STANLEY BLACK & DECKER, INC.

Previous wording

In April 2021, the Board of Directors approved repurchases by the Company of its outstanding securities, other than its common stock, up to an aggregate amount of $3.0 billion, of which $2.25 billion remains available for future repurchases as of June 28, 2025. No repurchases have been executed pursuant to this authorization in the first half of 2025.

Current wording

In April 2021, the Board of Directors approved repurchases by the Company of its outstanding securities, other than its common stock, up to an aggregate amount of $3.0 billion (the “April 2021 Authorization”). Repurchases of $1.1 billion were made under the April 2021 Authorization, and as of September 27, 2025, $1.9 billion remained available for future repurchases under the April 2021 Authorization. In October 2025, the Board of Directors terminated the April 2021 Authorization including any amounts remaining available for repurchase thereunder, and approved repurchases by the Company of its outstanding securities, other than its common stock, up to an aggregate amount of $3.0 billion. No repurchases have been executed pursuant to this authorization to date.

Previous wording

During the first six months of 2025 and since inception of the program, the Company has generated approximately $280 million and $1.8 billion, respectively, of pre-tax run-rate savings, driven by lower headcount, indirect spend reductions and the supply chain transformation. These savings are comprised of supply chain efficiency benefits, which support gross margin improvements as the benefits turn through inventory, and SG&A savings. The Company believes that it is on track to grow to approximately $2 billion of pre-tax run-rate savings by year-end 2025.

Current wording

During the first nine months of 2025 and since inception of the program, the Company has generated approximately $400 million and $1.9 billion, respectively, of pre-tax run-rate savings, driven by lower headcount, indirect spend reductions and the supply chain transformation. These savings are comprised of supply chain efficiency benefits, which support gross margin improvements as the benefits turn through inventory, and SG&A savings. The Company believes that it is on track to grow to approximately $2 billion of pre-tax run-rate savings by year-end 2025.

Previous wording

The Company’s operating results at the consolidated level as discussed below include and exclude certain gains and charges impacting gross profit, SG&A, Other, net, and Income taxes. The Company’s business segment results as discussed below include and exclude certain gains and charges impacting gross profit and SG&A. Corporate overhead as discussed below includes and excludes certain gains and charges. These amounts for the second quarter and year-to-date periods of 2025 and 2024 are as follows:

Current wording

The Company’s operating results at the consolidated level as discussed below include and exclude certain gains and charges impacting gross profit, SG&A, Other, net, and Income taxes. The Company’s business segment results as discussed below include and exclude certain gains and charges impacting gross profit and SG&A. Corporate overhead as discussed below includes and excludes certain gains and charges. These amounts for the third quarter and year-to-date periods of 2025 and 2024 are as follows:

Previous wording

Below is a summary of the pre-tax Non-GAAP adjustments for the second quarter and year-to-date periods of 2025 and 2024.

Current wording

Below is a summary of the pre-tax Non-GAAP adjustments for the third quarter and year-to-date periods of 2025 and 2024.

Previous wording

Net sales were $7.690 billion in the first half of 2025 compared to $7.894 billion in the first half of 2024, representing a decrease of 3% as a 1% increase in price was more than offset by a 2% decrease in volume, a 1% decrease from the Infrastructure divestiture, and a 1% decrease from foreign currency. Tools & Outdoor net sales decreased 1% compared to the first half of 2024 as a 2% decrease in volume was partially offset by a 1% increase in price. Engineered Fastening net sales decreased 12% compared to the first half of 2024 as a 2% decrease in volume, a 9% decrease from the Infrastructure divestiture, and a 2% decrease from a product line transfer to Tools & Outdoor was partially offset by a 1% increase in price.

Current wording

Net sales were $11.446 billion in the first nine months of 2025 compared to $11.645 billion in the first nine months of 2024, representing a decrease of 2% as a 2% increase in price was more than offset by a 3% decrease in volume and a 1% decrease from the Infrastructure divestiture. Tools & Outdoor net sales decreased 1% compared to the first nine months of 2024 as a 2% increase in price was more than offset by a 3% decrease in volume. Engineered Fastening net sales decreased 8% compared to the first nine months of 2024 as a 1% increase in price was more than offset by a 6% decrease from the Infrastructure divestiture and a 3% decrease from a product line transfer to Tools & Outdoor.

Previous wording

Cost of Sales and Gross Profit: The Company reported cost of sales of $2.879 billion in the second quarter of 2025 compared to $2.883 billion in the second quarter of 2024. The year-over-year change in cost of sales was primarily driven by lower volume and the supply chain transformation efficiencies partially offset by the impact from tariffs. Gross profit, defined as sales less cost of sales, was $1.067 billion, or 27.0% of net sales, in the second quarter of 2025 compared to $1.141 billion, or 28.4% of net sales, in the second quarter of 2024. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $20.0 million for the three months ended June 28, 2025 and $33.5 million for the three months ended June 29, 2024. Excluding these adjustments, gross profit was 27.5% of net sales, for the three months ended June 28, 2025, compared to 29.2% of net sales, for the three months ended June 29, 2024. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales was primarily due to a 3 point gross impact from tariffs and lower volume partially offset by the supply chain efficiencies and the initial benefits from price actions taken during the second quarter of 2025.

