<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 1994
The Stanley Works
(Exact name of registrant as specified in charter)
Connecticut 1-5224 06-058860
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1000 Stanley Drive, New Britain, Connecticut 06053
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(203) 225-5111
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
1. On July 20, 1994, the Registrant issued a
press release.
Attached as Exhibit (21)(i) is a copy of the
Registrant's press release. This Exhibit is incorporated herein
by reference.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(21)(i) Press release dated July 20, 1994
reporting on Stanley's second quarter
sales and earnings.
<PAGE> <PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized
THE STANLEY WORKS
By: \s\Stephen S. Weddle
Name: Stephen S. Weddle
Title: Vice President, General
Counsel and Secretary
Date: July 22, 1994
<PAGE>
Exhibit (21)(i)
July 20, 1994
STANLEY REPORTS RECORD SECOND QUARTER RESULTS
New Britain, Connecticut . . . Richard H. Ayers, Chairman and Chief
Executive Officer of The Stanley Works announced today, "We are
pleased with our solid performance for the quarter and for the first
six months of 1994. Sales in the second quarter of $629 million were
11% higher than the prior year and were a record for any quarter. Net
earnings of $33.7 million, or $.75 per share, represented a 25%
increase over 1993 and were records for second quarter results."
Mr. Ayers noted, "Significant internal growth from all our business
units was the primary contributor to the current quarter sales
increase. Our businesses serving the U.S. industrial and
construction markets had the most significant impact on the overall
10% increase in unit volume growth. The net incremental effect of
acquisitions and divestitures increased sales by 1%, while the effects
of a 1% price increase were offset by the negative effects of
currency."
Gross margins of 33.4% were substantially improved over margins of
32.1% reported in the prior year. This improvement was achieved
through a combination of cost and volume efficiencies together with
the absence of expenses related to manufacturing process changes and
some extraordinarily high raw material costs that were incurred in the
second quarter last year. Operating expenses also improved to 22.2% of
sales compared with 22.7% in the prior year.
Interest-net expenses for the quarter were 1.2% of sales compared with
1.1% in the prior year, reflecting a higher interest rate environment.
Other-net of $9.0 million, or 1.4% of sales, for the second quarter
compared with $4.0 million, or 0.7% of sales, in the same quarter a
year ago. The increase in Other-net included additional reserves
established in this year for environmental and plant closing expenses
while the prior year benefitted from favorable adjustments to
contingency reserves.
-- more --
<PAGE>
<PAGE>
(page 2)
Net sales for the first six months of 1994 were $1.2 billion, up 9%
from 1993 sales of $1.1 billion. Net earnings of $59.3 million, or
$1.32 per share, were 19% higher than prior year earnings of $50.0
million, or $1.11 per share. Net earnings and earnings per share in
1993 exclude the effects of a change in accounting principle.
Net sales in the U.S. for the second quarter increased by 12%,
entirely the result of internal growth. Strong order activity
continued in our industrial and engineered tool categories and was
augmented by strengthening in consumer tools. Price increases of 1%
were offset by the negative effect of the company's divestiture
activity.
Sales in Europe continued to improve with an overall increase of 8%
for the quarter. Unit volume growth of 4% reflected increased sales
activity especially in the industrial tools category. The incremental
effect of a recent acquisition increased sales by 6%. Minor price
increases combined with the negative effects of currency resulting in
a net 2% decrease from the prior year. Operating profits of $8.0
million were similar to the prior year while operating margins,
reflecting more aggressive sales efforts, declined from 10.3% to 9.3%.
Net sales in Other Areas increased by 13% for the quarter. Internal
volume growth of 9% included strengthening in our Canadian businesses.
The incremental effect of acquisitions increased sales by 5%; however,
the net effect of price increases and negative currency translation
decreased sales by 1%.
Net sales for the Tools segment increased 11%, principally the result
of 10% internal sales growth. Consumer tools' unit volume growth of
6% was an improvement over more modest gains reported in the first
quarter. The industrial and engineered tool categories continued with
strong order activity and experienced double digit internal growth for
the quarter. Price increases of 2% were substantially offset by the
negative effects of currency. The net incremental effect of
acquisitions and divestitures increased sales by 1%. Operating
profits of $59.3 million were 19% higher than the comparable quarter
last year. Operating margins of 12.5% compared with 11.7% in the
prior year and reflected increased volume and operating efficiencies.
