NEW BRITAIN -- In announcing on Thursday that New Britain-based Stanley Black & Decker will permanently layoff about 1,000 employees, James M. Loree, president and CEO of the toolmaking company, said Stanley has had to navigate the economic climate that has resulted from the global pandemic and, despite net sales falling during the second quarter, finished strong.
"We effectively managed through a multitude of challenges during the second quarter to finish with a strong outcome given the environment,” Loree said. “Our team demonstrated agility in the face of changing demand, swiftly implementing appropriate cost reduction actions while also responding to serve a rapidly improving demand picture in Tools & Storage and Security.”
The company hosted a conference call Thursday with investors, during which the layoff of about 1,000 employees was announced. It was also announced that it would be reversing temporary furloughs and hour reductions for about 9,000 other workers.
During the call, Stanley reported that its second quarter revenues totaled $3.1 billion, down 16% from last year. The company noted this was “related to market-driven declines resulting from covid-19.”
Stanley's profits dipped in the second quarter to just under $239 million, or $1.52 per diluted share. That's down 33% from the same period last year.
Tools and Storage net sales declined 16% versus in the second quarter of 2020, compared to the same quarter last year. Industrial net sales declined 20% when comparing the second quarter of 2020 to that of 2019. Security net sales declined 11% in the second quarter of 2020 versus 2019.
"We are delighted with the second quarter performance under the circumstances,” Loree said. “In particular, our ability to deliver against the weak but rapidly improving demand picture while maintaining our $1 billion cost reduction program enabled near peak level operating margin rates in Tools & Storage during a quarter currently believed to be a trough, was very encouraging."
Stanley also said it will be proceeding with its $1 billion cost reduction program that was announced in April, which it expects to deliver $500 million in cost savings this year.
“During the second quarter $175 million of savings were realized, representing a strong start to the program,” the company wrote on its website.
"We are managing through this crisis in a manner to preserve operational flexibility while acting decisively to prepare for and navigate a range of potential demand scenarios,” said Stanley Black & Decker Executive Vice President and CFO Donald Allan Jr. “The team's performance in the second quarter clearly demonstrated our ability to quickly shift to changing demand scenarios while maintaining our focus on our $1 billion cost reduction program. In this uncertain environment, we will maintain this flexible posture as we move forward, keeping our cost reduction and capital deployment plans in place, but preparing to ramp back up to more normalized demand levels.”
“Also,” Allan continued, “new growth opportunities have emerged during this crisis in our Tools & Storage and Security businesses and we will pursue them with targeted investments in the second half of 2020. We remain focused on maintaining a strong operational foundation and balance sheet and we are confident that we will be in a position to benefit from a recovery."
Justin Muszynski can be reached at 860-973-1809 or email@example.com.