In April 2024, the Company sold its Infrastructure business for net proceeds of $729 million. This aligns with the strategic commitment to simplify the portfolio and focus on leading market positions in tools and outdoor, as well as engineered fastening systems.

The company initiated a business transformation in mid-2022 that includes reinvestment for faster growth as well as a $2.0 billion Global Cost Reduction Program through 2025. This program consists of SG&A and supply chain transformation initiatives.

The Company is advancing innovation, electrification and global market penetration to achieve mid-single digit organic revenue growth (2 to 3 times the market). The company continues to invest in its innovation model targeting key end-user segments with products designed to deliver against the attributes of productivity, quality and safety, and places an emphasis on electrification.

The Company is streamlining and simplifying the organization, and investing in initiatives that more directly impact the Company's customers and end users. The company is focused on building organizational capabilities and evolving the Company's culture.

The company is returning adjusted gross margins to historical 35%+ levels by accelerating the operations and supply chain transformation to improve fill rates and better match inventory with customer demand. The company has reduced inventory by over $2 billion since the end of the second quarter of 2022.

The company has invested in its hourly operations workforce with dedicated enablement programs focused on upskilling initiatives and future career opportunities, as well as job-specific training. In 2024, the program had over 5,000 published knowledge videos with approximately 89,000 views.

The Company's business is subject to risks associated with sourcing, manufacturing and maintaining appropriate inventory levels. Global trade and supply chain constraints in the wake of geopolitical tensions and conflicts have adversely impacted, and could adversely impact again, the availability, pricing and lead times for products, component parts and raw materials.

The Company's business is subject to risks associated with the global trade environment, including customs and trade regulations, tariffs, quotas, import taxes and international trade agreements. Changes in governmental policy regarding international trade, including import and export regulation, sanctions, and international trade agreements, have negatively impacted the Company's business.

The Company's information systems and data may be vulnerable to cybersecurity threats and incidents which can include uncoordinated individual attempts to gain unauthorized access to information technology systems, sophisticated and targeted measures known as advanced persistent threats, breaches due to human error, malfeasance, or other cybersecurity incidents directed at the Company.

The Company faces active competition and resulting pricing pressures. The Company's products compete on the basis of, among other things, its reputation for product quality, its well-known brands, price, performance, innovation and customer service capabilities.

A significant portion of the Company's products are sold through home centers and mass merchant distribution channels in the U.S. and Europe. A consolidation of retailers in both North America and abroad has occurred over time and the increasing size and importance of individual customers creates risk of exposure to potential volume or profitability loss.

The Company has a strong portfolio of brands associated with high-quality products including the iconic DEWALT®, CRAFTSMAN® and STANLEY® brands. The Company also goes to market with strong brands such as BLACK+DECKER®, DEWALT FLEXVOLT®, DEWALT POWERSTACK®, DEWALT POWERSHIFTTM, CUB CADET®, TROY-BILT®, HUSTLER®, IRWIN®, LENOX®, PORTER-CABLE®, BOSTITCH®, PROTO®, MAC TOOLS®, FACOM®, Powers®, LISTA®, Vidmar®, and GQ®.

Working capital turns were 4.9 at the end of 2024, up 0.7 turns from 2023, driven by the Company's continued focus on strategic inventory management and working capital efficiency. The Company plans to continue leveraging Operational Excellence to generate ongoing improvements in working capital turns, cycle times, and customer service levels.

The $1.5 billion of pre-tax run-rate cost savings from the supply chain transformation has been, and continues to be, driven by the following value streams: Material Productivity, Operational Excellence, Footprint Rationalization, and Complexity Reduction.

Failure to achieve, or delays in achieving, projected levels of efficiencies and cost savings from this transformation and other restructuring or cost reduction actions introduced by the Company, significant increases in the costs related to such actions, or unanticipated inefficiencies resulting from this transformation and other manufacturing and administrative reorganization actions in progress or contemplated, could adversely affect the anticipated cost savings as well as the Company's reputation and financial position.

Research and development costs were $328.8 million, or 2.1% of net sales, for fiscal year 2024. The 2024 investment reflects a modest decline versus prior year due to the Infrastructure divestiture and more focused spend in the outdoor product line.

The Company continues to invest in its innovation model targeting key end-user segments with products designed to deliver against the attributes of productivity, quality and safety, and places an emphasis on electrification.

The pace of technological change continues to accelerate and the Company's ability to react effectively to such change may present significant competitive risks. The Company may not adequately meet these demands or develop and adapt to the applicable new technologies focused on electrification, which could adversely affect the Company's reputation and the consumer and customer demand for the Company's products.

In terms of capital allocation, the Company remains committed, over time, to returning excess capital to shareholders through a strong and growing dividend as well as a preference toward opportunistically repurchasing shares. In the near term, the Company intends to direct any capital in excess of the quarterly dividend on its common stock toward debt reduction and internal growth investments.

The Company increased its annual dividend per common share by $0.04 in 2024 compared to 2023 and intends to continue to pay quarterly dividends in 2025. In July 2024, the Company raised the quarterly dividend per common share, its 57th annual consecutive increase, which extended its record for the longest, consecutive quarterly and annual dividend payments among industrial companies listed on the NYSE.

On April 21, 2022, the Board approved a share repurchase program of up to 20 million shares of the Company's common stock (the “April 2022 Program”). The April 2022 Program does not have an expiration date.

The Company has accordingly focused its sustainability efforts to better align with this business strategy. The Company's sustainability approach is comprised of three impact pillars of People, Product, and Planet—which guide the Company's focus and initiatives for sustainable performance.

In 2023 and 2024, the Company reinforced EHS as a key priority that applies to employees and operating locations worldwide, including manufacturing facilities, distribution centers, warehouses, laboratories, field service centers, retail locations, office locations and mobile units, as well as to the Company's subsidiaries.

The Company is committed to addressing the trade skills gap and investing in communities that support education and training programs for local tradespeople. Since the Company introduced its goal to invest $30 million over 5 years (by 2027) into programs that train tradespeople, it has invested over $19 million.

Negative economic conditions and outlooks in the markets the Company serves may weaken demand for the Company's products. Demand for the Company's products depends, in part, on the general economic conditions affecting the industries and markets in which it does business, including, but not limited to, construction and housing, general industrial, automotive, aerospace and outdoor.

The Company is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability. The Company manufactures and sells its products in many countries throughout the world. As a result, there is exposure to foreign currency risk as the Company enters into transactions and makes investments denominated in multiple currencies.

The Company's operations are subject to numerous federal, state and local laws and regulations, both within and outside the U.S., in areas such as environmental protection, international trade, anti-corruption, data privacy, tax, consumer protection, government contracts, climate change and others.