Stanley Black & Decker (NYSE: SWK), New Britain, CT, reported sales for the first quarter 2010 were $1.3 billion. The merger of Stanley Works and Black & Decker was completed March 12, 2010. The financials include Black & Decker operations from March 13-April 3.

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"Since the close of our merger with Black & Decker, the execution of our integration plans has progressed smoothly and we are pleased with our initial success in realizing the operating and financial benefits that made this combination so compelling," Stanley Black & Decker's President and CEO John F. Lundgren said. "We continue to further develop our cost synergy plans and remain confident in meeting or exceeding our original estimate of $350 million in cost synergies.

"Given our track record of successful integrations, the detailed planning that went into our combination with Black & Decker will ensure that our businesses and employees fit together seamlessly, while we remain focused on customer service, productivity and top line growth throughout the company."

For the first quarter, including the roughly one month of Black & Decker earnings, sales per segment were:

• CDIY – $561 million in sales and profit of $83 million
• Security – $414 million in sales and profit of $69 million
• Industrial – $287 million in sales and profit of $38 million

Stanley Black & Decker provided some perspective on the above results, and noted sales trends excluding the Black & Decker results.

Regarding legacy Stanley CDIY operations, unit volume was down 1 percent with modest declines in the U.S. and Europe. Price was -1 percent and currency had a 5 percent positive impact. Excluding one-time charges, segment profit was 14.9 percent due to significantly lower overhead cost structure, slightly lower commodity costs, improved Bostitch profitability and ongoing productivity initiatives associated with SFS.

Security, which now represents the legacy Stanley Security segment as well as the stub period operations from the legacy Black & Decker Hardware and Home Improvement segment (excluding Price Pfister), grew 11 percent, with the entire increase attributable to the addition of Black & Decker revenues. Within the Convergent Security business, recurring monthly revenue grew mid-single digits while installation volume declines slowed. Orders from national accounts showed signs of improvement as customer capital spending constraints began to ease somewhat. The Mechanical Access business experienced volume pressure caused in part by continued weak U.S. commercial construction markets and soft retrofit business, which drove the operating margin rate down in first quarter 2010, partially offset by productivity programs and cost action benefits. The month of March for both businesses showed signs of improving orders and volumes.

Industrial, which now represents the legacy Stanley Industrial segment as well as the operations from the legacy Black & Decker Fastening and Assembly segment (Emhart Teknologies), grew 22 percent versus the prior year. The addition of stub period Black & Decker revenues contributed 16 pts while price was up 1 percent and currency had a 3 percent positive effect. Unit volume was up 2 percent as customer supply chain restocking in many regions of the world was evident. Unit volume in Europe grew 6 percent, which was particularly encouraging. In both Europe and the U.S., sales were, in part, driven by industrial distribution customer restocking. Segment profit improved both sequentially and versus prior year to 13.2 percent, from 11.3 percent in fourth quarter 2009 and 10.4 percent in first quarter 2009, as modest top line growth combined with a significantly reduced overhead cost structure produced strong operating leverage.

Black & Decker Business Performance
Given that Stanley Black & Decker's first quarter results reflect only the Black & Decker stub period, the company has included the following commentary in order to provide a sense of how the legacy Black & Decker businesses performed for the first quarter 2010. (The Price Pfister business has been included in the Hardware & Home Improvement Segment.)

Organic sales in Black & Decker's legacy Power Tools and Accessories segment were up slightly more than 1 percent. Operating margins improved to 10 percent, up from approximately 4 percent in the first quarter 2009 due to successful productivity initiatives, favorable mix and the impact of restructuring actions.

In the U.S. Industrial Products Group, sales increased modestly due to higher sales of cordless and commercial products. Sales increased at a high single-digit rate in the U.S. Consumer Products Group due, in part, to higher sales of the Tradesman line and the outdoor product portfolio. Excluding the positive impact of currency, sales for the entire legacy PT&A segment rose approximately 3 percent in Europe, 11 percent in Latin America and 13 percent in Asia.

Sales in the legacy Hardware and Home Improvement segment increased approximately 12 percent for the quarter. In the U.S. lockset business, sales increased approximately 14 percent due to a successful launch of new mid price point products. Sales in the Price Pfister business increased approximately 9 percent. The legacy segment's operating margin increased to 17 percent from the first quarter 2009 margin of 4 percent.

In the legacy Fastening and Assembly Systems segment, organic sales increased approximately 30 percent for the quarter. Sales to the global automotive industry increased amidst a surge in global automotive production with a favorable mix toward mid- and full- size vehicles particularly in Europe. Sales increased in the industrial business as global industrial production continued to rise. The legacy segment's operating margin increased to approximately 14 percent from 2 percent in first quarter 2009 with the businesses posting double-digit profitability in all regions of the world as the 2009 restructuring actions continued to take hold.

Executive Vice President and COO James M. Loree, said: "As expected, we have not yet begun to fully see the benefits of a recovery in our Security segment, due to its less volatile and longer-cycle nature. Looking forward, we have plans to continue to further strengthen brand support while releasing some exciting new hand and power tool products in 2010 and 2011 that should help increase our market share in these core franchises.

"We have also begun to lay the groundwork for implementing SFS across the Black & Decker businesses which we expect will continue to improve supply chain performance and result in working capital efficiencies in the coming years. This will enhance the combined company's cash flow generation potential and increase the opportunity for reinvestment in growth and diversification as we enjoy the benefits of the eventual cyclical recovery."

Stanley Black & Decker is a diversified global provider of hand tools, power tools and related accessories, mechanical access solutions and electronic security solutions, engineered fastening systems, and more.