Stanley Black & Decker, Inc 10-Q for FY2022 Q1

Stanley Black & Decker, Inc. (SWK)

10-Q 2022-04-28 For: 2022-04-02

Added on April 06, 2026

About this 10-Q

Stanley Black & Decker, Inc filed this 10-Q on April 28, 2022, covering the quarter ended April 2, 2022 (FY2022 Q1).

Headline figures

Quarter ended April 2, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $4.45B; up 19.5% from $3.72B a year earlier
Net income: $175.3M; down 64.0% from net income of $487.4M a year earlier
Diluted EPS: $1.06; down 63.6% from $2.91 a year earlier

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CT						06-0548860
(STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)						(I.R.S. EMPLOYER IDENTIFICATION NUMBER)


Title Of Each Class		Trading Symbol	Name Of Each Exchange On Which Registered
Common Stock	$2.50 Par Value per Share	SWK	New York Stock Exchange
Corporate Units		SWT	New York Stock Exchange



PART I — FINANCIAL INFORMATION			3
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			3
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			36
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			46
ITEM 4. CONTROLS AND PROCEDURES			46
PART II — OTHER INFORMATION			49
ITEM 1. LEGAL PROCEEDINGS			49
ITEM 1A. RISK FACTORS			49
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			49
ITEM 6. EXHIBITS			51
SIGNATURE			52


	Year-to-Date
		2022		2021
Net Sales		$	4,448.0	$	3,720.8
Costs and Expenses
Cost of sales		$	3,142.6	$	2,333.0
Selling, general and administrative		949.2		716.9
Provision for credit losses		11.1		2.2
Other, net		62.0		48.0
Loss on sale of business		—		1.0
Restructuring charges		52.7		1.8
Interest income		(2.8)		(2.9)
Interest expense		54.7		47.5
		$	4,269.5	$	3,147.5
Earnings from continuing operations before income taxes and equity interest		178.5		573.3
Income taxes on continuing operations		22.9		115.5
Net earnings from continuing operations before equity interest		155.6		457.8
Share of net earnings of equity method investment		—		1.8
Net earnings from continuing operations		155.6		459.6
Less: Net earnings (losses) attributable to non-controlling interests		0.1		(0.6)
Net earnings from continuing operations attributable to Stanley Black & Decker, Inc.		$	155.5	$	460.2
Less: Preferred stock dividends and beneficial conversion feature		—		9.4
Net Earnings from Continuing Operations Attributable to Common Shareowners		$	155.5	$	450.8
Add: Contract adjustment payments accretion		0.3		0.2
Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted		$	155.8	$	451.0
Earnings from discontinued operations before income taxes		22.2		31.1
Income taxes on discontinued operations		2.4		3.9
Net earnings from discontinued operations		$	19.8	$	27.2
Net Earnings Attributable to Common Shareowners - Diluted		$	175.6	$	478.2
Net Earnings Attributable to Stanley Black & Decker, Inc.		$	175.3	$	487.4
Total Comprehensive Income Attributable to Common Shareowners		$	147.6	$	380.3
Basic earnings per share of common stock:
Continuing operations		$	1.00	$	2.86
Discontinued operations		$	0.13	$	0.17
Total basic earnings per share of common stock		$	1.13	$	3.04
Diluted earnings per share of common stock:
Continuing operations		$	0.94	$	2.74
Discontinued operations		$	0.12	$	0.17
Total diluted earnings per share of common stock		$	1.06	$	2.91