Current wording

Cost of Sales and Gross Profit: The Company reported cost of sales of $2.577 billion in the third quarter of 2025 compared to $2.631 billion in the third quarter of 2024. The year-over-year change in cost of sales was primarily driven by lower volume and the supply chain transformation efficiencies, partially offset by the impact from tariffs and inflation. Gross profit, defined as sales less cost of sales, was $1.179 billion, or 31.4% of net sales, in the third quarter of 2025 compared to $1.121 billion, or 29.9% of net sales, in the third quarter of 2024. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $8.0 million, or 0.2% of net sales, for the three months ended September 27, 2025 and $24.8 million, or 0.6% of net sales, for the three months ended September 28, 2024. Excluding these adjustments, gross profit was 31.6% of net sales, for the three months ended September 27, 2025, compared to 30.5% of net sales, for the three months ended September 28, 2024. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales was primarily due to benefits from pricing strategies and supply chain transformation efficiencies, partially offset by tariffs, lower volume and inflation.

Previous wording

The Company reported cost of sales of $5.503 billion in the first half of 2025 compared to $5.644 billion in the first half of 2024. The year-over-year change in cost of sales was primarily driven by the same factors discussed above that impacted the second quarter of 2025. Gross profit, defined as sales less cost of sales, was $2.187 billion, or 28.4% of net sales, in the first half of 2025 compared to $2.250 billion, or 28.5% of net sales, in the first half of 2024. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $36.7 million for the six months ended June 28, 2025 and $47.9 million for the six months ended June 29, 2024. Excluding these adjustments, gross profit was 28.9% of net sales, for the six months ended June 28, 2025, compared to 29.1% of net sales, for the six months ended June 29, 2024. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales was primarily due to the impact from tariffs and lower volume partially offset by the supply chain efficiencies and the initial benefits from price actions taken during the second quarter of 2025.

Current wording

The Company reported cost of sales of $8.079 billion in the first nine months of 2025 compared to $8.275 billion in the first nine months of 2024. The year-over-year change in cost of sales was primarily driven by the same factors discussed above that impacted the third quarter of 2025. Gross profit, defined as sales less cost of sales, was $3.366 billion, or 29.4% of net sales, in the first nine months of 2025 compared to $3.370 billion, or 28.9% of net sales, in the first nine months of 2024. Non-GAAP adjustments, which increased cost of sales and reduced gross profit, were $44.7 million, or 0.4% of net sales, for the nine months ended September 27, 2025 and $72.7 million, or 0.7% of net sales, for the nine months ended September 28, 2024. Excluding these adjustments, gross profit was 29.8% of net sales, for the nine months ended September 27, 2025, compared to 29.6% of net sales, for the nine months ended September 28, 2024. The year-over-year change in gross profit as a percent of sales and adjusted gross profit as a percent of sales was primarily driven by the same factors discussed above that impacted the third quarter of 2025.

Previous wording

SG&A, inclusive of the provision for credit losses, was $1.740 billion, or 22.6% of net sales, in the first half of 2025, compared to $1.680 billion, or 21.3% of net sales, in the first half of 2024. Within SG&A, Non-GAAP adjustments totaled $74.6 million for the six months ended June 28, 2025 and $47.7 million for the six months ended June 29, 2024. Excluding these adjustments, SG&A was 21.7% of net sales for the six months ended June 28, 2025, compared to 20.7% for the six months ended June 29, 2024. The year-over-year change in SG&A as a percent of sales and adjusted SG&A as a percent of sales was driven by the same factors discussed above that impacted the second quarter of 2025.

Current wording

Selling, general and administrative: SG&A, inclusive of the provision for credit losses, was $791.0 million, or 21.1% of net sales, in the third quarter of 2025, compared to $797.1 million, or 21.2% of net sales, in the third quarter of 2024. Within SG&A, Non-GAAP adjustments totaled $4.1 million, or 0.1% of net sales, for the three months ended September 27, 2025 and $15.1 million, or 0.4% of net sales, for the three months ended September 28, 2024. Excluding these adjustments, SG&A was 21.0% of net sales for the three months ended September 27, 2025, compared to 20.8% for the three months ended September 28, 2024. SG&A as a percent of sales and adjusted SG&A as a percent of sales are relatively flat year-over-year, as the Company continues to fund growth investments while exercising disciplined and targeted cost management.

