Good morning my name is Louisa and I will be your conference operator today. At this time I would like to welcome everyone to the Stanley Black & Decker first quarter 2010 results conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question and answer session. (Operator Instructions). Thank you, Ms. Kate White, Director of Investor Relations you may begin your conference.

Thanks Louisa, good morning everyone and thank you all for joining us for the Stanley Black & Decker first quarter 2010 conference call. On the call in addition to myself is John Lundgren, President and CEO, Jim Loree, Executive Vice President and COO and Don Allen Senior Vice President and CFO. I would like to point out that our first quarter earnings release which was issued at 7 am this morning and a supplemental presentation, which we will refer to during the call are available on the investor relations portion of our website and accessible on our home page of www.stanleyblackanddecker.com. This morning, John, Jim and Donald will review Stanley’s first quarter 2010 results and various other topical matters followed by a Q&A session. Because of the complexity of this quarter and the large amount of content the entire call was expected to last approximately 1 hour and 15 minutes in order to provide adequate time for Q&A. A replay of the call will be available beginning at 2 pm today. The replay number and access code are in our press release. As a reminder you can also download the earnings replay of the podcast from itunes and even set up the subscription for future replays of the calls we post. This should be posted within 24 hours. I also wanted to call your attention to Stanley’s 2009 annual toured and annual review website and videos that we launched yesterday. We decided to go online this year with a lot of our normal annual report content and we invite you to check up the site and explore the videos which feature conversations with senior management as well as the interactive charts and informational resources throughout the site. It’s a great way to become more familiar with the outstanding storey. You can access this through our home page. And as always please feel free to contact me with any follow-up questions you might have after today’s call. We will be making some forward looking statements during this call such statements are based on assumptions of future events that may not prove to be accurate and especially involves risk and uncertainty. It is therefore possible that actual results may differ materially from any forward looking statements that we might make today, and we direct you to the cautionary statements in the form 8-K which we filed with today’s press release and in our most recent 34 act. With that I will now turn the call over to our CEO John Lundgren.

Thanks, Kate and good morning everybody. Let me just start by saying this had the potential to be a confusing and very noisy quarterly release, due to the obvious fact that the Black & Decker transaction closed three weeks before the end of the quarter. So I did want tot thank those of the legacy Black & Decker and Stanley finance teams first of all for closing three sets of books at least in a very short period of time and for extraordinary efforts in that regard as well as the finance and IR teams for pulling together what we think is a clear presentation. But as Kate said she will be available as when management is necessary. Later on in the day and later on in the week to clarify anything that’s still outstanding at the end of this call. So lets get started, diluted EPS was $0.70 and that did include and $0.04 negative impact based on the acquisition, of ADT France which closed on March 9. It excludes one time charges. We did reference the ADT transaction in the press release, so we are not going to spend a lot of time on it this morning other than to say it is strategic and to fit extraordinarily well with its GDP, general protection our French Electronic Security business and as Don will discuss in his guidance, we still believe that this acquisition is going to be meaningfully accretive $0.07, $0.08 in your tree on the expanded share base. So diluted EPS including the charges of $213 million was a loss of $1.9 and again Don’s going to give you more of a granularity on the charges and their composition in the quarter which we believe to be quite clear. The gross margin rate excluding charges was 39.4%…

Okay. Thank you John, let’s start with construction in DIY, the story here was very positive, twofold, Legacy Stanley drove a 470 basis point improvement in the OM rate on a negative 2% organic volume growth. And Black & Decker performed exceptionally well adding $30.9 million to operating margin and having an accretive impact on the operating margin rate. So let’s break it down if we move to revenues we came in at 561 in this segment with an 85% increase 82 points of which were associated with BDK, five points currency, thus the minus 2% organic and that was about minus 1% price and about minus 1% unit volume. Segment profit was up a 189%. If you take out a substantial contribution $39 million from the acquisition, if the actual rate was 14.2% and still a very impressive performance for the Legacy Stanley business as I said a 470 basis points. If we get in to the specifics the U.S. revenues and European revenues organically were both slightly negative, the Big-box customers in the U.S. continue to have tight inventory controls. Did not see a lot of rebuilding there, orders were modestly positive and new product development was strong, with the introduction of the Bostich hand tool line and Legacy segment profit improved 54% due to the dramatically lower over head that resulted from the significant cost takeouts over the last five quarters or so. Working capital was a good story going from about 2.5 turns a year ago to 6.8 turns with a $55 million inventory reduction versus prior year and only a $4 million increase in inventory sequentially versus the fourth quarter. So I think this is a very strong story here we will get into a little bit more color on the pro-forma Black & Decker…

