Group 1 - Halper Sadeh LLC is investigating the fairness of the sale of SWK Holdings Corporation to Runway Growth Finance Corp for SWK shareholders [1] - The investigation focuses on whether SWK and its board of directors violated any legal obligations [1]

Core Viewpoint - Runway Growth Finance Corp. has announced a definitive merger agreement to acquire SWK Holdings Corporation, enhancing its portfolio in healthcare and life sciences while optimizing its financial profile and expected net investment income accretion [1][2]. Transaction Overview - The estimated purchase price for the acquisition is approximately $220 million, consisting of $75.5 million in Runway Growth shares and about $145 million in cash [4]. - The transaction is structured as a net asset value-for-net asset value merger, with cash payments based on SWK's final NAV prior to closing [4]. Strategic Implications - The acquisition will increase Runway Growth's healthcare investments from 14% to approximately 31% of its portfolio, expanding its exposure in a growing market [5]. - The total assets of Runway Growth are expected to reach $1.3 billion pro forma following the merger, enhancing its balance sheet and portfolio metrics [5]. Financial Impact - The merger is anticipated to generate mid-single-digit run-rate net investment income accretion in the first full quarter post-transaction [5]. - Improvements in dividend coverage and return on equity (ROE) are expected, along with an expansion of Runway Growth's pro forma leverage ratio [5]. Governance and Approval - SWK's Board of Directors has unanimously approved the transaction, which is expected to close in late 2025 or early 2026, pending shareholder and regulatory approvals [7].

Core Viewpoint - SWK Holdings (NASDAQ: SWKH) is primarily focused on financing the healthcare industry, with a minor segment dedicated to pharmaceutical development [1] Company Overview - SWK Holdings has a 9% coupon baby bond (NASDAQ: SWKHL) alongside its shares [1] - The company is involved in income investing through common shares, preferred shares, or bonds [1] Analyst Background - The author has a Bachelor's degree in history/political science and a Master's in Business Administration with a specialization in Finance and Economics [1] - The author has been investing since 2000 and is currently the CEO of an independent living retirement community in Illinois [1]

Group 1: Zacks Premium Overview - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, Equity Research reports, and Premium stock screens [1] - The service aims to help investors become more confident and informed in their investment decisions [1] Group 2: Zacks Style Scores - Zacks Style Scores are indicators designed to assist investors in selecting stocks with the highest potential to outperform the market within a 30-day timeframe, rated from A to F based on value, growth, and momentum characteristics [2] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] Group 3: Value Score - The Value Score identifies attractive and discounted stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow, appealing to value investors [3] Group 4: Growth Score - The Growth Score evaluates stocks based on projected and historical earnings, sales, and cash flow, targeting companies with sustainable growth potential [4] Group 5: Momentum Score - The Momentum Score focuses on stocks experiencing upward or downward trends, utilizing factors like one-week price changes and monthly earnings estimate changes to identify favorable investment opportunities [5] Group 6: VGM Score - The VGM Score combines all three Style Scores, providing a comprehensive indicator for investors who utilize multiple investment strategies, highlighting stocks with strong value, growth, and momentum [6] Group 7: Zacks Rank and Style Scores Integration - The Zacks Rank is a proprietary stock-rating model that leverages earnings estimate revisions to guide investors in building successful portfolios [7] - Stocks rated 1 (Strong Buy) have historically produced an average annual return of +23.75% since 1988, significantly outperforming the S&P 500 [8] Group 8: Stock Selection Strategy - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 that also possess Style Scores of A or B to maximize potential success [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks (4 or 5) may still have high Style Scores but are likely to decline in value [10] Group 9: Company Spotlight - Stanley Black & Decker - Stanley Black & Decker (SWK) is currently rated 3 (Hold) with a VGM Score of A, indicating potential for momentum investors [11] - The company has seen a 4.7% increase in shares over the past four weeks, with four analysts raising earnings estimates for fiscal 2025, leading to a Zacks Consensus Estimate increase of $0.20 to $4.59 per share [12] - SWK has an average earnings surprise of +57.3%, making it a noteworthy option for investors [12]