Previous wording

SG&A Expenses: SG&A, inclusive of the provision for credit losses, was $873.1 million, or 22.1% of net sales, in the second quarter of 2025, compared to $828.6 million, or 20.6% of net sales, in the second quarter of 2024. Within SG&A, Non-GAAP adjustments totaled $52.6 million for the three months ended June 28, 2025 and $27.6 million for the three months ended June 29, 2024. Excluding these adjustments, SG&A was 20.8% of net sales for the three months ended June 28, 2025, compared to 19.9% for the three months ended June 29, 2024. The year-over-year change in SG&A as a percent of sales and adjusted SG&A as a percent of sales was driven by growth investments, which were partially offset by cost control.

Current wording

SG&A, inclusive of the provision for credit losses, was $2.531 billion, or 22.1% of net sales, in the first nine months of 2025, compared to $2.478 billion, or 21.3% of net sales, in the first nine months of 2024. Within SG&A, Non-GAAP adjustments totaled $78.7 million, or 0.7% of net sales, for the nine months ended September 27, 2025 and $62.8 million, or 0.6% of net sales, for the nine months ended September 28, 2024. Excluding these adjustments, SG&A was 21.4% of net sales for the nine months ended September 27, 2025, compared to 20.7% for the nine months ended September 28, 2024. The year-over-year change in SG&A as a percent of sales and adjusted SG&A as a percent of sales was driven by growth investments, which were partially offset by targeted cost management.

Previous wording

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable. Such distribution costs classified in SG&A amounted to $131.1 million and $260.1 million for the three and six months ended June 28, 2025, respectively, and $131.8 million and $262.3 million for the three and six months ended June 29, 2024, respectively.

Current wording

Distribution center costs (i.e. warehousing and fulfillment facility and associated labor costs) are classified within SG&A. This classification may differ from other companies who may report such expenses within cost of sales. Due to diversity in practice, to the extent the classification of these distribution costs differs from other companies, the Company’s gross margins may not be comparable. Such distribution costs classified in SG&A amounted to $130.3 million and $390.4 million for the three and nine months ended September 27, 2025, respectively, and $134.4 million and $396.7 million for the three and nine months ended September 28, 2024, respectively.

Previous wording

Other, net: Other, net totaled $67.7 million in the second quarter of 2025 compared to $226.5 million in the second quarter of 2024, which included a $142.3 million environmental remediation reserve adjustment related to the Centredale site. The remaining year-over-year decrease is primarily driven by lower intangible asset amortization. Excluding Non-GAAP adjustments, Other, net totaled $76.1 million and $78.1 million in the second quarter of 2025 and 2024, respectively.

Current wording

Other, net: Other, net totaled $72.2 million in the third quarter of 2025 compared to $86.4 million in the third quarter of 2024. Excluding Non-GAAP adjustments, Other, net totaled $67.9 million and $89.4 million in the third quarter of 2025 and 2024, respectively. The year-over-year decrease in Other, net, both inclusive and exclusive of Non-GAAP adjustments, is primarily driven by lower environmental remediation costs and lower intangible asset amortization.

Previous wording

Other, net totaled $115.2 million and $306.5 million in the first six months of 2025 and 2024, respectively. The year-over-year decrease was primarily driven by the same factors discussed above that impacted the second quarter of 2025 and 2024. Excluding Non-GAAP adjustments, Other, net totaled $132.3 million and $161.6 million for the first six months of 2025 and 2024, respectively, primarily driven by the net appreciation of certain investments in the first half of 2025 compared to write-downs on certain investments in the first half of 2024, as well as lower environmental remediation costs and lower intangible asset amortization.

Current wording

Other, net totaled $187.4 million in the first nine months of 2025 and $392.9 million in the first nine months of 2024. The year-over-year decrease is primarily driven by a $142.3 million environmental remediation reserve adjustment related to the Centredale site and write-downs on certain investments in 2024, as well as lower intangible asset amortization in 2025. Excluding Non-GAAP adjustments, Other, net totaled $200.2 million and $251.0 million for the first nine months of 2025 and 2024, respectively. The year-over-year decrease in Other, net, excluding Non-GAAP adjustments, is primarily driven by lower environmental remediation costs and intangible asset amortization in 2025, and write-downs on certain investments in 2024.

Previous wording

Loss on Sale of Business: During the first half of 2025, the Company reported a pre-tax loss of $0.3 million related to the divestiture of small business in the Engineered Fastening segment.

Current wording

Loss on Sale of Business: During the first nine months of 2025, the Company reported a pre-tax loss of $0.3 million related to the divestiture of a small business in the Engineered Fastening segment.

Previous wording

Asset Impairment Charge: During the first half of 2024, the Company recorded a pre-tax impairment charge of $25.5 million related to the Infrastructure business. Refer to Note Q, Divestitures, for additional information on the divestiture of the Infrastructure business completed in the second quarter of 2024.