Thank you Jim. First thing I’d like to do is start with our balance sheet on a combined basis. We feel really good about our financial position going into the new company and moving forward. As you can see at the bottom of the page, our debt to capital ratio is 35%. We adjusted for the hybrid instruments that we have at 31%, exactly where we were hoping we would be as we put the two companies together, post merger. A few other items of note here of significance obviously there are some large dollar variances on the balance sheet by merging the two companies when you compare to the first quarter of last year. The largest changes have to do in other assets where the goodwill and the intangibles are recorded at about $5.6 billion as well as the Black & Decker working capital components being added in there about $2.4 billion on the asset side of the balance and then equity, clearly the issuance of the equity associated with the merger of $4.5 billion is increasing our equity and that’s really what’s driving the debt to capital ratio coming down from where we were last year at this point in time. So we feel very good starting out our financial position as we move forward. For free cash flow in the first quarter, this chart depicts what free cash flow was excluding one time payments. We had approximately $92 million of one time payments related to the merger and if you exclude that effect, the free cash flow was $37 million. Operating cash flow was $59 million which was an improvement of $55 million year-over-year in the first quarter of 2009 and you can see that its driven by a net income increase and John and Jim just…

Thank you all, its time for Q&A Louisa.

(Operator Instructions) Your first question comes from the line of Eric Bosshard with Cleveland Research. Your line is now open.

Two things, first of all can you talk about the sustainability of the margin improvement which was quite remarkable in the core CDIY business as well as in the Power Tool business of Black & Decker, Power Tool business? Obviously you talked about cost improvement contributing to that but can you talk about the sustainability of what are pretty strong levels of profitability in those businesses?

You said two things Eric.

That's the first part. There's a second part as well which hopefully I'll be able to ask once you're done with that.

Jim why don’t you talk about COE and everything else that contributes to that?

Clearly the story as I mentioned in my remarks, has everything to do with the fact that on a combined basis, these companies you know took out well over $600 million of costs, close to $700 million of cost in the last six quarters before the end of the year. So that cost is obviously not all coming back and when the volume comes in, there is some cost add backs and both of the businesses but we’re here to enjoy some operating leverage and make some selective reinvestments in growth as we move forward and we will monitor and allocate those growth reinvestments as we go but the expectation here is that we’ve gone through a lot of pain both organizations over the last couple of years and we expect to enjoy the fruits on a more granular basis when you get into gross margins, both companies have a tried and true productivity regiment, somewhat different, we’re taking the best of the best and putting them together in those cases. I think Stanley has probably been a little more Legacy Stanley, has been a little more focused on pricing core competency in the organization and I think we have some opportunities to drive that through the new company and help drive some positive improvement in gross margins in particular in that area but I would also say that I think that inflation is something that we all need to be as Don pointed out, we all need to be cognizant that as this economy heats up, we’re already seeing the early signs of commodity inflation, so there will be some puts and takes here as we go and we’re probably not going to get a 100% price recovery just like we didn’t get a 100% price recovery in legacy Stanley since 04, we got 80%. We can get somewhere between 60 and 80% as a combined company, I think we’ll be doing quite well but it’ll be a lag time in that regard and that’s why Don’s guidance may seem a little cautious to some folks, including you Eric based on something I read. I think its probably appropriate, I think the margin rates that we’re at today certainly seems sustainable to us but you know we’re three weeks into our relationship here, so you know time will tell.

And I guess the follow up, when you originally presented the targets, I think the original presentation was that there would be, I’m looking at a slide that said $0.20 to $0.45 of dilution in year one and there’s a lot of moving parts with these numbers I understand but can you help us understand how this guidance is up from the core Stanley Works guidance for 2010 the stand alone guidance you gave out of 4Q and so it looks like your guidance suggests that this is going to be accretive, the combination will be accretive in year one and the original guidance was for dilution, hopefully that’s clear enough but can you just talk about what that is relative to where we started?

There’s a lot of puts and takes there. But Don will give you more granularity on that, we expected that question.

Eric, your exactly right, its part of the November guidance we provided. We did believe that they would be dilutive in year one, but keep in mind as you know there were some pretty conservative assumptions around top line growth in that November guidance around 2%. Total growth for the entire combined company in year one. Now obviously we are looking at growth rates that are more around four to five percent. Additionally we are starting to see the effects of the leverage from that volume, so you can begin to see the accretive impact of that. And that’s really what’s driving that $0.25 to $0.30 improvement from what we were thinking back in November of last year.

Perfect that’s great, thank you.

Your next question comes from the line of Jim Lucas with Janney Montgomery Scott. Your line is now open.