<PAGE> -- more --
(page 3)
Net sales in the Hardware segment increased 6% over the prior year
almost entirely due to unit volume increases. Minor price increases
were offset by the negative effects of currency. Operating profits
improved significantly to $10.8 million with operating margins of
13.7% comparing favorably with 10.1% in the prior year. Even when
the effects of property losses related to the California earthquake
are excluded, margins in the second quarter were improved over those
reported in the first quarter.
Specialty Hardware net sales for the second quarter were 17% higher
than the same quarter last year. As in the other segments, this
increase was driven primarily by unit volume gains. Price increases
of 1% were offset by a minor currency impact and resulted in no net
effect on sales. Operating profits of $4.2 million were substantially
improved from $1.8 million reported last year. The prior year's
operating results were depressed because our Door Systems business
experienced unusually high wood prices and related manufacturing
process problems.
On June 18, the company completed the divestiture of its Taylor Rental
business with the sale of the remaining company-owned stores and
related assets.
Mr. Ayers stated, "Our results through the second quarter give us
continued confidence in our expectations for 1994. We are moving
forward with our expansion in Asia and are encouraged by our new
product development activities. We feel confident that these
initiatives position us well for continued long-term growth. Although
there is some reason to be concerned about interest rates and the
uncertainties of steel availability and price, we believe our
prediction in the 1993 annual report for higher sales and
substantially higher profits in 1994 is still on target."
##############
CONTACT: Patricia McLean
Manager, Corp. Communications
(203) 827-3833
<PAGE>
<PAGE>
(page 4)
<TABLE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Millions of Dollars)
<CAPTION>
SECOND QUARTER SIX MONTHS
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Net Sales $ 628.8 $ 565.2 $ 1,214.5 $ 1,118.6
Costs and Expenses
Cost of sales 418.6 383.5 813.0 758.2
Selling, general and
administrative 139.4 128.5 273.2 258.6
Interest - net 7.8 6.0 15.2 13.3
Other - net 9.0 4.0 17.8 7.8
------- ------- -------- -------
574.8 522.0 1,119.2 1,037.9
------- ------- -------- -------
Earnings Before Income Taxes
and Cumulative Effect of
Accounting Change 54.0 43.2 95.3 80.7
Income Taxes 20.3 16.2 36.0 30.7
------- ------- -------- -------
Earnings Before Cumulative
Effect of Accounting Change 33.7 27.0 59.3 50.0
Cumulative Effect of Accounting
Change for Postemployment
Benefits (8.5)
------- ------- -------- -------
Net Earnings $ 33.7 $ 27.0 $ 59.3 $ 41.5
======= ======= ======== =======
Net Earnings Per Share of
Common Stock:
Before Cumulative Effect of
Accounting Change $ 0.75 $ 0.60 $ 1.32 $ 1.11
Cumulative Effect of
Accounting Change (0.19)
------- ------- -------- -------
Net Earnings Per Share of
Common Stock $ 0.75 $ 0.60 $ 1.32 $ 0.92
======= ======= ======== =======
Dividends per share $ 0.34 $ 0.33 $ 0.68 $ 0.66
Average shares outstanding 44,829 44,971 44,798 45,152
(in thousands)
</TABLE>
[FN]
See notes to consolidated financial statements.
<PAGE>
<PAGE>
(page 5)
<TABLE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
<CAPTION>
July 2 July 3
1994 1993
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 33.8 $ 18.5
Accounts receivable 416.4 388.7
Inventories 352.6 329.4
Other current assets 32.4 32.7
------- -------
Total current assets 835.2 769.3
Property, plant and equipment - net 557.8 555.4
Goodwill and other intangibles 169.7 170.3
Other assets 80.9 76.1
------- -------
$ 1,643.6 $ 1,571.1
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 86.3 $ 92.3
Accounts payable 101.2 93.6
Accrued expenses 194.2 186.9
------- -------
Total current liabilities 381.7 372.8
Long-term debt 385.6 364.8
Other long-term liabilities 158.0 150.9
Shareholders' equity 718.3 682.6
------- -------
$ 1,643.6 $ 1,571.1
======= =======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
(page 6)