Current wording

During the third quarter of 2024, the Company recorded pre-tax, non-cash asset impairment charges of $46.9 million primarily related to the Lenox trade name. During the first quarter of 2024, the Company recorded a pre-tax impairment charge of $25.5 million related to the Infrastructure business.

Previous wording

Interest, net: Net interest expense was $80.2 million in the second quarter of 2025 compared to $78.4 million in the second quarter of 2024. On a year-to-date basis, net interest expense was $157.4 million in 2025 and $166.3 million in 2024, primarily driven by higher interest income.

Current wording

Interest, net: Net interest expense was $79.1 million in the third quarter of 2025 compared to $78.6 million in the third quarter of 2024. On a year-to-date basis, net interest expense was $236.5 million in 2025 and $244.9 million in 2024, primarily driven by higher interest income.

Previous wording

Income Taxes: For the three and six months ended June 28, 2025, the Company recognized an income tax benefit of $75.2 million and $38.0 million, respectively, resulting in effective tax rates of (281.6)% and (24.6)%, respectively. Excluding the tax effect on Non-GAAP adjustments, for the three and six months ended June 28, 2025, the Company recognized an income tax benefit of $53.4 million and $8.7 million, respectively, resulting in effective tax rates of (48.7)% and (3.2)%, respectively. These effective tax rates for the three and six months ended June 28, 2025 differ from the U.S. statutory tax rate of 21% primarily due to the remeasurement of uncertain tax positions, partially offset by non-deductible expenses.

Current wording

Income Taxes: For the three and nine months ended September 27, 2025, the Company recognized an income tax benefit of $15.8 million and $53.8 million, respectively, resulting in effective tax rates of (44.4)% and (28.3)%, respectively. Excluding the tax effect on Non-GAAP adjustments, for the three and nine months ended September 27, 2025, the Company recognized income tax expense of $35.5 million and $26.8 million, respectively, resulting in effective tax rates of 14.0% and 5.1%, respectively. These effective tax rates for the three and nine months ended September 27, 2025 differ from the U.S. statutory tax rate of 21% primarily due to the remeasurement of uncertain tax positions, partially offset by non-deductible expenses.

Previous wording

For the three and six months ended June 29, 2024, the Company recognized an income tax benefit of $2.9 million and income tax expense of $25.9 million, respectively, resulting in effective tax rates of 13.1% and 98.9%, respectively. Excluding the tax effect on Non-GAAP adjustments, for the three and six months ended June 29, 2024, the Company recognized income tax expense of $52.7 million and $88.3 million, respectively, resulting in effective tax rates of 24.3% and 26.2%, respectively. These effective tax rates for the three and six months ended June 29, 2024 differ from the U.S. statutory tax rate of 21% primarily due to non-deductible expenses, losses for which a tax benefit is not recognized, and U.S. tax on foreign earnings, partially offset by the remeasurement of uncertain tax positions, tax credits, and state income taxes.

Current wording

For the three and nine months ended September 28, 2024, the Company recognized an income tax benefit of $1.6 million and income tax expense of $24.3 million, respectively, resulting in effective tax rates of (1.8)% and 21.0%, respectively. Excluding the tax effect on Non-GAAP adjustments, for the three and nine months ended September 28, 2024, the Company recognized income tax expense of $10.4 million and $98.7 million, respectively, resulting in effective tax rates of 5.3% and 18.5%, respectively. These effective tax rates for the three months ended September 28, 2024 differ from the U.S. statutory tax rate of 21% primarily due to the recognition of previously unrecognized foreign deferred tax assets, remeasurement of uncertain tax positions, tax credits, and state income taxes, partially offset by non-deductible expenses and U.S. tax on foreign earnings. For the nine months ended September 28, 2024, the primary drivers are consistent with those discussed above, which in aggregate result in effective tax rates that approximate the U.S. statutory tax rate of 21%.

Previous wording

Tools & Outdoor net sales decreased $67.3 million, or 2%, in the second quarter of 2025 compared to the second quarter of 2024 as a 5% decrease in volume was partially offset by a 2% increase in price and a 1% increase from foreign currency. Organic revenue decreased 3%, largely due to a slow outdoor buying season and tariff-related shipment disruptions that were partially offset by price and continued DEWALT® professional growth. Total revenue decreased 4% in North America, increased 5% in Europe, and decreased 2% in the rest of the world. Excluding the impact from foreign currency, organic revenue decreased 4% and 1% in North America and Europe, respectively, and increased 1% in the rest of the world.

Current wording

Tools & Outdoor net sales decreased $7.8 million in the third quarter of 2025 compared to the third quarter of 2024 as a 5% increase in price, a 1% increase from foreign currency, and a 1% increase from a product line transfer from Engineered Fastening were offset by a 7% decrease in volume. Organic revenue decreased 2%, driven by expected tariff related promotional reductions and a soft consumer backdrop, partially offset by continued DEWALT® growth. Total revenue decreased 2% in North America, increased 6% in Europe, and decreased 1% in the rest of the world. Excluding the impact from foreign currency, organic revenue decreased 2% in North America, remained flat in Europe, and decreased 1% in the rest of the world.