Thanks a lot. And thank you for a lot of good material in preparation for this because I know a lot has to go into making this into a coherent form to us outsiders. First question, if we look within the CDIY business, you commented that you're not seeing a lot of orders in the home center channel. Could you comment on the sell-through of what you're seeing there? And then the second question big picture as it relates to synergies, if you could comment early read on revenue synergies, of what you're thinking there? And with regards to SFS, how long do you think it takes Black & Decker to get the rhythm that Stanley has from an SFS standpoint?

Jim this is John. I never heard four questions knocked in so quickly, well we don’t have you on the buzzer but, let me try them all and Jim will jump into help. In terms of restocking and sell through, it’s a little early as you know and everyone on the call knows the home centers close their fiscal books at the end of January which is always a relatively soft month for we as suppliers in terms of volume. So when we shift in February and March we do believe its helping with restocking. In terms of POS all I will say is there is nothing out of the ordinary yet. And I don’t want to say any more than that, the simple reason being without inventory there can’t be any sell through and inventories have been so low up until about March that we think POS has been constrained, of our lack of inventory at retail. So we’ve seen no dramatic increases, we’ve seen no decreases but the simple answer is it’s one to three months early to make any kind of I would say projection or draw any kind of conclusion based on that. And I hope that its clear, so modest restocking, constant sell through, we think we are going, it’s going to take a few months of inventories. Being at a more robust level in the stores before we can expect the kind of POS lift that we are hoping to see. In terms of revenue synergies its early days, we’ve been in I would say file and agreement across the two companies that they are there as I referenced they are more, it’s much more motivating and inspirational to work on revenue synergies. But I have to say first and foremost, we need to…

And I think everyone needs to understand that when you’re implementing $350 million of Synergies in a $9 billion company, while it may not sound like much on a percentage basis, its really all consuming and hence we’re putting off the revenue synergy, deep dive kind of planning process, a couple of months and SFS may take a little bit longer to implement their cross to platform because we can’t do everything at once. So we’re trying to sequence these things in a rational and orderly manner. But there is that huge opportunity out there and I think also the fact that there are fewer skewers in the power tool business than in the hand tool business will help us, the fact that we got the experience, the joint reference will help us expedite. But it’s going to be a very large undertaking and it will take at least, somewhere in the range of probably 18 to 24, maybe 36 months to get it done to that level. And the last thing I would just comment on the revenue synergies a little bit. I had the opportunity to spend about four weeks visiting far flung regions of the world and meeting the Black & Decker folks and learning about their business in great detail around the world and starting to kind of frame out what the revenue synergy areas might. And I think there’s five really significant ones and some more that I don’t know about yet that will kind of be surfaced during our betting process over the next few months. But they have a very strong organization in Latin America. They have production in Brazil which is expandable, they have a distribution center down there which we don’t have and for those of you that are familiar with…

Extremely helpful, thank you.

Your next question comes from the line of Dennis McGill with Zelman & Associates. Dennis McGill - Zelman & Associates: Good morning, guys. Hi, the first question I was hoping, I believe you touched on the home center trends within the Hand Tool business, but I was hoping you could maybe talk about what you're seeing from point of sale and new orders particularly as you exited the quarter across all the businesses there including the legacy BDK that touches that end channel? And then I had a follow-up question as well.

I’ve said everything that we intend to say up about order and POS at this stage, it is as you know, it’s a very short cycle business, we’ve only had granularity at Black & Decker power tools, orders of POS for 3 weeks and as they say, at this stage restocking has been modestly encouraging but far less than in the industrial channels and its too early to have a view on POS because inventories are only being gradually restored and we have only 3 weeks of data to go on. Dennis McGill - Zelman & Associates: Okay, fair enough. The second question, I believe in the press release you guided towards $600 million of free cash flow for the year. And I was wondering if you could maybe give us some puts and takes as far as what some of the bigger drivers there are and how we might think about that relative to I believe the $1billion or so that the combined entity generated last year?

We’ll talk, there’s a lot of one times in the billion Dennis and obviously the targets of billion plus on an ongoing basis which is a year 3 but we’ve had a lot of discussion on that, Don’s going to give you some of the highlights of where we came out.

