuring action.
                                                                  
                            YEAR TO DATE 2012
                                                 Merger &
                                                 Acquisition-
                            Reported             Related and     Normalized^3
                                                 Other
                                                 Charges^2
                                                                  
   Gross margin             $  2,749.4              18.3          $  2,767.7
   % of Net Sales              36.7     %                            37.0    %
                                                                  
   Selling, general
   and                         1,863.3              (99.8  )         1,763.5
   administrative
   % of Net Sales              24.9     %                            23.5    %
                                                                  
   Operating margin            886.1                118.1            1,004.2
   % of Net Sales              11.8     %                            13.4    %
                                                                  
   Earnings from
   continuing                  409.2                310.9            720.1
   operations before
   income taxes
                                                                  
   Income taxes on
   continuing                  82.9                 76.5             159.4
   operations
                                                                  
   Net earnings from
   continuing                  327.5                234.4            561.9
   operations
                                                                  
   Diluted earnings
   per share of             $  1.95              $  1.40          $  3.35
   common stock
                                                                  
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
   Decker merger and Niscayah acquisition, including facility closure-related
^2 charges, employee-related charges, integration costs, as well as cost
   containment charges. Other charges relate to the loss on extinguishment of
   debt.
   The normalized 2013 and 2012 information, as reconciled to GAAP above, is
   considered relevant to aid analysis of the Company’s margin and earnings
^3 results aside from the material impact of the merger & acquisition-related
   charges as well as charges associated with the loss on extinguishment of
   debt.
   

STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
                                                         
                           THIRD QUARTER 2013
                                              Merger &
                                              Acquisition-
                           Reported           Related            Normalized^4
                                              Charges and
                                              Payments^1
                                                                 
    Free Cash Flow
    Computation^3
    Net cash
    provided by            $  99.6            52.7               $   152.3
    operating
    activities
    Less: capital
    and software             (94.2  )        12.9                  (81.3  )
    expenditures
    Free Cash Inflow
    (before                $  5.4                               $   71.0   
    dividends)
                                                                 
    Merger and acquisition-related charges and payments relate primarily to
^1  the Black & Decker merger and Niscayah and Infastech acquisitions,
    including facility closure-related charges, employee-related charges and
    integration costs.
                                                                 
                                                                 
                           THIRD QUARTER 2012
                                              Merger &
                                              Acquisition-
                           Reported           Related            Normalized^4
                                              Charges and
                                              Payments^2
                                                                 
    Free Cash Flow
    Computation^3
    Net cash
    provided by            $  151.2           83.5               $   234.7
    operating
    activities
    Less: capital
    and software             (89.0  )        23.2                  (65.8  )
    expenditures
    Free Cash Inflow
    (before                $  62.2                              $   168.9  
    dividends)
                                                                 
                                                                 
    Merger and acquisition-related charges and payments relate primarily to
^2  the Black & Decker merger and Niscayah acquisition, including facility
    closure-related charges, employee-related charges, integration costs, as
    well as cost containment charges.
                                                                 
    Free cash flow is defined as cash flow from operations less capital and
    software expenditures. Management considers free cash flow an important
    measure of its liquidity, as well as its ability to fund future growth and
    to provide a return to the shareowners. Free cash flow does not include
^3, deductions for mandatory debt service, other borrowing activity,
4   discretionary dividends on the Company’s common stock and business
    acquisitions, among other items. Normalized cash flow and free cash flow,
    as reconciled above, are considered meaningful pro forma metrics to aid
    the understanding of the Company's cash flow performance aside from the
    material impact of merger and acquisition-related activities.
    

STANLEY BLACK & DECKER INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP CASH FLOW FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
                                                          
                           YEAR TO DATE 2013
                                               Merger &
                                               Acquisition-
                           Reported            Related            Normalized^4
                                               Charges and
                                               Payments^1
                                                                  
    Free Cash Flow
    Computation^3
    Net cash
    provided by            $  136.3            223.7              $  360.0
    operating
    activities
    Less: capital
    and software             (262.1  )        58.6                 (203.5  )
    expenditures
    Free Cash
    (Outflow) Inflow       $  (125.8  )                           $  156.5   
    (before
    dividends)
                                                                  
    Merger and acquisition-related charges and payments relate primarily to
^1  the Black & Decker merger and Niscayah and Infastech acquisitions,
    including facility closure-related charges, employee-related charges and
    integration costs.
                                                                  
                                                                  
                           YEAR TO DATE 2012
                                               Merger &
                                               Acquisition-
                           Reported            Related            Normalized^4
                                               Charges and
                                               Payments^2
                                                                  
    Free Cash Flow
    Computation^3
    Net cash
    provided by            $  418.1            212.2              $  630.3
    operating
    activities
    Less: capital
    and software             (259.5  )        92.0                 (167.5  )
    expenditures
    Free Cash Inflow
    (before                $  158.6                              $  462.8   
    dividends)
                                                                  
                                                                  
    Merger and acquisition-related charges and payments relate primarily to
^2  the Black & Decker merger and Niscayah acquisition, including facility
    closure-related charges, employee-related charges, integration costs, as
    well as cost containment charges.
                                                                  
    Free cash flow is defined as cash flow from operations less capital and
    software expenditures. Management considers free cash flow an important
    measure of its liquidity, as well as its ability to fund future growth and
    to provide a return to the shareowners. Free cash flow does not include
^3, deductions for mandatory debt service, other borrowing activity,
4   discretionary dividends on the Company’s common stock and business
    acquisitions, among other items. Normalized cash flow and free cash flow,
    as reconciled above, are considered meaningful pro forma metrics to aid
    the understanding of the Company's cash flow performance aside from the
    material impact of merger and acquisition-related activities.
    