	April 2, 2022		January 1, 2022
ASSETS
Current Assets
Cash and cash equivalents	$	165.8	$	142.1
Accounts and notes receivable, net	1,842.0		1,481.7
Inventories, net	6,267.7		5,419.9
Current assets held for sale	864.0		869.6
Prepaid expenses	495.3		507.0
Other current assets	101.4		106.1
Total Current Assets	9,736.2		8,526.4
Property, plant and equipment, net	2,365.6		2,336.8
Goodwill	8,597.0		8,590.7
Customer Relationships, net	1,955.2		2,000.0
Trade Names, net	2,672.3		2,681.8
Other intangible Assets, net	12.8		13.2
Long-term assets held for sale	2,628.5		2,635.8
Other assets	1,391.1		1,395.3
Total Assets	$	29,358.7	$	28,180.0
LIABILITIES AND SHAREOWNERS' EQUITY
Current Liabilities
Short-term borrowings	$	5,086.4	$	2,241.1
Current maturities of long-term debt	1.2		1.3
Accounts payable	3,367.7		3,423.6
Accrued expenses	2,036.2		2,641.0
Liabilities held for sale	463.5		460.4
Total Current Liabilities	10,955.0		8,767.4
Long-term debt	5,355.5		4,353.6
Deferred taxes	662.8		711.2
Post-retirement benefits	454.9		474.1
Long-term liabilities held for sale	129.1		137.4
Other liabilities	2,446.6		2,143.9
Commitments and Contingencies (Notes R and S)
Shareowners’ Equity
Stanley Black & Decker, Inc. Shareowners’ Equity
Preferred stock, without par value: Authorized 10,000,000 shares in 2022 and 2021 Issued and outstanding 750,000 shares in 2022 and 2021	620.3		620.3
Common stock, par value $2.50 per share: Authorized 300,000,000 shares in 2022 and 2021 Issued 176,902,738 shares in 2022 and 2021	442.3		442.3
Retained earnings	8,801.4		8,742.4
Additional paid in capital	4,705.5		4,999.2
Accumulated other comprehensive loss	(1,873.3)		(1,845.6)
	12,696.2		12,958.6
Less: cost of common stock in treasury (25,964,890 shares in 2022 and 13,573,962 shares in 2021)	(3,343.4)		(1,368.1)
Stanley Black & Decker, Inc. Shareowners’ Equity	9,352.8		11,590.5
Non-controlling interests	2.0		1.9
Total Shareowners’ Equity	9,354.8		11,592.4
Total Liabilities and Shareowners’ Equity	$	29,358.7	$	28,180.0


	April 2, 2022		January 1, 2022
Cash and cash equivalents	$	165.8	$	142.1
Restricted cash included in Other current assets	3.9		7.6
Cash and cash equivalents included in Current assets held for sale	150.8		145.1
Cash, cash equivalents and restricted cash	$	320.5	$	294.8


	Preferred Stock		Common Stock		Additional Paid In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Non- Controlling Interests		Shareowners’ Equity
Balance January 1, 2022	$	620.3	$	442.3	$	4,999.2	$	8,742.4	$	(1,845.6)	$	(1,368.1)	$	1.9	$	11,592.4
Net earnings	—		—		—		175.3		—		—		0.1		175.4
Other comprehensive loss	—		—		—		—		(27.7)		—		—		(27.7)
Cash dividends declared — $0.79 per common share	—		—		—		(116.3)		—		—		—		(116.3)
Issuance of common stock (338,897 shares)	—		—		(24.0)		—		—		37.7		—		13.7
Repurchase of common stock (12,729,825 shares)	—		—		(300.0)		—		—		(2,013.0)		—		(2,313.0)
Stock-based compensation related	—		—		30.3		—		—		—		—		30.3
Balance April 2, 2022	$	620.3	$	442.3	$	4,705.5	$	8,801.4	$	(1,873.3)	$	(3,343.4)	$	2.0	$	9,354.8


Earnings per share of common stock:
Basic earnings per share of common stock:
Continuing operations	$	1.00	$	2.86
Discontinued operations	$	0.13	$	0.17
Total basic earnings per share of common stock	$	1.13	$	3.04

Diluted earnings per share of common stock:
Continuing operations	$	0.94	$	2.74
Discontinued operations	$	0.12	$	0.17
Total dilutive earnings per share of common stock	$	1.06	$	2.91


(Millions of Dollars)	April 2, 2022		January 1, 2022
Trade accounts receivable	$	1,773.1	$	1,398.2
Trade notes receivable	71.6		75.3
Other accounts receivable	105.1		104.1
Gross accounts and notes receivable	$	1,949.8	$	1,577.6
Allowance for credit losses	(107.8)		(95.9)
Accounts and notes receivable, net	$	1,842.0	$	1,481.7


(Millions of Dollars)	April 2, 2022		April 3, 2021
Beginning Balance	$	95.9	106.2
Charged To Costs and Expenses	11.1		2.2
Other, including recoveries and deductions (a)	0.8		0.9
Balance end of period	$	107.8	109.3


(Millions of Dollars)
Cash and cash equivalents	$	111.6
Accounts receivable, net	276.4
Inventories, net	900.7
Prepaid expenses and other assets	97.7
Property, plant and equipment	222.8
Trade names	390.0
Customer relationships	450.0
Other assets	37.8
Accounts payable	(394.4)
Accrued expenses	(258.7)
Deferred revenue	(0.9)
Long-term debt	(110.9)
Deferred taxes	(195.6)
Other liabilities	(68.4)
Total identifiable net assets	$	1,458.1
Goodwill	478.6
Total consideration	$	1,936.7