Dennis, the $600 million as I mentioned, was mentioned in the press release really has a very modest impact on our working capital included and so an assets what it is if you take the net income or EPS projections that we have, you add back the depreciation and amortization and subtract out CapEx, you pretty much get to that $600 million number and our CapEx tends to be anywhere between two and half percent of our revenue. So even though the kind of boundary you will get to that number. The opportunity for us going forward is clearly continue top line growth and we are seeing the signs of that 2010 if these trends continue then we will have more growth in 11 and 12 but you know working capital is also a significant opportunity for us. And getting to the billion required a modest improvement in the Black & Decker working capital turns of about two turns. And that was really part of that projection that provided back in November. The other thing to keep in mind is that the performance last year of both companies had had on a combined basis about $450 million of working capital benefit in it and we don’t expect that at this point in time and that will peak 2010 but as we move forward as Jim mentioned there is a big opportunity for $800 million of cash flow from working capital.

Your next question comes from the line of Nicole Deblase with Deutsche Bank. Your line is now open.

I just wanted to echo the comments thanking you guys for all the disclosure, I know it probably required a lot of work. So maybe first of all you mentioned a little bit how you're expecting a little bit about your price inflation expectation for the full year. Is there any way you could provide some detail on pricing, when you're expecting to take pricing? Is that something that happens in the back half of the year?

I guess Nicole always we try to be as far ahead of the curve as possible in order to maximize recovery of commodity’s inflation. Steel is as Don pointed out he, he quantified exactly how much it will be, how much we think it will be, what’s built in to our projections. But RMB is huge obviously with product both from our competitors and ourselves sourced from Asia, 5% RMB inflation, its $42 million on an annualized basis. The simple thing to say is when we see that inflation coming it will take one to three months for it to hit our cost of goods. We would be out trying to announce and implement pricing. The second we see it coming, if you assume a six month lag in some customers from the day we announced till the day we get it. We have a three months gap to fill and that’s what, Don’s trying to improve. So simply said we try to be equal to or ahead of the curve, we’ve done a good job, over the last three or four years driven by the central pricing Center of Excellence and people from that organization being embedded within each of the business units. And that’s were we’ll stay, we’ll try to stay equal to or ahead of the curve and both commodities and RMB inflation are going to be very, very big external factors or market driven factors to look at. Importantly as it relates to the impact of RMB inflation, we are not in this alone, anyone whether its private label of the home centers or a foreign competition in CDIY they are going to be impacted as much or more as we are. So while the numbers are big the forces in the marketplace will, our presence that will suggest we won’t be alone in the need to achieve pricing to maintain margin.

Okay thanks, John, that's really helpful. And then maybe if you could comment a little bit on how Power and CDIY core growth in 1Q compared to your internal plans? I guess I was a little surprised by the volume declines given the mid-to-high single-digit growth we've seen out of both Danaher and Cooper this quarter?

Well let me start by saying that both Danaher and Cooper are far more industrial oriented than our CDIY business if you look at their before the JV’s their portfolios and when you combine it together it doesn’t change anything. So you have to really if you want to get a Danaher, Cooper, Stanley, Black & Decker comparison or at least Stanley Legacy comparison. You really have to kind of blend the CDIY and the industrial results and I think you saw the surge in our industrial business as well which was very comparable to what they experienced.

Okay. That’s fair. And lastly for me, what sort of seasonal pick up do you guys expect for security in the second quarter?

It’s always the case that versus two in a, obviously not versus 2Q 09, but 1Q to 2Q, we get historically a good seasonal pick up in our mechanical security business. I think Black & Decker hardware and home improvement business will be a little bit less seasonal than Stanleys. Specifically, ours is driven hard as you know by two things in Legacy Stanley. The tremendous penetration we have on university campuses and mechanical locking and most of that takes place in June and July which spills into the third quarter where we get on to the campuses to change a lot of locks. That will be less Black & Decker’s mechanical security business will not be tremendously impacted by that. The second point being our access technologies business which we love tends to have a far greater performance in the second and third quarters than first and fourth and its all weather related. We have never had any slide availability issues when we go to install or in some cases, service doors or retro fit doors. That goes away. So what you’ve seen on the Stanley side historically, we would expect again whilst we expect very little of it on the Black & Decker side. Their mechanical security business is less university and large retail oriented. So essentially on our combined basis that the percentage increase which we often attribute to 100 to 200 basis, is cut in half just due to the business twice the size.

Your next question comes from the line of Dan Oppenhiem with Credit Suisse. Your line is now open.

Thanks very much. You talked a lot about this in terms of the CDIY and the encouraging signs in terms of inventory circumstance happening much more on the Industrial side. In this guidance of 4% to 5% revenue growth for the remaining three quarters of the year is there any customer restocking built into that or are you assuming that it takes place later on?

Well, there is obviously is a little bit of customer restocking built into that. And clearly, we experience a little bit of that in the first quarter. And then, what we were to expect that continue in the second quarter and third quarter but I would say that a vast majority of that is really end market pick up.