Financial Data and Key Metrics Changes - SWK Holdings reported GAAP pretax net income of $4.6 million or $0.37 per diluted share for Q2 2025, with a net income of $3.5 million after tax expenses [8] - The GAAP book value per share was $20.23, an 11% decrease from $22.72 as of June 30, 2024, but adjusted for the $4 per share dividend, it was $24.46, reflecting a 6.8% year-over-year increase [9] - Non-GAAP adjusted net income for the finance segment was $4.6 million, indicating a stable run rate for the business going forward [5][12] Business Line Data and Key Metrics Changes - The finance receivables segment revenue decreased by $1.2 million year-over-year, primarily due to a $3.4 million decrease in interest and fees from paydowns and the sale of the majority of the royalty portfolio [8] - The pharmaceutical development segment revenue increased by $500,000 year-over-year [8] - Operating expenses for the finance receivables segment decreased significantly from $7.4 million in 2024 to $4.2 million in 2025, largely due to a reduction in provision for credit losses [10] Market Data and Key Metrics Changes - The company has returned $49 million to shareholders through a $4 per share dividend and an additional $3 million through share repurchases [4][5] - The remaining financial assets include $234 million in gross performing first lien term loans with an effective yield of 14.1% [5] Company Strategy and Development Direction - The company is focused on realizing the underlying value of its assets and ensuring shareholder benefits through asset sales and capital returns [4][5] - The management team aims to simplify the business structure and maintain a healthy loan book, indicating a disciplined approach to capital deployment [12] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the second quarter's results as a reasonable proxy for future earnings power, despite some expected noise in Q3 due to the transition services agreement with Aptar [12] - Concerns regarding regulatory changes, particularly from the FDA, were addressed, with management indicating minimal impact on their portfolio companies [22][23] Other Important Information - The company completed the sale of the majority of its royalty assets and the Mod three subsidiary, which was seen as a successful outcome for shareholders [4][6] - The company has been disciplined in capital deployment, with a focus on existing performing borrowers and cautious about new loans [30][31] Q&A Session Summary Question: What about the costs associated with the Mod three sale? - Management confirmed that all costs associated with Mod three have been transferred to Aptar, with no ongoing costs remaining on their side [15][16] Question: What is the impact of FDA changes on portfolio companies? - Management indicated that there are minimal concerns regarding FDA changes affecting their portfolio, as they do not have companies pending drug approvals [22][23] Question: How does the influx of private credit affect deal flow? - Management acknowledged the increased capital in the market but emphasized a disciplined approach to capital deployment, focusing on core deals and existing borrowers [30][31]

[Financial and Operational Highlights](index=1&type=section&id=Financial%20and%20Operational%20Highlights) This section covers corporate strategic shifts, key financial metrics, and the impact of the royalty portfolio sale on book value and net income [Corporate Highlights & CEO Commentary](index=1&type=section&id=Corporate%20Highlights%20%26%20CEO%20Commentary) In Q2 2025, SWK Holdings simplified its business by selling the majority of its royalty portfolio and the assets of its MOD3 subsidiary, enabling a focused strategy on its core life science loan business - Sold the majority of its royalty portfolio for approximately book value and paid a **$4.00 per share special dividend** to shareholders[3](index=3&type=chunk) - Sold the majority of assets at its MOD3 subsidiary post-quarter end, simplifying the business to focus on the core life science loan strategy[3](index=3&type=chunk) Post-Monetization Asset Portfolio | Asset Type | Gross Value (in millions) | | :--- | :--- | | Performing Finance Receivables | $234.1M | | Non-Performing Finance Receivables | $12.3M | | Public Equities & Warrants | $5.2M | | Allowance for Credit Losses | ($8.8M) | - GAAP book value per share was **$20.23**, a **6.8% increase** year-over-year when excluding the **$4.00 per share dividend**. Non-GAAP tangible financing book value per share was **$18.47**, an **11.7% year-over-year increase** after adjusting for the dividend[3](index=3&type=chunk) [Key Financial Metrics](index=1&type=section&id=Key%20Financial%20Metrics) The company