NEW BRITAIN, Conn., Jan. 26, 2017 /PRNewswire/ — Stanley Black & Decker (NYSE: SWK) today announced full year and fourth quarter 2016 financial results.
Full Year Revenues Totaled $11.4 Billion, Up 2% Versus Prior Year, As 4% Organic Growth Was Partially Offset By 2% Currency Impact
Full Year Diluted GAAP EPS Was $6.51, Up 10% From 2015 As Strong Operational Performance More Than Offset Approximately $155 Million Of Currency Headwinds
2016 Free Cash Flow Of $1.1 Billion And Free Cash Flow Conversion Of 118%; Working Capital Turns Improved To 10.6x, Up 1.4 Turns
4Q’16 Revenues Up 3% Versus Prior Year, Driven By 4% Organic Growth
4Q’16 Diluted GAAP EPS Was $1.71, Down 4% From 4Q’15 As Higher Restructuring, Currency Headwinds And Growth Investments More Than Offset Solid Operational Performance And A Lower Tax Rate
Expect 2017 Full Year Diluted GAAP EPS Of $6.85 To $7.05, Up ~7% At The Mid-Point Versus Prior Year (Excludes The Estimated Earnings Per Share Impacts Of The Newell Tools, Mechanical Security And Craftsman Transactions); 2017 Free Cash Flow Conversion Expected To Approximate 100%
Announced Significant Portfolio Activity In 4Q’16 / Early 2017 — Acquisition Of Newell Brands’ Tools Business, Sale Of Majority Of Mechanical Security Businesses, And Purchase Of Craftsman Brand From Sears Holdings
4Q’16 Key Points:
Net sales for the quarter were $2.9 billion, up 3% versus prior year, as positive volume (+3%) and price (+1%) more than offset currency (-1%).
Gross margin rate for the quarter was 36.9%, up 130 basis points from prior year rate as price, productivity, cost actions and commodity deflation more than offset unfavorable currency.
SG&A expenses were 23.4% of sales compared to 21.5% in 4Q’15 reflecting investments in key SFS 2.0 initiatives moderated by continued tight cost control.
Operating margin rate was 13.5% compared to 14.2% in 4Q’15, as operational actions to improve profitability were more than offset by approximately $40 million of unfavorable currency and higher growth investments.
Restructuring charges for the quarter were $21.7 million compared to $3.7 million in 4Q’15.
Working capital turns for the quarter were 10.6, up 1.4 turns from 4Q’15 as the company continues to benefit from its intense focus on working capital management.
Stanley Black & Decker’s President and CEO, James M. Loree, commented, “2016 marked another year of strong performance for Stanley Black & Decker. The team delivered above-market organic growth, margin expansion in the face of significant currency headwinds, and outstanding free cash flow conversion. Organic growth for the fourth quarter and full year was a solid 4%, even in the face of a continued decline from Engineered Fastening’s electronics related revenues. We ended the year with an impressive 118% free cash flow conversion and 10.6 working capital turns, ahead of our top-quartile goal of 10 turns.
“I’m also pleased with the actions we have recently taken in the M&A space to shape our portfolio and further our goal of building a powerful, diversified industrial growth company. M&A, combined with strong organic growth performance, will help enable us to reach our objective of doubling the size of the company by 2022 while expanding our margin rate. Adding notable and iconic brands, such as Lenox and Irwin, and now Craftsman, uniquely complements our existing, strong portfolio of world-class brands and franchises. The sale of the majority of our Mechanical Security businesses will allow us to redeploy that capital from a low-growth business and invest it in more robust growth opportunities.
“As we look ahead, we are expecting another strong year in 2017. Certainly, there are significant challenges from a currency and geopolitical perspective, but we are confident in our ability to manage through these uncertainties and focus on solid execution. Stanley Black & Decker’s SFS 2.0 operating system, with its focus on core innovation, breakthrough innovation, digital and commercial excellence and functional transformation, gives us the framework from which to operate to deliver top quartile results.”