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
                                                          
                                                                  
                            THIRD QUARTER 2013
                                                Merger &
                            Reported            Acquisition-      Normalized^3
                                                Related
                                                Charges^1
   SEGMENT PROFIT
                                                                  
         Construction       $  203.9            $    3.1          $  207.0
         & DIY
         Industrial            109.2                 2.3             111.5
         Security             61.4                11.9           73.3   
         Segment               374.5                 17.3            391.8
         Profit
         Corporate            (56.4  )             19.9           (36.5  )
         Overhead
         Total              $  318.1           $    37.2         $  355.3  
                                                                  
                                                                  
   Segment Profit as
   a Percentage of
   Net Sales
         Construction          14.7   %                              14.9   %
         & DIY
         Industrial            14.2   %                              14.5   %
         Security             10.2   %                             12.2   %
         Segment               13.6   %                              14.2   %
         Profit
         Corporate            (2.0   %)                            (1.3   %)
         Overhead
         Total                11.5   %                             12.9   %
                                                                  
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
^1 Decker merger and Niscayah and Infastech acquisitions, including facility
   closure-related charges, employee-related charges and integration costs.
                                                                  
                            THIRD QUARTER 2012
                                                Merger &
                            Reported            Acquisition-      Normalized^3
                                                Related
                                                Charges^2
   SEGMENT PROFIT
                                                                  
         Construction       $  186.9            $    17.2         $  204.1
         & DIY
         Industrial            94.6                  0.6             95.2
         Security             83.1                10.3           93.4   
         Segment               364.6                 28.1            392.7
         Profit
         Corporate            (61.9  )             22.5           (39.4  )
         Overhead
         Total              $  302.7           $    50.6         $  353.3  
                                                                  
                                                                  
   Segment Profit as
   a Percentage of
   Net Sales
         Construction          14.2   %                              15.5   %
         & DIY
         Industrial            15.3   %                              15.4   %
         Security             14.2   %                             16.0   %
         Segment               14.5   %                              15.6   %
         Profit
         Corporate            (2.5   %)                            (1.6   %)
         Overhead
         Total                12.0   %                             14.0   %
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
^2 Decker merger and Niscayah acquisition, including facility closure-related
   charges, employee-related charges and integration costs.
   The normalized 2013 and 2012 business segment information, as reconciled to
^3 GAAP above, is considered relevant to aid analysis of the Company’s segment
   profit results aside from the material impact of the merger and
   acquisition-related charges.
   

STANLEY BLACK & DECKER, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP SEGMENT PROFIT FINANCIAL MEASURES TO CORRESPONDING
NON-GAAP FINANCIAL MEASURES
(Unaudited, Millions of Dollars)
                                                          
                                                                  
                           YEAR TO DATE 2013
                                                 Merger &
                           Reported              Acquisition-     Normalized^3
                                                 Related
                                                 Charges^1
   SEGMENT PROFIT
                                                                  
        Construction       $  588.8              $    9.2         $ 598.0
        & DIY
        Industrial            307.5                   20.8          328.3
        Security             173.5                 27.1         200.6   
        Segment               1,069.8                 57.1          1,126.9
        Profit
        Corporate            (179.1   )             59.6         (119.5  )
        Overhead
        Total              $  890.7             $    116.7       $ 1,007.4 
                                                                  
                                                                  
   Segment Profit as
   a Percentage of
   Net Sales
        Construction          14.6     %                            14.9    %
        & DIY
        Industrial            13.5     %                            14.4    %
        Security             9.7      %                           11.2    %
        Segment               13.2     %                            13.9    %
        Profit
        Corporate            (2.2     %)                          (1.5    %)
        Overhead
        Total                11.0     %                           12.4    %
                                                                  
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
^1 Decker merger and Niscayah and Infastech acquisitions, including facility
   closure-related charges, employee-related charges and integration costs.
                           
                           YEAR TO DATE 2012
                                                 Merger &
                           Reported              Acquisition-     Normalized^3
                                                 Related
                                                 Charges^2
   SEGMENT PROFIT
                                                                  
        Construction       $  532.2              $    31.0        $ 563.2
        & DIY
        Industrial            314.2                   3.6           317.8
        Security             224.4                 25.9         250.3   
        Segment               1,070.8                 60.5          1,131.3
        Profit
        Corporate            (184.7   )             57.6         (127.1  )
        Overhead
        Total              $  886.1             $    118.1       $ 1,004.2 
                                                                  
                                                                  
   Segment Profit as
   a Percentage of
   Net Sales
        Construction          13.9     %                            14.7    %
        & DIY
        Industrial            16.5     %                            16.6    %
        Security             12.7     %                           14.2    %
        Segment               14.3     %                            15.1    %
        Profit
        Corporate            (2.5     %)                          (1.7    %)
        Overhead
        Total                11.8     %                           13.4    %
                                                                  
   Merger and acquisition-related charges relate primarily to the Black &
^2 Decker merger and Niscayah acquisition, including facility closure-related
   charges, employee-related charges and integration costs.
   The normalized 2013 and 2012 business segment information, as reconciled to
^3 GAAP above, is considered relevant to aid analysis of the Company’s segment
   profit results aside from the material impact of the merger and
   acquisition-related charges.
   

Contact:

Stanley Black & Decker
Greg Waybright, 860-827-3833
Vice President, Investor & Government Relations
greg.waybright@sbdinc.com
 
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