reported GAAP net income of $3.5 million, a slight decrease from the prior year, while finance receivables segment adjusted non-GAAP net income grew significantly to $4.6 million Q2 2025 vs Q2 2024 Key Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | GAAP Net Income | $3.5M | $3.7M | -5.4% | | Finance Receivables Segment Adj. Non-GAAP Net Income | $4.6M | $2.6M | +76.9% | | Net Finance Receivables | $237.6M | - | -10.4% (vs Jun 30, 2024) | | Effective Yield | 14.1% | 14.6% | -50 bps | | GAAP Book Value per Share | $20.23 | $22.72 | -11.0% | | Non-GAAP Tangible Financing Book Value per Share | $18.47 | $20.14 | -8.3% | - Adjusting for the **$4.00 per share special dividend**, GAAP book value per share would have increased **6.8% YoY**, and non-GAAP tangible financing book value per share would have increased **11.7% YoY**[4](index=4&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) This section details the company's second quarter 2025 financial results, including revenue breakdown, profitability, investment asset changes, and portfolio activity [Second Quarter 2025 Financial Results](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) For Q2 2025, total revenue decreased by 6.5% to $10.1 million, primarily due to a $1.2 million drop in Finance Receivables segment revenue following the sale of the royalty portfolio Q2 2025 Revenue Breakdown | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (in millions) | | :--- | :--- | :--- | :--- | | Total Revenue | $10.1M | $10.8M | -6.5% | | Finance Receivables Segment Revenue | - | - | -$1.2M | | Pharmaceutical Development Segment Revenue | - | - | +$0.5M | Q2 2025 Profitability | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | | :--- | :--- | :--- | | Income Before Income Tax | $4.6M | $4.7M | | GAAP Net Income | $3.5M | $3.7M | | Diluted EPS | $0.29 | $0.30 | - Total investment assets decreased by **8.9%** to **$242.8 million** as of June 30, 2025, primarily due to the monetization of royalty assets for total proceeds of approximately **$51.3 million**[8](index=8&type=chunk) - During Q2, SWK repurchased **58,954 shares** for **$0.9 million**. Year-to-date through August 8, 2025, repurchases totaled **198,162 shares** for **$3.0 million**[9](index=9&type=chunk) [Portfolio Status and Activity](index=2&type=section&id=Portfolio%20Status%20and%20Activity) In Q2, SWK sold the majority of its royalty portfolio for $34.0 million and advanced $13.5 million to two existing borrowers - Key Q2 activities included selling the majority of the royalty portfolio for **$34.0 million**, paying a **$49.1 million dividend**, and funding an additional **$13.5 million** to performing borrowers AOTI, Inc. and Nicoya Life Sciences, Inc[11](index=11&type=chunk) Portfolio Yields (Q2 2025 vs Q2 2024) | Yield Type | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Effective Yield | 14.1% | 14.6% | -50 bps | | Realized Yield | 14.3% | 15.4% | -110 bps | - As of June 30, 2025, three finance receivables were in nonaccrual status: Flowonix (**$7.1M carrying value**), Best ABT (**$2.3M**), and Ideal Implant (**$2.8M**)[13](index=13&type=chunk) Q2 2025 Portfolio Investment Activity (in thousands) | Activity | Amount | | :--- | :--- | | Beginning Portfolio | $227,776 | | Investment in finance receivables | $13,500 | | Paydowns received on investments | ($466) | | Provision for credit losses | ($541) | | Ending Portfolio | $242,819 | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations of non-GAAP financial measures to their GAAP equivalents and explains their relevance for analyzing the company's core operations [Reconciliation of Non-GAAP Measures](index=4&type=section&id=Reconciliation%20of%20Non-GAAP%20Measures) The company provides reconciliations for several non-GAAP metrics to their GAAP counterparts Reconciliation of GAAP Net Income to Non-GAAP Net Income (in thousands) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | GAAP Net Income | $3,536 | $3,680 | | Adjustments | $1,093 | ($1,712) | | **Non-GAAP Net Income** | **$4,629** | **$1,968** | Finance Receivables Segment Adjusted Non-GAAP Net Income (in thousands) | | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Non-GAAP Net Income | $4,629 | $1,968 | | MOD3 operating (income) loss | ($18) | $670 | | **Finance Receivables Segment Adjusted Non-GAAP Net Income** | **$4,611** | **$2,638** | Reconciliation of GAAP Book Value to Non-GAAP Tangible Finance Book Value Per Share | | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | GAAP book value per share | $20.23 | $22.72 | | **Non-GAAP Tangible book value per share** | **$18.47** | **$20.14** | [Explanation of Non-GAAP Measures](index=5&type=section&id=Explanation%20of%20Non-GAAP%20Measures) SWK utilizes non-GAAP measures such as adjusted net income and tangible financing book value per