Previous wording

Tools & Outdoor net sales decreased $71.0 million, or 1%, in the first half of 2025 compared to the first half of 2024 as a 2% decrease in volume was partially offset by a 1% increase in price. Total revenue decreased 1% in North America, increased 1% in Europe, and decreased 5% in the rest of the world. Excluding the impact from foreign currency, organic revenue decreased 1% in North America, Europe, and in the rest of the world.

Current wording

Tools & Outdoor net sales decreased $78.8 million, or 1%, in the first nine months of 2025 compared to the first nine months of 2024 as a 2% increase in price was more than offset by a 3% decrease in volume. Total revenue decreased 1% in North America, increased 3% in Europe, and decreased 4% in the rest of the world. Excluding the impact from foreign currency, organic revenue decreased 1% in all regions.

Previous wording

Segment profit for the second quarter of 2025 was $238.1 million, or 6.9% of net sales, compared to $316.1 million, or 9.0% of net sales, in the second quarter of 2024. Excluding Non-GAAP adjustments, which primarily related to a voluntary retirement program in 2025 and footprint actions associated with the supply chain transformation in both periods, of $38.4 million and $52.6 million for the three months ended June 28, 2025 and June 29, 2024, respectively, segment profit was 8.0% of net sales in the second quarter of 2025 and 10.4% of net sales in the second quarter of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were primarily due to the impact from tariffs, lower volume, and investments in growth initiatives, partially offset by the supply chain transformation efficiencies, price and cost control.

Current wording

Segment profit for the first nine months of 2025 was $910.5 million, or 9.1% of net sales, compared to $899.3 million, or 8.9% of net sales, in the first nine months of 2024. Excluding Non-GAAP adjustments, which primarily related to a voluntary retirement program in 2025 and footprint actions associated with the supply chain transformation in both periods, of $70.2 million, or 0.7% of net sales, and $111.0 million, or 1.1% of net sales, for the nine months ended September 27, 2025 and September 28, 2024, respectively, segment profit was 9.8% of net sales in the first nine months of 2025 and 10.0% of net sales in the first nine months of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit was relatively flat as the impact of supply chain transformation efficiencies, price and cost control were offset by the impact from tariffs, lower volume, and investments in growth initiatives.

Previous wording

Engineered Fastening net sales decreased $11.9 million, or 2%, in the second quarter of 2025 compared to the second quarter of 2024, as a 2% decrease in volume and a 3% decrease from a product line transfer to the Tools & Outdoor segment was partially offset by a 1% increase in price and 2% increase from foreign currency. Engineered Fastening organic revenues decreased 1%, as strength in aerospace was more than offset by declines in industrial and automotive.

Current wording

Engineered Fastening net sales decreased $120.6 million, or 8%, in the first nine months of 2025 compared to the first nine months of 2024, as a 1% increase in price was more than offset by a 6% decrease from the Infrastructure divestiture and a 3% decrease from a product line transfer to Tools & Outdoor. Engineered Fastening organic revenues increased 1%, driven by strength in aerospace, partially offset by declines in industrial and automotive.

Previous wording

Engineered Fastening segment profit for the first half of 2025 totaled $74.0 million, or 7.8% of net sales, compared to $132.0 million, or 12.2% of net sales, in the corresponding 2024 period. Excluding Non-GAAP adjustments, which related to the same factors discussed above that impacted the second quarter of 2025 and 2024, of $25.0 million and $6.0 million for the six months ended June 28, 2025 and June 29, 2024, respectively, segment profit amounted to 10.4% of net sales in the first half of 2025 compared to 12.8% of net sales in the first half of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were driven by the same factors discussed above that impacted the second quarter of 2025.

Current wording

Engineered Fastening segment profit for the third quarter of 2025 totaled $59.8 million, or 11.9% of net sales, compared to $70.2 million, or 14.4% of net sales, in the corresponding 2024 period. Excluding a Non-GAAP charge of $4.1 million, or 0.9% of net sales, for the three months ended September 27, 2025 and a Non-GAAP gain of $2.6 million, or 0.5% of net sales, for the three months ended September 28, 2024, which primarily related to the supply chain transformation in both periods, segment profit amounted to 12.8% of net sales in the third quarter of 2025 compared to 13.9% of net sales in the third quarter of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales was primarily due to elevated production costs in relation to a tough prior year comparable.

