James M. Loree
Chief Executive Officer at Stanley Black & Decker
Thank you, Dennis, and good morning, everyone. This morning, we announced a record third quarter, which was powered by 11% growth, primarily a result of an impressive 10% organic growth performance. Customer demand remained at robust levels across commercial and retail end markets. and strong trends continued in homebuilding and remodeling, commercial construction, professional activity and global economic growth. Innovation was also a positive, which is driving demand around electrification and other themes. We're continuing to prioritize meeting this heightened customer demand while operating in an unusually complex supply chain environment. I thank our 56,000 employees around the world for delivering record revenue under the circumstances. And in particular, I want to offer special thanks to our employee makers and plants, DCs and operations organizations as well as our sales and service people for their incredible dedication, agility and resilience to serve our customers during this period as they always do. Tools generated 13% organic growth in what we believe to be the strongest demand environment in our history, resulting from positive secular trends, robust professional activity and strong global markets.
Our brands such as DEWALT, CRAFTSMAN, Stanley and Black & Decker, among others, were fueled by a steady stream of innovation and a strong and resilient supply chain, which is putting great products in the hands of our loyal end users across the globe. Industrial grew 1% organically, driven by continued double-digit growth and share gains in our general industrial and attachment tool businesses. as these end markets remained solid. Industrial growth was tempered, however, by lower auto production activity as OEMs continue to be impacted by electronic and other component shortages. Aerospace also experienced trough conditions as the industry recovery while promising to be likely in the foreseeable future, has yet to occur. Security delivered another strong quarter with 8% organic growth.
The security transformation to a data-enabled cloud-based technology provider is building significant momentum, and our team successfully converted this robust backlog into revenue growth. Order rates were strong and we posted a third straight record quarter and backlog. We're excited about the full potential of these opportunities to support elevated revenue growth in the fourth quarter and beyond. The overall company adjusted operating margin rate was 12.2%, down from the prior year as growth investments and higher supply chain costs that accelerated in the quarter more than offset volume leverage, price mix benefits and margin resiliency. Adjusted earnings per share for the quarter was $2.77, down 4% year-over-year. And similar to most companies engaged in global trade, our supply chain costs were higher this quarter. We have worked tirelessly to get components and finished products to where they need to be to serve this extraordinary customer demand.
Through data analytics, we now have visibility into every container on and off the water, and we utilize this visibility to prioritize and expedite the most critical items, often with premium freight. To offset the additional expenses, we have deployed price increases, surcharges and productivity measures. To be clear, we have made a conscious decision to incur temporarily higher expediting costs to serve our customers and meet demand as effectively as possible. We have sized the pricing and productivity actions to ensure that we are well positioned to address the inflation and achieve margin accretion in 2022. This implies that our actions will be sufficient to restore our margins to normalized levels as the actions catch up to the higher costs in 2022. And further, we remain highly confident in our multiyear growth and margin expansion plans.
There are several positive secular demand trends that are benefiting our businesses, and we remain bullish on the resi and nonresi construction markets as well as the industrial recovery. We have developed an array of growth drivers to position our businesses to capture this opportunity, and we are continuing to invest in innovation, manufacturing, automation, inventory and our supply chain to meet the strong demand in the near term and fuel sustainable growth over the medium and long terms. And now I'll take a moment to review our recently announced MTD and Excel acquisitions.
The combination of these two high-quality complementary companies with our existing outdoor business creates a powerful growth engine with approximately $4 billion of revenue across all categories the $4 billion, we expect approximately $3 million of that in -- of the $4 billion to be a direct result of closing the two transactions in the coming weeks. Even before that, we are starting from a position of strength with strong outdoor brands in DEWALT, CRAFTSMAN and Black & Decker as well as the fastest-growing franchise in cordless electric outdoor products.
Our legacy outdoor business is benefiting from the long-term trend of electrification, primarily now in handheld products and walk-behind mowers. MTD is one of the leading players in U.S. retail with great brands such as Cub Cadet and Troy-Bilt and brings a relentless dedication to innovation. Excel focuses on zero-turn mowers and offers a range of premier commercial grade and prosumer equipment, with Tier 1 niche pro brands such as Hustler and Big Dog. Excel also brings us access to a strong and extensive professional dealer network. These acquisitions are complementary to each other and fill gaps in our current presence in the outdoor space, which brings me to another major growth driver. With these acquisitions, we have an ESG opportunity. to lead large-format electrification and outdoor.
The customer adoption of electrified riders and zero-turn mowers is still in the early stages but the future potential is compelling. In collaboration with MTD, we have been making great progress since 2019 in developing innovative electrified solutions that offer a compelling value proposition in terms of run time, price point, and environmental impact. Additionally, MTD has semiautonomous and autonomous mowing technology, which we will commercialize in the coming years. Outdoor will undoubtedly unleash an array of impressive innovation over the next few years. Global channel development and professional branding are significant additional revenue synergies that we think as we think about ways to grow sales through our future outdoor activities, applying MTD's strong innovation with a leading professional brand like DEWALT presents an excellent opportunity to win the prouser with a full line of gas and electric options.