share to provide investors with a clearer view of its core ongoing operations - Non-GAAP adjusted net income is adjusted for non-cash items such as changes in fair-market value of equities and warrants, income taxes (due to NOLs), amortization, and changes in contingent consideration[20](index=20&type=chunk) - Non-GAAP finance receivable segment net income further excludes the operating results of the MOD3 subsidiary[21](index=21&type=chunk) - Non-GAAP tangible financing book value per share is calculated by excluding the deferred tax asset, intangible assets, and contingent consideration related to the MOD3 transaction from GAAP book value[21](index=21&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents the condensed consolidated balance sheets, statements of income, and statements of cash flows, highlighting key financial positions and performance for the period [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, SWK's total assets were $285.7 million, down from $332.2 million at year-end 2024, primarily due to a decrease in net finance receivables Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Assets | $285,697 | $332,235 | | Finance receivables, net | $237,604 | $277,760 | | Total Liabilities | $39,228 | $43,545 | | Total Stockholders' Equity | $246,469 | $288,690 | [Condensed Consolidated Statements of Income](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) For the three months ended June 30, 2025, total revenues were $10.1 million, a decrease from $10.8 million in the prior-year period Income Statement Summary - Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Total Revenues | $10,052 | $10,847 | | Provision for credit losses | $761 | $4,095 | | Income before income tax expense | $4,562 | $4,715 | | Net Income | $3,536 | $3,680 | | Diluted EPS | $0.29 | $0.30 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, net cash provided by operating activities was $16.1 million Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,081 | $9,843 | | Net cash provided by investing activities | $42,841 | $4,813 | | Net cash used in financing activities | ($56,843) | ($14,343) | | Net increase in cash | $2,079 | $313 | - Key financing activities in the first six months of 2025 included paying **$49.1 million** in cash dividends and repurchasing **$1.7 million** of common stock[31](index=31&type=chunk) [Additional Information](index=5&type=section&id=Additional%20Information) This section provides details on the upcoming conference call for Q2 2025 results and an overview of SWK Holdings Corporation's business model and financing solutions [Conference Call Information](index=5&type=section&id=Conference%20Call%20Information) SWK Holdings will host a conference call on August 15, 2025, at 9:00 a.m. CST to discuss the second quarter 2025 financial results - A conference call to discuss Q2 2025 results is scheduled for **August 15, 2025**, at **9:00 a.m. CST**[23](index=23&type=chunk) [About SWK Holdings Corporation](index=6&type=section&id=About%20SWK%20Holdings%20Corporation) SWK Holdings Corporation is a specialty finance company focused on the life sciences sector - SWK is a life science-focused specialty finance company providing non-dilutive financing to small- and mid-sized commercial-stage healthcare companies[24](index=24&type=chunk) - Financing solutions include structured debt, royalty monetization, and asset purchases, with typical transaction sizes ranging from **$5.0 million** to **$25.0 million**[24](index=24&type=chunk)

PART I. FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) The company's unaudited financials show decreased assets due to a portfolio sale but a significant increase in net income [Unaudited Condensed Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects reduced assets and equity, driven by a finance receivable sale and a special dividend Condensed Consolidated Balance Sheet Data (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$285,697** | **$332,235** | | Cash and cash equivalents | $8,006 | $5,927 | | Finance receivables, net | $237,604 | $277,760 | | Assets held for sale, net | $6,488 | $6,398 | | **Total Liabilities** | **$39,228** | **$43,545** | | Revolving credit facility | $294 | $6,233 | | Unsecured senior notes, net | $31,736 | $31,412 | | **Total Stockholders' Equity** | **$246,469** | **$288,690** | [Unaudited Condensed Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income) Six-month net income nearly doubled year-over-year, primarily due to a benefit from credit losses Condensed Consolidated Statements of Income (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $10,052 | $10,847 | $21,884 | $22,207 | | Provision (benefit) for credit losses | $761 | $4,095 | $(704) | $9,392 | | Income from operations | $4,629 | $901 | $12,742 | $1,980 | | **Net