Form 10-K (PDF)
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ANNUAL REPORT PURSUANT TO SECTIONS 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 28, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ COMMISSION FILE 1-5224 STANLEY BLACK & DECKER, INC. (Exact Name Of Registrant As Specified In Its Charter) Connecticut 06-0548860 (State Or Other Jurisdiction Of (I.R.S. Employer Incorporation Or Organization) Identification Number) 1000 Stanley Drive New Britain, Connecticut 06053 (Address Of Principal Executive Offices) (Zip Code) 860-225-5111 (Registrant’s Telephone Number) Securities Registered Pursuant To Section 12(b) Of The Act: Title Of Each Class Name Of Each Exchange On Which Registered Common Stock-$2.50 Par Value per Share New York Stock Exchange Securities Registered Pursuant To Section 12(g) Of The Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act of 1933. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer Accelerated filer Non-accelerated filer (Do not check if a smaller reporting company) Smaller reporting company Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes No As of June 28, 2013, the aggregate market values of voting common equity held by non-affiliates of the registrant was $12.4 billion based on the New York Stock Exchange closing price for such shares on that date. On January 24, 2014, the registrant had 155,604,921 shares of common stock outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s definitive proxy statement to be filed pursuant to Regulation 14A within 120 days after the end of the registrant’s fiscal year are incorporated by reference in Part III of the Annual Report on Form 10-K. TABLE OF CONTENTS PART I ITEM 1. BUSINESS............................................................................................................................................... 3 ITEM 1A. RISK FACTORS ...................................................................................................................................... 7 ITEM 1B. UNRESOLVED STAFF COMMENTS ................................................................................................... 15 ITEM 2. PROPERTIES........................................................................................................................................... 15 ITEM 3. LEGAL PROCEEDINGS ........................................................................................................................ 16 ITEM 4. MINE SAFETY DISCLOSURES............................................................................................................ 16 PART II ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.................................................. 16 ITEM 6. SELECTED FINANCIAL DATA............................................................................................................ 18 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS .......................................................... 20 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......................... 41 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........................................................... 41 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE................................................................................................................... 41 ITEM 9A. CONTROLS AND PROCEDURES ........................................................................................................ 42 ITEM 9B. OTHER INFORMATION........................................................................................................................ 42 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE ................................. 43 ITEM 11. EXECUTIVE COMPENSATION............................................................................................................ 45 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS............................................................................................... 45 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE ................................................................................................................................... 46 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES .......................................................................... 46 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES................................................................ 46 SIGNATURES 47 EX-10.18c EX-10.18d EX-12 EX-21 EX-23 EX-24 EX-31.I.A EX-31.I.B EX-32.I EX-32.II 2 FORM 10-K PART I ITEM 1. BUSINESS General Stanley Black & Decker, Inc. ("the Company") was founded in 1843 by Fredrick T. Stanley and incorporated in Connecticut in 1852. In March 2010, the Company completed a merger ("the Merger") with The Black & Decker Corporation (“Black & Decker”), a company founded by S. Duncan Black and Alonzo G. Decker and incorporated in Maryland in 1910. At that time, the Company changed its name from The Stanley Works ("Stanley") to Stanley Black & Decker, Inc. The Company is a diversified global provider of power and hand tools, products and services for various industrial applications, mechanical access solutions (i.e. automatic doors and commercial locking systems), and electronic security and monitoring systems with 2013 consolidated annual revenues of $11.0 billion. The Company is continuing to pursue a diversification strategy that involves industry, geographic and customer diversification to foster sustainable revenue, earnings and cash flow growth. The Company has three primary acquisition growth platforms: Security, Engineered Fastening, and Infrastructure. The Company has made investments in its organic growth initiatives in order to drive growth across all of its businesses, and anticipates the majority of acquisition-related investments being within the three growth platforms previously mentioned. During 2013, the Company elected to place a moratorium on acquisitions to focus on its near-term priorities of operational improvement, deleveraging through improved credit metrics and returning capital to shareholders. Furthermore, two aspects of the Company's vision are to be a consolidator within the tool industry and to increase its presence in emerging markets, with a goal of ultimately generating greater than 20% of annual revenues from these markets. In 2013, approximately 47% of the Company’s annual revenues were generated in the United States, with the remainder largely from Europe (26%), emerging markets (17%) and Canada (5%). Execution of this diversification strategy has resulted in approximately $6.2 billion of acquisitions since 2002 (excluding the Black & Decker merger) and increased brand investment, enabled by cash flow generation and increased debt capacity. The acquisition of Infastech for $826.4 million in February 2013, a 60% controlling share in Jiangsu Guoqiang Tools Co., Ltd. ("GQ") for a total purchase price of $48.5 million in May 2013, and the 2011 acquisition of Niscayah Group AB (“Niscayah”) for a total purchase price of $984.5 million exemplify this strategy. Infastech is a global manufacturer and distributor of specialty engineered fastening technology based in Hong Kong. The acquisition of Infastech adds to the Company's strong positioning in specialty engineered fastening, an industry with solid growth prospects particularly in the global electronics, industrial and automotive end markets, and will further expand the Company's global footprint with