(Millions of Dollars, except per share amounts)	First Quarter 2022		First Quarter 2021
Net sales	$	4,448.0	$	4,594.8
Net earnings from continuing operations attributable to common shareowners - Diluted	$	242.9	$	475.8
Diluted earnings per share of common stock - Continuing operations	$	1.47	$	2.90


(Millions of Dollars)	Tools & Outdoor		Industrial		Total
Balance January 1, 2022	$	5,973.7	$	2,617.0	$	8,590.7
Acquisitions	40.1		—		40.1
Foreign currency translation	(25.8)		(8.0)		(33.8)
Balance April 2, 2022	$	5,988.0	$	2,609.0	$	8,597.0


(Millions of Dollars)	Balance Sheet Classification	April 2, 2022		January 1, 2022		Balance Sheet Classification	April 2, 2022		January 1, 2022
Derivatives designated as hedging instruments:
Interest Rate Contracts Cash Flow	Other current assets	$	—	$	1.2	Accrued expenses	$	—	$	1.9
Foreign Exchange Contracts Cash Flow	Other current assets	17.1		18.3		Accrued expenses	1.0		0.8
Net Investment Hedge	Other current assets	2.9		2.5		Accrued expenses	—		—
	LT other assets	—		3.3		LT other liabilities	—		—
Total designated as hedging		$	20.0	$	25.3		$	1.0	$	2.7
Derivatives not designated as hedging instruments:
Foreign Exchange Contracts	Other current assets	$	9.9	$	7.8	Accrued expenses	$	10.8	$	6.0
Total		$	29.9	$	33.1		$	11.8	$	8.7


	Year-to-Date 2022
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	23.4	Interest expense	$	(1.2)	$	—
Foreign Exchange Contracts	$	6.5	Cost of sales	$	6.1	$	—


STANLEY BLACK & DECKER, INC.


	Year-to-Date
		2022		2021
OPERATING ACTIVITIES
Net earnings from continuing operations		$	155.6	$	459.6
Net earnings from discontinued operations		19.8		27.2
Adjustments to reconcile net earnings to cash used in operating activities:
Depreciation and amortization of property, plant and equipment		92.0		93.5
Amortization of intangibles		51.7		50.5
Loss on sale of business		—		1.0
Share of net earnings of equity method investment		—		(1.8)
Changes in working capital		(1,336.1)		(720.4)
Changes in other assets and liabilities		(224.1)		(67.4)
Cash used in operating activities		(1,241.1)		(157.8)
INVESTING ACTIVITIES
Capital and software expenditures		(139.8)		(88.3)
Proceeds from sales of assets		9.0		1.3
Business acquisitions, net of cash acquired		(36.5)		(0.2)
Purchases of investments		(0.1)		(7.0)
Net investment hedge settlements		4.7		(52.6)
Other		(0.7)		(1.1)
Cash used in investing activities		(163.4)		(147.9)
FINANCING ACTIVITIES
Proceeds from debt issuances, net of fees		994.8		—
Stock purchase contract fees		(9.8)		(9.8)
Net short-term borrowings (repayments)		2,844.8		(0.7)
Proceeds from issuances of common stock		13.7		64.1
Purchases of common stock for treasury		(2,313.0)		(14.9)
Craftsman contingent consideration		(9.8)		(7.0)
Termination of interest rate swaps		22.7		—
Cash dividends on common stock		(116.3)		(110.1)
Cash dividends on preferred stock		—		(9.4)
Other		(1.7)		(7.2)
Cash provided by (used in) financing activities		1,425.4		(95.0)
Effect of exchange rate changes on cash, cash equivalents and restricted cash		4.8		(38.9)
Change in cash, cash equivalents and restricted cash		25.7		(439.6)
Cash, cash equivalents and restricted cash, beginning of period		294.8		1,398.3
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD		$	320.5	$	958.7


	Year-to-Date
		2022	2021
Denominator (in thousands):
Basic weighted-average shares outstanding		155,433	157,490
Dilutive effect of stock contracts and awards		9,980	6,859
Diluted weighted-average shares outstanding		165,413	164,349