Previous wording

Engineered Fastening segment profit for the second quarter of 2025 totaled $35.0 million, or 7.2% of net sales, compared to $66.8 million, or 13.5% of net sales, in the corresponding 2024 period. Excluding Non-GAAP adjustments, which primarily related to a voluntary retirement program in 2025 and costs associated with the supply chain transformation in both periods, of $17.3 million and $0.3 million for the three months ended June 28, 2025 and June 29, 2024, respectively, segment profit amounted to 10.8% of net sales in the second quarter of 2025 compared to 13.5% of net sales in the second quarter of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were primarily due to lower volume in the higher-margin automotive business.

Current wording

Engineered Fastening segment profit for the first nine months of 2025 totaled $133.8 million, or 9.2% of net sales, compared to $202.2 million, or 12.9% of net sales, in the corresponding 2024 period. Excluding Non-GAAP adjustments of $29.1 million, or 2.1% of net sales, for the nine months ended September 27, 2025, which related to a voluntary retirement program and costs associated with the supply chain transformation, and $3.4 million, or 0.2% of net sales, for the nine months ended September 28, 2024, segment profit amounted to 11.3% of net sales in the first nine months of 2025 compared to 13.1% of net sales in the first nine months of 2024. The year-over-year change in segment profit as a percent of sales and adjusted segment profit as a percent of sales were primarily due to lower volume in the higher-margin automotive business.

Previous wording

The corporate overhead element of SG&A, which is not allocated to the business segments for purposes of determining segment profit, consists of the costs associated with the executive management team and expenses related to centralized functions that benefit the entire Company but are not directly attributable to the business segments, such as legal and corporate finance functions, as well as expenses for the world headquarters facility. Corporate overhead amounted to $79.7 million and $70.3 million in the second quarter of 2025 and 2024, respectively. Excluding Non-GAAP adjustments, which primarily consisted of a voluntary retirement program in 2025 and transition services costs related to previously divested businesses in both periods, of $16.9 million for the three months ended June 28, 2025 and $8.2 million for the three months ended June 29, 2024, the corporate overhead element of SG&A was $62.8 million and $62.1 million for the three months ended June 28, 2025 and June 29, 2024, respectively.

Current wording

The corporate overhead element of SG&A, which is not allocated to the business segments for purposes of determining segment profit, consists of the costs associated with the executive management team and expenses related to centralized functions that benefit the entire Company but are not directly attributable to the business segments, such as legal and corporate finance functions, as well as expenses for the world headquarters facility.

Previous wording

On a year-to-date basis, corporate overhead amounted to $154.1 million and $134.5 million in the first half of 2025 and 2024, respectively. Excluding Non-GAAP adjustments, which related to the same factors discussed above that impacted the second quarter of 2025 and 2024, of $22.9 million for the six months ended June 28, 2025 and $14.1 million for the six months ended June 29, 2024, the corporate overhead element of SG&A was $131.2 million and $120.4 million for the six months ended June 28, 2025 and June 29, 2024, respectively.

Current wording

On a year-to-date basis, corporate overhead amounted to $209.0 million and $208.7 million in the first nine months of 2025 and 2024, respectively. Excluding Non-GAAP adjustments, which primarily consisted of a voluntary retirement program in 2025 and transition services costs related to previously divested businesses in both periods, of $24.1 million for the nine months ended September 27, 2025 and $21.1 million for the nine months ended September 28, 2024, the corporate overhead element of SG&A was $184.9 million and $187.6 million for the nine months ended September 27, 2025 and September 28, 2024, respectively.

Previous wording

For the three and six months ended June 28, 2025, the Company recognized net restructuring charges of $18.8 million and $20.0 million, primarily driven by severance costs related to reorganizations of the Company’s corporate and support functions as well as severance and facility costs related to footprint actions associated with the supply chain transformation. The Company expects to achieve annual net cost savings of approximately $40 million by the end of 2026 related to the restructuring costs incurred during the six months ended June 28, 2025. The majority of the $39.9 million of reserves remaining as of June 28, 2025 is expected to be utilized within the next 12 months.

Current wording

For the three and nine months ended September 27, 2025, the Company recognized net restructuring charges of $32.1 million and $52.1 million, respectively, primarily driven by severance costs and 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. The Company expects to achieve annual net cost savings of approximately $90 million by the end of 2026 related to the restructuring costs incurred during the nine months ended September 27, 2025. The majority of the $36.0 million of reserves remaining as of September 27, 2025 is expected to be utilized within the next 12 months.

Previous wording

The $20.0 million of net restructuring charges for the six months ended June 28, 2025 includes: $9.3 million in the Tools & Outdoor segment; $1.6 million in the Engineered Fastening segment; and $9.1 million in Corporate.

Current wording

The $52.1 million of net restructuring charges for the nine months ended September 27, 2025 includes: $38.8 million in the Tools & Outdoor segment; $1.9 million in the Engineered Fastening segment; and $11.4 million in Corporate.

Previous wording

The $18.8 million of net restructuring charges for the three months ended June 28, 2025 includes: $10.9 million in the Tools & Outdoor segment; $1.3 million in the Engineered Fastening segment; and $6.6 million in Corporate.