To fully realize this potential, we plan to build on our existing position in retail as well as expand our sales in the pro dealer network. MTD has a strong presence in the retail channel with approximately 1,500 dealer locations. Excel exclusively distributes through its 1,400 outlet dealer channel, which is largely geographically complementary to MTD's dealers. The opportunities for brand, product and channel revenue synergies to expand sales and carry accretive margins are both meaningful and exciting. And finally, on one more outdoor growth front, we have an opportunity in the $4 billion high-margin parts service segment as we build our presence and serve our customers. The benefits from this growth will also come with margin expansion as we apply our SBD operating model and our global scale to execute on cost synergies, launch margin-accretive innovation and develop a vibrant professional franchise.
We expect these opportunities to provide a pathway to mid-teens or higher margins over the long term. Both acquisitions are currently progressing through their respective regulatory processes. And for MTD, we are happy to say that the United States HSR review is complete. Additional reviews are underway in several other smaller countries. We currently anticipate to close in late 2021 or early '22 for both transactions pending successful completion of the regulatory processes. And as must be obvious, we're excited about the future of outdoor products at SBD. The significant ESG growth and margin opportunities have the potential for excellent value creation in 2022 and beyond. Extreme innovation is at the heart of SBD's culture. It is 1 of our 3 strategic pillars: performance, innovation and social responsibility.
Innovation differentiates all our franchises and defines our brands. Over the last couple of years, we have brought incredible innovation to the market from FLEXVOLT to Atomic and Extreme and now DEWALT power stack and Black & Decker Reviva, which I will cover in a few moments. It is clear that our tools innovation machine has never been stronger. Nonetheless, we are doubling down on our investments in innovation and new product commercialization. These investments will support the largest pipeline we have ever had with new products across all our major categories and end users. Over the last 12 months, we have added approximately 1,300 new employees with deep domain expertise and technical knowledge in critical areas, including sales, engineering, product management, brand, industrial design, e-commerce and end-user insights.
Our supply chain investments are also key innovation enablers moving closer to the customer, adding capacity, improves agility, customer responsiveness and speed to market as we develop and commercialize new products. We have approximately $200 million of new innovation and growth investment projects in process which are included in our second half 2021 run rate. These projects will allow us to effectively better serve the strong global product demand for tools and position us for sustained long-term growth. Earlier this month, we announced our latest breakthrough innovation, the DEWALT POWERSTACK battery, a remarkable design and engineering achievement. POWERSTACK is the world's first power tool battery to leverage lithium-ion pouch cell technology and introduces a new era of performance for DEWALT power tools. POWERSTACK batteries will begin shipping in the fourth quarter of this year with annual growth potential measured in hundreds of millions. This is another example of our leading-edge differentiated innovation, driving the revenue growth potential of our core business.
The POWERSTACK battery is 25% smaller, 15% lighter than our comparable DEWALT 20-volt 2 amp-hour battery and it delivers 5 0% more power with 2x the charge cycles, making this revolutionary design the lightest and most powerful and longest-lasting compact battery from DEWALT. And it is compatible with our DEWALT 20-volt system. The combination of POWERSTACK and our proven capabilities to design and manufacture the best and most compact brushless motors in the industry, we have just unlocked a new dimension for smaller, lighter and more powerful tools with enormous runway ahead. The importance of this innovation cannot be overstated. More power, more compact, lighter, lasts longer, guaranteed tough. We love it and so are the market. DEWALT is again asserting itself as the industry leader in professional power tools. And now for something also very exciting, but quite different. It's never been more important for companies to turn their attention to building a sustainable future for our global community.
The Black & Decker Reviva line is our latest customer offering and creating more sustainable products and driving innovation with purpose. This line of consumer DIY tools features 5 0% post-consumer recycled content in the enclosures, which reduces virgin plastic use and supports closing the loop in a circular economy. Partnering with Eastman to apply their Triton Renew material to our products has created the opportunity to reduce environmental impact, while continuing to develop the performance, durability and quality that our customers require.
We are delighted to have found a long-term partner in Eastman, a company that will support and accelerate our wider, broader commitment to becoming a force for good in society. This product is a great example of how corporations can embrace ESG in a way that provides meaningful innovation to the consumer, reduces our impact on the environment and drives business performance. The Black & Decker revitalization is a major growth opportunity for the company, and Reviva is just one great example of how we're making that happen.
And now I will turn it over to Don to talk about our supply chain investments, our business segment results and how we are positioning the company for sustained long-term growth. Don?