STANLEY BLACK & DECKER, INC.

Stanley Black & Decker, Inc. is a global provider of hand tools, power tools, outdoor products and related accessories, as well as a leading provider of engineered fastening solutions, with 2025 consolidated annual revenues of $15.1 billion ¹. Approximately 62% of the Company's 2025 revenues were generated in the United States, with the remainder largely from Europe (16%), emerging markets (13%) and Canada (4%) ². The Company's operations are classified into two reportable business segments: Tools & Outdoor and Engineered Fastening. The Tools & Outdoor segment is comprised of the Power Tools Group, Hand Tools, Accessories & Storage, and Outdoor Power Equipment product lines, and is a worldwide leader in the tools and outdoor markets carrying iconic brands including DEWALT, CRAFTSMAN, STANLEY, BLACK+DECKER and CUB CADET. The Engineered Fastening segment is a global leader of highly engineered, application-based solutions, primarily selling highly engineered components such as fasteners, fittings and various engineered products designed for specific applications across multiple verticals including automotive, manufacturing, electronics, construction, and aerospace industries.

The Company encounters active competition in the Tools & Outdoor and Engineered Fastening segments from both larger and smaller companies that offer the same or similar products and services or that produce different products appropriate for the same uses. Certain large customers offer private label brands that compete across a wide spectrum of the Company's Tools & Outdoor segment product offerings. The Company competes on the basis of its reputation for innovation and product quality, its well-known brands, its commitment to customer service, its strong customer relationships, the breadth of its product lines focused on core end-user segments, and customer value propositions. The Home Depot accounted for approximately 15% and 14% of the Company's consolidated net sales in 2025 and 2024, respectively, while Lowe's accounted for approximately 12% and 14% of the Company's consolidated net sales in 2025 and 2024, respectively ³. No other customer exceeded 10% of the Company's consolidated net sales in 2025 or 2024.

The Company generates revenue through the sale of goods or services, reflecting the consideration to which it expects to be entitled. The majority of the Company's revenues are recorded at a point in time from the sale of tangible products. The Tools & Outdoor segment sells its products to professional end users, distributors, independent dealers, retail consumers and industrial customers in a wide variety of industries and geographies, with the majority of sales distributed through retailers, including home centers, mass merchants, hardware stores, and retail lumber yards, as well as third-party distributors, independent dealers, and a direct sales force. The Engineered Fastening segment sells to customers in the automotive, manufacturing, electronics, construction, and aerospace industries, amongst others, and its products are distributed through a direct sales force and, to a lesser extent, third-party distributors.

The Tools & Outdoor segment is comprised of the Power Tools Group, Hand Tools, Accessories & Storage, and Outdoor Power Equipment product lines. Annual revenues in the Tools & Outdoor segment were $13.2 billion in 2025, representing 87% of the Company's total revenues ⁴. The PTG product line includes both professional and consumer products, with professional products primarily under the DEWALT brand including professional grade corded and cordless electric power tools and equipment, and DIY and tradesperson focused products sold primarily under the CRAFTSMAN and STANLEY brands, and consumer home products primarily under the BLACK+DECKER brand. The HTAS product line sells hand tools, power tool accessories and storage products primarily under the DEWALT, CRAFTSMAN and STANLEY brands. The Outdoor product line primarily sells corded and cordless electric lawn and garden products and gas powered lawn and garden products to professionals and consumers primarily under the DEWALT, CRAFTSMAN, CUB CADET, BLACK+DECKER, and HUSTLER brand names.

The Engineered Fastening segment is comprised of the Engineered Fastening business and included the Infrastructure business prior to its sale in April 2024. Annual revenues in the Engineered Fastening segment were $2.0 billion in 2025, representing 13% of the Company's total revenues ⁵. The Engineered Fastening business primarily sells highly engineered components such as fasteners, fittings and various engineered products, which are designed for specific applications across multiple verticals. The product categories include externally threaded fasteners, blind rivets and tools, blind inserts and tools, drawn arc weld studs and systems, engineered plastic and mechanical fasteners, self-piercing riveting systems, precision nut running systems, micro fasteners, high-strength structural fasteners, axel swage, latches, heat shields, pins, and couplings.