Current wording

The $32.1 million of net restructuring charges for the three months ended September 27, 2025 includes: $29.5 million in the Tools & Outdoor segment; $0.3 million in the Engineered Fastening segment; and $2.3 million in Corporate.

Previous wording

The anticipated annual net cost savings of approximately $40 million related to the 2025 restructuring actions include: $13 million in the Tools & Outdoor segment; $2 million in the Engineered Fastening segment; and $25 million in Corporate.

Current wording

The anticipated annual net cost savings of approximately $90 million related to the 2025 restructuring actions include: $58 million in the Tools & Outdoor segment; $4 million in the Engineered Fastening segment; and $28 million in Corporate.

Previous wording

This discussion of certain planning assumptions is intended to provide broad insight into the Company's near-term earnings and cash flow generation prospects. The Company's planning assumptions for 2025 are for diluted earnings per share on a GAAP basis to be $3.45 (+/- $0.10) and diluted earnings per share excluding Non-GAAP adjustments to be approximately $4.65. The Company is targeting annual free cash flow to approximate $600 million. The gross annualized tariff impact is currently estimated to be approximately $800 million, which carries an assumption for country tariffs that includes July policy changes. Net of price adjustments and supply shifts the negative 2025 diluted earnings per share impact is expected to be approximately $0.65 reflecting the timing and costs required to implement mitigation countermeasures.

Current wording

This discussion of certain planning assumptions is intended to provide broad insight into the Company's near-term earnings and cash flow generation prospects. The Company's planning assumptions for 2025 are for diluted earnings per share on a GAAP basis to be $2.55 to $2.70 (from $3.45 (+/-$0.10)) incorporating the third quarter pre-tax non-cash asset impairment charges of $169 million. The Company expects diluted earnings per share excluding Non-GAAP adjustments to be approximately $4.55, revised from approximately $4.65, reflecting higher production costs that the Company expects to adjust back to targeted levels during the fourth quarter. The Company is targeting free cash flow to approximate $600 million, unchanged from the second quarter of 2025.

Previous wording

The difference between the planning assumptions for 2025 diluted earnings per share on a GAAP basis and diluted earnings per share excluding Non-GAAP adjustments is approximately $1.10 to $1.30, consisting primarily of charges related to the supply chain transformation under the Global Cost Reduction Program and cost actions.

Current wording

The difference between the planning assumptions for 2025 diluted earnings per share on a GAAP basis and diluted earnings per share excluding Non-GAAP adjustments is approximately $1.85 to $2.00, consisting primarily of charges related to the supply chain transformation under the Global Cost Reduction Program, non-cash asset impairment charges and other cost actions.

Previous wording

Operating Activities: Cash flows provided by operations were $214.3 million in the second quarter of 2025 compared to $573.0 million in the corresponding period of 2024, as higher earnings were more than offset by changes in working capital. Year-to-date cash flows used in operations were $205.7 million in 2025 compared to cash flows provided by operations of $142.0 million in 2024, primarily driven by the same factors discussed above that impacted the second quarter of 2025.

Current wording

Operating Activities: Cash flows provided by operations were $221.2 million in the third quarter of 2025 compared to $285.8 million in the corresponding period of 2024, primarily driven by lower earnings. Year-to-date cash flows provided by operations were $15.5 million in 2025 compared to $427.8 million in the corresponding period of 2024, as higher earnings were more than offset by changes in working capital.

Previous wording

Free Cash Flow: Free cash flow, as defined in the table below, was an inflow of $134.7 million in the second quarter of 2025 compared to an inflow of $485.8 million in the corresponding period 2024. On a year-to-date basis, free cash flow was an outflow of $350.3 million and $10.9 million in 2025 and 2024, respectively. The year-over-year change in free cash flow was due to the same factors discussed above in operating activities. Management considers free cash flow an important indicator of its liquidity and capital efficiency, as well as its ability to fund future growth and provide dividends to shareowners, and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items.

Current wording

Free Cash Flow: Free cash flow, as defined in the table below, was an inflow of $155.3 million and $199.3 million in the third quarter of 2025 and 2024, respectively. On a year-to-date basis, free cash flow was an outflow of $195.0 million in 2025 and an inflow of $188.4 million in 2024. The year-over-year change in free cash flow was due to the same factors discussed above in operating activities, as well as lower planned capital expenditures in 2025. Management considers free cash flow an important indicator of its liquidity and capital efficiency, as well as its ability to fund future growth and provide dividends to shareowners, and is useful information for investors. Free cash flow does not include deductions for mandatory debt service, other borrowing activity, discretionary dividends on the Company’s common stock and business acquisitions, among other items.

Previous wording

Cash flows used in investing activities totaled $124.9 million in the first half of 2025, primarily due to capital and software expenditures of $144.6 million. Cash flows provided by investing activities totaled $586.2 million in the first half of 2024, primarily due to net proceeds from sales of businesses of $735.6 million, partially offset by capital and software expenditures of $152.9 million.