	Year-to-Date
		2022	2021
Number of stock options		2,545	1,096


	Year-to-Date 2021
(Millions of Dollars)	Gain (Loss) Recorded in OCI		Classification of Gain (Loss) Reclassified from OCI to Income	Gain (Loss) Reclassified from OCI to Income		Gain (Loss) Recognized in Income on Amounts Excluded from Effectiveness Testing
Interest Rate Contracts	$	52.4	Interest expense	$	(1.1)	$	—
Foreign Exchange Contracts	$	4.3	Cost of sales	$	(3.8)	$	—


(Millions of Dollars)	Year-to-Date 2022 Interest Expense		Year-to-Date 2021 Interest Expense
Total amount in the Consolidated Statements of Operations and Comprehensive Income (Loss) in which the effects of the fair value hedges are recorded	$	54.7	$	47.5
Amortization of gain on terminated swaps	$	(0.1)	$	(0.1)


	April 2, 2022
(Millions of Dollars)	Carrying Amount of Hedged Liability (1)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability

Current Maturities of Long-Term Debt	$	—	Terminated Swaps	$	—
Long-Term Debt	$	533.5	Terminated Swaps	$	(20.4)


	Year-to-Date 2022
(Millions of Dollars)	Total Gain (Loss) Recorded in OCI		Excluded Component Recorded in OCI		Income Statement Classification	Total Gain (Loss) Reclassified from OCI to Income		Excluded Component Amortized from OCI to Income
Forward Contracts	$	2.8	$	0.6	Other, net	$	0.5	$	0.5
Cross Currency Swap	$	(0.8)	$	2.5	Other, net	$	1.5	$	1.5
Non-derivative designated as Net Investment Hedge	$	(0.1)	$	—	Other, net	$	—	$	—


(Millions of Dollars)	Income Statement Classification	Year-to-Date 2022		Year-to-Date 2021
Foreign Exchange Contracts	Other, net	$	0.9	$	(16.1)


(Millions of Dollars)	Currency translation adjustment and other		Unrealized (losses) gains on cash flow hedges, net of tax		Unrealized gains (losses) on net investment hedges, net of tax		Pension (losses) gains, net of tax		Total
Balance - January 1, 2022	$	(1,543.0)	$	(49.8)	$	71.8	$	(324.6)	$	(1,845.6)
Other comprehensive (loss) income before reclassifications	(55.8)		21.5		(1.6)		6.6		(29.3)
Reclassification adjustments to earnings	—		(2.5)		1.5		2.6		1.6
Net other comprehensive (loss) income	(55.8)		19.0		(0.1)		9.2		(27.7)
Balance - April 2, 2022	$	(1,598.8)	$	(30.8)	$	71.7	$	(315.4)	$	(1,873.3)


	Year-to-Date
	Pension Benefits								Other Benefits
	U.S. Plans				Non-U.S. Plans				All Plans
(Millions of Dollars)	2022		2021		2022		2021		2022		2021
Service cost	$	1.6	$	1.3	$	3.9	$	4.2	$	0.1	$	0.1
Interest cost	8.0		5.7		6.0		4.2		0.2		0.2
Expected return on plan assets	(15.1)		(13.7)		(10.2)		(9.9)		—		—
Amortization of prior service cost (credit)	0.2		0.3		(0.2)		(0.2)		—		(0.2)
Amortization of net loss (gain)	1.5		2.3		2.1		3.5		(0.1)		—
Settlement / curtailment loss	—		—		—		0.1		—		—
Net periodic pension (benefit) expense	$	(3.8)	$	(4.1)	$	1.6	$	1.9	$	0.2	$	0.1


(Millions of Dollars)	Total Carrying Value		Level 1		Level 2		Level 3
April 2, 2022
Money market fund	$	12.7	$	12.7	$	—	$	—
Equity Security	$	7.7	$	7.7			$	—
Deferred compensation plan investments	$	23.7	$	23.7	$	—	$	—
Derivative assets	$	29.9	$	—	$	29.9	$	—
Derivative liabilities	$	11.8	$	—	$	11.8	$	—
Contingent consideration liability	$	289.3	$	—	$	—	$	289.3
January 1, 2022
Money market fund	$	11.0	$	11.0	$	—	$	—
Equity Security	$	13.8	$	13.8	$	—	$	—
Deferred compensation plan investments	$	26.2	$	26.2	$	—	$	—
Derivative assets	$	33.1	$	—	$	33.1	$	—
Derivative liabilities	$	8.7	$	—	$	8.7	$	—
Contingent consideration liability	$	288.6	$	—	$	—	$	288.6