In April 2024, the Company sold its Infrastructure business, comprised of the attachment and handheld hydraulic tools business, for net proceeds of $729 million ⁶. In December 2025, the Company announced that it had entered into a definitive agreement to sell its Consolidated Aerospace Manufacturing business for $1.8 billion in cash ⁷. In mid-2022, the Company initiated a Global Cost Reduction Program designed to achieve $2.0 billion of pre-tax run-rate cost savings by optimizing its cost base across its supply chain and SG&A functions ⁸. The Company completed this program as of the end of 2025 and generated approximately $2.1 billion of pre-tax run-rate savings, exceeding the original program target ⁹. In 2025, the Company recognized a $108.4 million pre-tax, non-cash impairment charge driven by updates to the Company's brand prioritization strategy impacting the Lenox, Troy-Bilt, and Irwin trade names ¹⁰. During 2025, the Company recognized net restructuring charges of approximately $89 million, primarily driven by severance costs and certain related pension charges associated with reorganizations of the Company's corporate and support functions and supply chain resources, as well as facility exit costs related to footprint actions associated with the supply chain transformation ¹¹. The Company increased its annual dividend per common share by $0.04 in 2025 compared to 2024 ¹². In July 2025, the Company raised the quarterly dividend per common share, its 58th annual consecutive increase ¹³.

Net sales were $15.130 billion in 2025 compared to $15.366 billion in 2024, representing a decrease of 2% ¹⁴. Net earnings from continuing operations were $401.9 million in 2025 compared to $286.3 million in 2024 ¹⁵. Diluted earnings per share from continuing operations were $2.65 in 2025 compared to $1.89 in 2024 ¹⁶. Gross profit was $4.588 billion, or 30.3% of net sales, in 2025 compared to $4.514 billion, or 29.4% of net sales, in 2024 ¹⁷. Cash flows provided by operations were $971.2 million in 2025 compared to $1,106.9 million in 2024 ¹⁸. Free cash flow was $687.9 million in 2025 and $753.0 million in 2024 ¹⁹.

The Company's planning assumptions for 2026 are for diluted earnings per share on a GAAP basis to be $3.15 to $4.35 and for diluted earnings per share excluding Non-GAAP adjustments to be $4.90 to $5.70, which reflects year-over-year growth of 42% and 13%, respectively, at the midpoint of each range ²⁰. The Company is targeting free cash flow to be in the range of $700 to $900 million, reflecting an increase of 16% at the midpoint ²¹. These underlying planning assumptions include results of the CAM business for the first half of 2026 and the tariff landscape as of January 2026. The difference between the planning assumptions for 2026 diluted earnings per share on a GAAP basis and diluted earnings per share excluding Non-GAAP adjustments is approximately $1.35 to $1.75, consisting primarily of charges related to footprint actions and other cost actions ²².

The Company's long-term financial targets, which are based on the tariff landscape as of January 2026, are expected to be reflected in the Company's 2028 financial results and assume that the Company's markets are growing by low-single digits and inflation approximates 2% per year. These targets include mid-single digit organic revenue growth, 35% to 37% adjusted gross margins with mid to high-teens adjusted EBITDA margin, free cash flow approximating 100% of GAAP net income over a multi-year period, CFROI in the low-to-mid-teens by 2028 and greater than or equal to the mid-teens beyond 2028, and a solid investment grade credit rating ²³. The Company's core franchises operate in markets which the Company believes possess attractive long-term growth characteristics, competitive structures where brand and innovation influence outcomes, and the ability to scale globally while generating strong cash flow. The Tools & Outdoor segment is a global growth platform anchored by leading brands, differentiated innovation, and broad channel reach, with priority global brands including DEWALT, CRAFTSMAN, and STANLEY, supported by a broader portfolio of complementary brands. The Engineered Fastening segment serves end markets with GDP-plus growth profiles, benefiting from recurring revenue characteristics, durable customer relationships, and global scale, supporting attractive profitability and cash generation.

The Company's guiding principles and actions executed in response to tariffs include serving its end users and customers during a dynamic period, minimizing cost increases through supply chain moves with a focus on leveraging the Company's North American footprint and reducing China production for the United States by the end of 2026 or early 2027, implementing price increases in 2025 with a long-term perspective and to protect cash flow, and continuing to proactively engage with the U.S. administration. The Company is continuing to execute its plan with the objective to safeguard gross margins and position the business for success with a focus on achieving its long-term financial objectives.

The Company expects to achieve annual net cost savings of approximately $188 million by the end of 2026 related to the restructuring costs incurred during 2025 ²⁴. The majority of the $48 million of reserves remaining as of January 3, 2026 is expected to be utilized within the next twelve months ²⁵. The Company expects to incur additional charges and make cash investments in 2026 relating to footprint actions to support the ongoing network transformation and reposition its supply chain, as necessary. The Company has reduced inventory by over $2 billion since the end of the second quarter of 2022 and expects further working capital reductions to support free cash flow generation in 2026 ²⁶. The Company expects funding obligations on its defined benefit plans to be approximately $29 million in 2026 ²⁷.