Current wording

Cash flows used in investing activities totaled $190.0 million in the first nine months of 2025, primarily due to capital and software expenditures of $210.5 million. Cash flows provided by investing activities totaled $500.8 million in the first nine months of 2024, primarily due to net proceeds from sales of businesses of $735.6 million, partially offset by capital and software expenditures of $239.4 million.

Previous wording

Financing Activities: Cash flows used in financing activities totaled $223.0 million in the second quarter of 2025, primarily driven by cash dividend payments on common stock of $124.0 million and net short-term commercial paper repayments of $98.2 million. Cash flows used in financing activities totaled $1.368 billion in the second quarter of 2024, primarily driven by net short-term commercial paper repayments of $1.246 billion and cash dividend payments on common stock of $121.8 million.

Current wording

Financing Activities: Cash flows used in financing activities totaled $188.1 million in the third quarter of 2025, primarily driven by payments on long term-debt of $350.1 million and cash dividend payments on common stock of $125.8 million, partially offset by short-term commercial paper borrowings of $287.9 million. Cash flows used in financing activities totaled $234.3 million in the third quarter of 2024, primarily driven by cash dividend payments on common stock of $123.6 million and net short-term commercial paper repayments of $121.5 million

Previous wording

Cash flows provided by financing activities totaled $279.0 million in the first half of 2025, primarily driven by net short-term commercial paper borrowings of $1.038 billion, partially offset by payments on long-term debt of $500.3 million and cash dividend payments on common stock of $248.5 million. Cash flows used in financing activities totaled $819.5 million in the first half of 2024, primarily driven by net short-term commercial paper repayments of $570.8 million and cash dividend payments on common stock of $243.6 million.

Current wording

Cash flows provided by financing activities totaled $90.9 million in the first nine months of 2025, primarily driven by net short-term commercial paper borrowings of $1.326 billion, partially offset by payments on long-term debt of $850.4 million and cash dividend payments on common stock of $374.3 million. Cash flows used in financing activities totaled $1.054 billion in the first nine months of 2024, primarily driven by net short-term commercial paper repayments of $692.3 million and cash dividend payments on common stock of $367.2 million.

Previous wording

The Company maintains investment grade credit ratings from the major U.S. rating agencies on its senior unsecured debt (S&P A-, Fitch BBB+, Moody's Baa3), as well as its commercial paper program (S&P A-2, Fitch F2, Moody's P-3). There were no changes to any of the Company's credit ratings during the first half of 2025. Failure to maintain investment grade rating levels could adversely affect the Company’s cost of funds, liquidity and access to capital markets, but would not have an adverse effect on the Company’s ability to access its existing committed credit facilities.

Current wording

The Company maintains investment grade credit ratings from the major U.S. rating agencies on its senior unsecured debt (S&P BBB+, Fitch BBB+, Moody's Baa3), as well as its commercial paper program (S&P A-2, Fitch F2, Moody's P-3). In the third quarter of 2025, S&P downgraded the Company’s senior unsecured debt credit rating from A- to BBB+. Failure to maintain investment grade rating levels could adversely affect the Company’s cost of funds, liquidity and access to capital markets, but would not have an adverse effect on the Company’s ability to access its existing committed credit facilities.

Previous wording

Cash and cash equivalents totaled $312 million and $291 million as of June 28, 2025 and December 28, 2024, respectively, which was primarily held in foreign jurisdictions.

Current wording

Cash and cash equivalents totaled $268.3 million and $290.5 million as of September 27, 2025 and December 28, 2024, respectively, which was primarily held in foreign jurisdictions.

Previous wording

The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars. As of June 28, 2025, the Company had commercial paper borrowings outstanding of $1.1 billion, of which $555.1 million in Euro denominated commercial paper was designated as a net investment hedge. As of December 28, 2024, the Company had no commercial paper borrowings outstanding. Refer to Note H, Financial Instruments, for further discussion.

Current wording

The Company has a $3.5 billion commercial paper program which includes Euro denominated borrowings in addition to U.S. Dollars. As of September 27, 2025, the Company had commercial paper borrowings outstanding of $1.4 billion, of which $552.4 million in Euro denominated commercial paper was designated as a net investment hedge. As of December 28, 2024, the Company had no commercial paper borrowings outstanding. Refer to Note H, Financial Instruments, for further discussion.

Previous wording

There have been no changes in the Company’s critical accounting estimates during the second quarter of 2025. Refer to the“Other Matters” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 28, 2024 for a discussion of the Company’s critical accounting estimates.

Current wording

There have been no other changes in the Company’s critical accounting estimates during the third quarter of 2025. Refer to the“Other Matters” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 28, 2024 for a discussion of the Company’s critical accounting estimates.