income** | **$3,536** | **$3,680** | **$8,075** | **$4,148** | | Diluted EPS | $0.29 | $0.30 | $0.66 | $0.33 | [Unaudited Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity declined significantly due to a $49.1 million special cash dividend and share repurchases - A special cash dividend of **$4.00 per share**, totaling **$49.1 million**, was paid during the second quarter of 2025[13](index=13&type=chunk) - The company repurchased **58,954 shares** of common stock in the open market during the second quarter of 2025[13](index=13&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash increased by $2.1 million, with strong operating and investing inflows offsetting a large dividend payment Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,081 | $9,843 | | Net cash provided by investing activities | $42,841 | $4,813 | | Net cash used in financing activities | $(56,843) | $(14,343) | | **Net increase in cash** | **$2,079** | **$313** | [Notes to the Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20the%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the two operating segments, a major royalty portfolio sale, and the classification of MOD3 assets as held for sale - The company operates through two reportable segments: **'Finance Receivables'** and **'Pharmaceutical Development'** (MOD3 Pharma)[18](index=18&type=chunk)[21](index=21&type=chunk) - On April 10, 2025, the company sold the majority of its finance receivables royalty portfolio to Soleus Capital for approximately **$34.0 million in cash**, recognizing a **loss of $3.7 million** on the transaction[50](index=50&type=chunk) - The company entered into an agreement with Aptar, granting an exclusive option to acquire assets of its MOD3 (Pharmaceutical Development) business; these assets were classified as **held for sale**[57](index=57&type=chunk)[59](index=59&type=chunk)[61](index=61&type=chunk) - As of June 30, 2025, the company had **$0.3 million outstanding** on its **$60.0 million revolving credit facility** and **$33.0 million** in 9.00% Senior Notes due 2027[68](index=68&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management highlights a positive swing in credit loss provisions as the key driver for improved six-month net income [Results of Operations](index=32&type=section&id=Comparison%20of%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) A $10.1 million favorable change in credit loss provisions drove the six-month net income increase to $8.1 million Comparison of Six Months Ended June 30 (in millions) | Line Item | 2025 | 2024 | Change $ | | :--- | :--- | :--- | :--- | | Revenues | $21.9 | $22.2 | $(0.3) | | Provision (benefit) for credit losses | $(0.7) | $9.4 | $(10.1) | | Other income (expense), net | $(2.4) | $3.4 | $(5.8) | | **Net income** | **$8.1** | **$4.1** | **$4.0** | - The decrease in the provision for credit losses for the six-month period was the **primary driver of increased net income**, mainly due to impairments recognized in the prior year period[129](index=129&type=chunk) - The decrease in 'Other income (expense), net' for the six-month period was primarily due to **net losses on finance receivables** in the current period compared to net gains in the prior year[134](index=134&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity improved with an increase in cash to $8.0 million and significant availability on the revolving credit facility - Cash and cash equivalents increased to **$8.0 million** as of June 30, 2025, from $5.9 million as of December 31, 2024[136](index=136&type=chunk) - The company has a **$60.0 million revolving credit facility** with $0.3 million outstanding as of June 30, 2025, and total availability of **$54.7 million** after considering a liquidity covenant[137](index=137&type=chunk) - As of June 30, 2025, the company had **$7.5 million in unfunded commitments** to its portfolio companies[142](index=142&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate changes, partially mitigated by its floating-rate receivables portfolio - The company's primary market risk is **interest rate risk**, as its net investment income depends on the spread between lending and borrowing rates[145](index=145&type=chunk) - The majority of the finance receivables portfolio pays interest based on **floating rates**, which helps mitigate the risk of rising interest rates on the company's cost of funds[146](index=146&type=chunk)[147](index=147&type=chunk) [Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the period[150](index=150&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[151](index=151&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) The company is not involved in any legal proceedings expected to have a material impact on the business - As of the reporting date, the company is **not involved in any arbitration or other legal