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Stanley Black & Decker's (SWK) John Lundgren on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Conference Call


Greg Waybright – Vice President of Investor and Government Relations

John Lundgren – Chairman and Chief Executive Officer

Jim Loree – President and Chief Operating Officer

Don Allan – Senior Vice President and Chief Financial Officer


Jeremie Capron – CLSA

Ken Zener – KeyBanc

Michael Rehaut – JPMorgan

Brett Linzey – Vertical Research Partners

Rich Kwas – Wells Fargo Securities

Tim Wojs – Robert W. Baird

David MacGregor – Longbow Research

Jeff Kessler – Imperial Company

Mike Dahl – Credit Suisse

Robert Barry – Susquehanna

Liam Burke – Wunderlich

Dennis McGill – Zelman


Welcome to the First Quarter 2016 Stanley Black & Decker Incorporated Earnings Conference Call. My name is Kylie and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded.

I will now turn the call over to Vice President of Investor and Government Relations, Greg Waybright. Mr. Waybright, you may begin.

Greg Waybright

Great, thank you, Kylie, and good morning everyone, and thanks for joining us for Stanley Black & Decker’s first quarter 2016 conference call. On the call in addition to myself is John Lundgren, our Chairman and CEO; Jim Loree, our President and COO, and Don Allan, our Senior Vice President and CFO.

Our earnings release which was issued earlier this morning and a supplemental presentation, which we will refer to during the call, are available on the IR section of our website, as well as on our iPhone and iPad apps. And a replay of this morning’s call will also be available beginning at 2 p.m. today. The replay number and the access code are in our press release. This morning John, Jim, and Don will review our first quarter 2016 results and various other matters followed by Q&A session.

And consistent with prior calls, we are going to be sticking with just one question per caller. And as we normally do, we will be making some forward-looking statements during the call. Such statements are based on assumptions of future events that may not prove to be accurate, and as such, they involve risk and uncertainty. It’s therefore possible that actual results may materially differ from any forward-looking statements that we might make today. We direct you to the cautionary statements in the 8-K that we filed with our press release and in our most recent 34 Act filing.

With that I’ll now turn the call over to our Chairman and CEO, John Lundgren.

John Lundgren

Thank you, Greg. Good morning, everybody. Thanks for joining us, and for those of you who have had a chance to look at our earnings release, it should point out that we remain strongly focused on generating above-market organic growth, meaningful operating leverage, and strong free cash flow conversion. We’ve really got a lot of really good news to report on the quarter, as well as some real excitement looking forward. So I’m going to be very quick through some of the highlights, before turning it over to Jim and Don for more granularity and then of course we’ll get on to the Q&A.

Organically, we grew 5% total growth of 2%, the difference being currency. Really robust organic growth in Tools & Storage 8% with significant outperformance in the emerging markets which was nice to see that come back, 9%. Jim will give you a lot more detail on the strong global Tools & Storage performance in just a second. Industrial was down 3%, as we anticipated, and Security was up 1%, as the positive organic growth in Europe continues. It’s a trend that we’ve been very focused on and we’re very pleased to see it carrying on the way it has.