In terms of capital allocation, the Company's top priority is funding organic growth investments that drive long-term value. The Company also remains committed, over time, to maintaining a strong and growing dividend and has a preference toward opportunistic share repurchases. In the near-term, the Company intends to utilize the net proceeds from the pending CAM divestiture to reduce debt. Cash proceeds, net of tax and fees, from the CAM sale are expected to be in the range of $1.525 billion to $1.6 billion, which the Company expects to utilize to reduce debt ²⁸. Research and development costs were $321.4 million and $328.8 million for fiscal years 2025 and 2024, respectively, or 2.1% of net sales in both years ²⁹. Capital and software expenditures were $283.3 million in 2025 ³⁰. The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars ³¹. As of January 3, 2026, the Company had $605.6 million of borrowings outstanding ³². The Company has a five-year $2.25 billion committed credit facility and a $1.25 billion syndicated 364-day credit agreement ³³. No amounts were outstanding against any of these facilities on January 3, 2026 ³⁴. As of January 3, 2026, the Company had $5.3 billion principal amount of indebtedness ³⁵.

The Company faces headwinds from the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements. In 2025, the U.S. government announced a series of tariffs on imported goods into the U.S., which prompted retaliatory actions from some of its trading partners, and in response, the Company introduced strategies to mitigate the impacts of these changes on its results of operations, including price increases and supply chain adjustments. In April 2025, China imposed export restrictions on certain rare earth minerals that are used in certain components of the Company's products, which resulted in delays and shortages of certain components. The Company sources materials from South Korea, China, Taiwan and Israel, among other countries, and any future tensions or conflicts in such regions could cause material disruptions in the Company's supply chain. The Company generates approximately 38% of its revenues outside the U.S., including 16% from Europe and 13% from various emerging market countries, and uncertainty about the financial stability of economies outside the U.S. could have a significant adverse effect on the Company's business, results of operations and financial condition ³⁶.

The Company's business is subject to risks associated with the global trade environment, including tariffs implemented by the U.S. government under Section 301 of the Trade Act of 1974, and in April 2025, China imposed export restrictions on certain rare earth minerals that resulted in delays and shortages of certain components. The Company's two largest customers, The Home Depot and Lowe's, comprised approximately 27% of consolidated net sales in 2025, and the loss or material reduction of business with these customers could have a material adverse impact ³⁷. As of January 3, 2026, the Company has approximately $7.3 billion of goodwill and approximately $2.3 billion of indefinite-lived trade names, and during 2025 recognized a $108.4 million pre-tax, non-cash impairment charge driven by updates to the Company's brand prioritization strategy impacting the Lenox, Troy-Bilt, and Irwin trade names ³⁸. The Company has $5.3 billion principal amount of indebtedness as of January 3, 2026, and must maintain an interest coverage ratio of not less than 3.50 to 1.00, provided that the Company is only required to maintain an interest coverage ratio of not less than 2.50 to 1.00 for any four fiscal quarter period ending on or before the end of the Company's second fiscal quarter of 2026 ³⁹. The Company is exposed to credit risk on its accounts receivable, with outstanding trade receivables not generally covered by collateral or credit insurance, and as of January 3, 2026, the range of environmental remediation costs that is reasonably possible is $179.1 million to $395.7 million ⁴⁰.

Management's message emphasizes the Company's mission to build a world-class branded industrial company by solving end users' most pressing and complex challenges, anchored by three core imperatives: activating brands with purpose, driving operational excellence, and accelerating innovation. Management highlights that the Company has a strengthened foundation and a more streamlined, focused organization, positioned to drive performance towards its long-term financial targets. The Company's planning assumptions for 2026 are for diluted earnings per share on a GAAP basis to be $3.15 to $4.35 and for diluted earnings per share excluding Non-GAAP adjustments to be $4.90 to $5.70 ⁴¹. The Company is targeting free cash flow to be in the range of $700 to $900 million ⁴². Management's strategic priorities include funding organic growth investments that drive long-term value, maintaining a strong and growing dividend over time, and utilizing the net proceeds from the pending CAM divestiture to reduce debt in the near-term. Management also emphasizes the completion of the Global Cost Reduction Program, which generated approximately $2.1 billion of pre-tax run-rate savings, exceeding the original program target of $2.0 billion ⁴³.