Thanks very much. And I guess the other question, just wondering about the, and think about the Power Tools. You talk about product launches helping to regain some market share. Do you think that as you deal with the Big-box retailers is your thought at this point that having the right products and those interests will help to you regain the market share, or is there anything different you're looking at with the relationship with them?

So, on the one hand was slow to convert to the emerging technology of lithium-ion one of the reasons being the franchise that it had to protect. The products are available, the pipe line is full. These are the, this is the most powerful and sought after brand in the professional channel that’s the DeWALT brand of course. And we believe not due to the effect that we’re a larger company, we due to the fact that that we’re a larger company, we do due to the fact that Legacy of Stanley brands and DeWALT brands are the most sought after brands in the industry and we have every hope and expectation to gain share as a result of that as we’re able to put these two companies together and introduce our new products. You’ll recall from following Stanley historically new product launches take place in March and October and we start to see the benefits of that in the second obviously and fourth quarters. Every year about $100 million in revenue on the Legacy Stanley CDIY side has been generated from new products, we see no reasons why that shouldn’t continue going forward.

And these DeWALT folks and also Black & Decker power tool folks are very proud and capable people and they didn’t take it very kindly when they missed this window which has cost them some market share points over a year and a half and I can tell you that the passion they have for what they do is going to be manifested in some outstanding new products and I think they’re going to regain their market share both through product and also they had reduced a lot of their brand support in taking costs out and a lot of that brand support, its not a cost synergy per say and its not a revenue synergy per say, we are able to leverage a lot of our existing brand support assets such as our MLB programs we will see with DeWALT in four parts, probably already have and also in our premier football over in Europe, you’ll see DeWALT at the games now and so around the world in our Nascar you’ll see the same thing. So we really are beefing up the brand support, at the same time the products are going at a nice, I expect that will help the market share as well.

Your next question comes from the line of Peter Lisnic with Robert W. Baird. Your line is now open.

I guess first question if we could just go back to the revenue synergies and you laid out those five as sort of the targets. I'm wondering if those are more, are they plug and play sort of initiatives. In other words, what sort of capital costs should we think about as you try to enter some of these or take advantage of some of these strategic opportunities?

Pete, there’s good news and bad news there. The good news is there’s essentially no capital required to do what Jim talked about and I think he articulated extraordinarily well and that’s the positive. The negative is a lot of experience sitting around this table and throughout our combined entities, say as logical as it is and as easy as it sounds, it takes two to three times as long to realize those synergies as Mike’s seen reasonable at first blush. A lot of cross training on product, a lot of the fact that folks know and understand their legacy customers and product lines, that they need to be properly incented to go achieve these synergies without losing focus on the core business and as if you will qualitative or subjective as that all sounds, Jim and I and all the folks at Black & Decker, particularly in the regions, have all had the same experience. It takes longer because it is not as easy as it sounds. We will get there with very little capital but its all about protecting the core while we layer this on and get out of them as soon as we can. We’ll have a better flavor for what those are and how quickly we might achieve them as we live together for 3 to 6 months as opposed to 3 to 6 weeks. So stay tuned and at some point in time particularly when we get the entire investment community together for an Analyst Day, who knows a year from now and we put out some new three year projections we will have a lot more granularity on that for you. But no capital, longer time than you might be tempted to put in your model.

No, totally understand. Thanks for that color. If we could just get back to the I guess the cash flow commentary where I'm a little bit, I see some optimism, guess you're doing $600 million in free cash flow this year. And Jim, you talked about an opportunity of freeing up $800 million, but you also laid out a target of $1 billion pro-forma. Can you, you sort of set the bars for us when you're talking about the cost savings synergies and how to think about that. Can you also give us some of the puts and takes and why we shouldn't be more optimistic than your $1 billion target on the free cash flow front?

Peter this is Don. I think it’s really going to depend on what happens over the next few years and clearly there is significant cost synergies. Jim laid out some of the working capital opportunities that we have as a company. But also we have to keep in mind that those working capital opportunities will take some time to achieve. We feel comfortable that we can achieve a lot of them, but the actual to ability to achieve them in a 24 month period is much different than ultimately achieving them, so those are all factors that need to be considered as well as the volume pick up that we might experience as a company for the next two to three years, little bit of question mark. So there is different way that you can model it to be more optimistic clearly that we get you to something greater than a billion. But at this point in time we still think that number makes a lot of sense and as time evolves as we go forward we will continue to update as we see appropriate.

That is all the time we have today for Q&A. I would now like to turn the call back over to the presenters.

Thanks everyone for joining in today. Again if you have questions feel free to reach out to me after the call.

This now concludes today’s conference call. You may now disconnect.