proceeding** that it expects to have a material effect on its business[153](index=153&type=chunk) [Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) No material changes have been identified from the risk factors disclosed in the 2024 Annual Report on Form 10-K - **No material changes** from the risk factors previously disclosed in the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[154](index=154&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=38&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) A new $10.0 million share repurchase program was authorized, with $0.9 million executed in the second quarter - On May 19, 2025, the Board authorized a new share repurchase program to buy back up to **$10.0 million of common stock** through May 19, 2026[156](index=156&type=chunk) Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 2025 | 10,026 | $16.78 | | May 2025 | 23,125 | $14.13 | | June 2025 | 25,803 | $14.52 | | **Total Q2** | **58,954** | **$14.75** | - As of June 30, 2025, approximately **$9.3 million remained available** for purchase under the current repurchase program[157](index=157&type=chunk) [Defaults Upon Senior Securities](index=38&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None [Mine Safety Disclosures](index=38&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not Applicable [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) None [Exhibits](index=40&type=section&id=Item%206.%20Exhibits) The report includes required CEO/CFO certifications and XBRL data files as filed exhibits

Core Insights - Stanley Black & Decker reported $3.95 billion in revenue for Q2 2025, a 2% decline year-over-year, with an EPS of $1.08 compared to $1.09 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $3.99 billion by 1.12%, while the EPS exceeded the consensus estimate of $0.38 by 184.21% [1] Financial Performance Metrics - Net Sales for Tools & Outdoor segment were $3.46 billion, below the five-analyst average estimate of $3.52 billion, reflecting a year-over-year decline of 1.9% [4] - Net Sales for Engineered Fastening were $483.8 million, slightly above the estimated $477.91 million, but still a 2.4% decrease compared to the previous year [4] - Normalized Operating Profit for Tools & Outdoor was $276.5 million, exceeding the average estimate of $230.46 million [4] - Normalized Operating Profit for Corporate Overhead was reported at -$62.8 million, worse than the estimated -$55.25 million [4] - Normalized Operating Profit for Engineered Fastening was $52.3 million, slightly above the average estimate of $51.98 million [4] Stock Performance - Over the past month, shares of Stanley Black & Decker have returned +9.1%, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Company Performance - Stanley Black & Decker reported quarterly earnings of $1.08 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and compared to earnings of $1.09 per share a year ago, representing an earnings surprise of +184.21% [1] - The company posted revenues of $3.95 billion for the quarter ended June 2025, missing the Zacks Consensus Estimate by 1.12%, and down from $4.02 billion year-over-year [2] - Over the last four quarters, Stanley Black & Decker has surpassed consensus EPS estimates four times and topped consensus revenue estimates two times [2] Stock Performance - Stanley Black & Decker shares have declined approximately 7.9% since the beginning of the year, while the S&P 500 has gained 8.6% [3] - The current status of estimate revisions translates into a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $1.85 on revenues of $3.9 billion, and for the current fiscal year, it is $4.49 on revenues of $15.53 billion [7] - The outlook for the industry, specifically the Manufacturing - Tools & Related Products sector, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Stanley Black & Decker due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The upcoming earnings report is expected to show earnings of $0.38 per share, reflecting a decline of 65.1% year-over-year, with revenues projected at $3.99 billion, down 0.9% from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.5% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Stanley Black & Decker is higher than the consensus estimate, resulting in an Earnings ESP of +18.80%, indicating a likely earnings beat [11]. Historical Performance - In the last reported quarter, Stanley Black & Decker exceeded the expected earnings of $0.68 per share by delivering $0.75, achieving a surprise of +10.29%. The company has beaten consensus EPS estimates in the last four quarters [12][13]. Investment Considerations - While the potential for an earnings beat exists, other factors may influence stock performance, making it essential to consider the broader context beyond just earnings results [14][16].