(Millions of Dollars)	January 1, 2022		Net Additions		Usage		Currency		April 2, 2022
Severance and related costs	$	28.2	$	51.1	$	(22.8)	$	0.6	$	57.1
Facility closures and asset impairments	3.5		1.6		(2.5)		0.1		2.7
Total	$	31.7	$	52.7	$	(25.3)	$	0.7	$	59.8


(Millions of Dollars)	Term	Maximum Potential Payment		Carrying Amount of Liability
Guarantees on the residual values of leased assets	One to five years	$	89.6	$	—
Standby letters of credit	Up to three years	165.7		—
Commercial customer financing arrangements	Up to six years	69.5		8.7
Total		$	324.8	$	8.7


		GAAP		Acquisition- Related Charges & Other		Non-GAAP
	Gross profit	$	1,305.4	$	88.8	$	1,394.2
	Selling, general and administrative1	960.3		(78.9)		881.4
	Operating profit	345.1		167.7		512.8
	Earnings from continuing operations before income taxes and equity interest	178.5		221.4		399.9
	Income taxes on continuing operations	22.9		29.8		52.7
	Net Earnings from Continuing Operations Attributable to Common Shareowners - Diluted	155.8		191.6		347.4
	Diluted earnings per share of common stock - Continuing operations	$	0.94	$	1.16	$	2.10
1	Includes provision for credit losses


2022	Total Number Of Shares Purchased (a)	Average Price Paid Per Share		Total Number Of Shares Purchased As Part Of A Publicly Announced Plan Or Program	(In Millions) Maximum Number Of Shares That May Yet Be Purchased Under The Program (b)
January 2 - February 5	—	$	—	—	20
February 6 - March 5	12,681,866	154.82		10,756,770	7
March 6 - April 2	47,851	145.10		—	7
Total	12,729,717	$	154.79	10,756,770	7


(4.1)			Tenth Supplemental Indenture, dated as of February 24, 2022, between Stanley Black & Decker, Inc. and The Bank of New York Mellon Trust Company, N.A., as trustee, relating to the 2.300% Notes due 2025 and the 3.000% Notes due 2032 (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

(4.2)			Form of Stanley Black & Decker, Inc.’s 2.300% Notes due 2025 (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

(4.3)			Form of Stanley Black & Decker, Inc.’s 3.000% Notes due 2032 (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

(10.1)			364-Day Credit Agreement, made as of January 26, 2022 among Stanley Black & Decker, Inc., the initial lenders named therein and Citibank, N.A. as administrative agent for the lenders (incorporated by reference to Exhibit 10.1 on the Company’s Current Report on Form 8-K filed on January 28, 2022).

(10.2)			Underwriting Agreement, dated as of February 22, 2022, between Stanley Black & Decker, Inc. and BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Wells Fargo Securities, LLC. (incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K filed on February 24, 2022).

(11)			Statement re-computation of per share earnings (the information required to be presented in this exhibit appears in Note C to the Company’s (Unaudited) Condensed Consolidated Financial Statements set forth in this Quarterly Report on Form 10-Q).

(31)(i)(a)			Certification by Chief Executive Officer pursuant to Rule 13a-14(a).

(i)(b)			Certification by President and Chief Financial Officer pursuant to Rule 13a-14(a).

(32)(i)			Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(ii)			Certification by President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

(101)			The following materials from Stanley Black & Decker Inc.'s Quarterly Report on Form 10-Q for the quarter ended April 2, 2022, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended April 2, 2022 and April 3, 2021; (ii) Condensed Consolidated Balance Sheets at April 2, 2022 and January 1, 2022; (iii) Condensed Consolidated Statements of Cash Flows for the three months ended April 2, 2022 and April 3, 2021; (iv) Consolidated Statements of Changes in Shareowners' Equity for the three months ended April 2, 2022 and April 3, 2021; and (v) Notes to (Unaudited) Condensed Consolidated Financial Statements**.

(104)			The cover page of Stanley Black & Decker Inc.'s Quarterly Report on Form 10-Q for the quarter ended April 2, 2022, formatted in iXBRL (included within Exhibit 101 attachments).


**			Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.



Date:	April 28, 2022	/s/ James M. Loree
		James M. Loree
		Chief Executive Officer


(1)			The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)			The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Donald Allan, Jr.
Donald Allan, Jr.
President and Chief Financial Officer
Date: April 28, 2022