<TABLE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
SECOND QUARTER SIX MONTHS
1994 1993 1994 1993
Operating Activities
<S> <C> <C> <C> <C>
Net Earnings $ 33.7 $ 27.0 $ 59.3 $ 41.5
Depreciation and amortization 21.6 17.7 42.8 39.8
Provision for postemployment benefits 13.6
Net gain on sale of non-operating asset (24.0)
Other non-cash items 11.2 0.4 16.5 5.3
Changes in operating assets
and liabilities (27.0) (35.1) (85.0) (70.6)
------ ------ ------ ------
Net cash provided by
operating activities 39.5 10.0 33.6 5.6
Investing Activities
Capital expenditures (17.9) (11.7) (31.1) (26.2)
Proceeds from sales of assets 4.8 0.9 6.4 2.0
Proceeds from sale of non-operating asset 32.9
Business acquisitions (5.1) (5.1) (0.9)
Other (2.7) (3.6) (3.0) (2.7)
------ ------ ------ ------
Net cash provided (used) by
investing activities (20.9) (14.4) (32.8) 5.1
Financing Activities
Payments on long-term debt (0.2) (65.7) (0.7) (67.0)
Net short-term bank financing (3.7) 39.8 34.5 64.7
Proceeds from issuance of common stock 0.3 0.2 0.6 0.6
Purchase of common stock for treasury (0.8) (0.8) (26.5)
Cash dividends on common stock (15.2) (29.7) (45.1) (44.7)
------ ------ ------ ------
Net cash used by
financing activities (19.6) (55.4) (11.5) (72.9)
Effect of Exchange Rate Changes on Cash (1.7) 0.4 0.8 (0.4)
------ ------ ------ ------
Decrease in Cash and Cash Equivalents (2.7) (59.4) (9.9) (62.6)
Cash and Cash Equivalents,
Beginning of Period 36.5 77.9 43.7 81.1
------ ------ ------ ------
Cash and Cash Equivalents,
End of Second Quarter $ 33.8 $ 18.5 $ 33.8 $ 18.5
===== ===== ===== ======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
(page 7)
<TABLE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(Millions of Dollars)
<CAPTION>
SIX MONTHS
1994 1993
<S> <C> <C>
Balance at beginning of year $ 680.9 $ 696.3
Net earnings 59.3 41.5
Currency translation adjustment 1.2 (6.5)
Cash dividends declared (30.5) (29.7)
Net issuance of Common Stock 3.2 (22.9)
ESOP debt 4.2 3.9
-------- -------
Balance at end of second quarter $ 718.3 $ 682.6
======== =======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
(page 8)
<TABLE>
THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Millions of Dollars)
<CAPTION>
SECOND QUARTER SIX MONTHS
1994 1993 1994 1993
INDUSTRY SEGMENTS
Net Sales
Tools
<S> <C> <C> <C> <C>
Consumer $ 179.2 $ 167.9 $ 341.8 $ 326.8
Industrial 129.5 112.7 260.0 227.9
Engineered 165.9 145.4 314.5 287.2
-------- -------- -------- -------
Total Tools 474.6 426.0 916.3 841.9
Hardware 78.7 74.6 156.3 153.5
Specialty Hardware 75.5 64.6 141.9 123.2
-------- -------- -------- -------
Consolidated $ 628.8 $ 565.2 $ 1,214.5 $ 1,118.6
======== ======== ======== =======
Operating Profit
Tools $ 59.3 $ 49.9 $ 107.7 $ 87.8
Hardware 10.8 7.5 19.7 18.2
Specialty Hardware 4.2 1.8 7.3 2.5
-------- -------- -------- -------
Total 74.3 59.2 134.7 108.5
Net corporate expenses (10.7) (8.1) (21.7) (11.6)
Interest expense (9.6) (7.9) (17.7) (16.2)
-------- -------- -------- -------
Earnings before
income taxes $ 54.0 $ 43.2 $ 95.3 $ 80.7
======== ======== ======== =======
GEOGRAPHIC AREAS
Net Sales
United States $ 457.3 $ 409.6 $ 877.5 $ 806.3
Europe 86.0 80.0 174.4 163.2
Other Areas 85.5 75.6 162.6 149.1
-------- -------- -------- -------
Consolidated $ 628.8 $ 565.2 $ 1,214.5 $ 1,118.6
======== ======== ======== =======
Operating Profit
United States $ 57.4 $ 43.6 $ 102.2 $ 77.3
Europe 8.0 8.2 17.7 16.8
Other Areas 8.9 7.4 14.8 14.4
-------- -------- -------- -------
Total $ 74.3 $ 59.2 $ 134.7 $ 108.5
======== ======== ======== ======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
<PAGE>
(page 9)
THE STANLEY WORKS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the consolidated statement of earnings for six months
of 1993, Other-net includes a gain of $24.0 million ($.33 per
share) from the sale of a portion of the company's investment
in Max Co., Ltd. Also included in Other-net were additional
charges for a fine levied by U.S. District Court in Missouri
for $5.0 million ($.07 per share) and contingency reserves of
$15.7 million ($.21 per share) related to product liability
litigation, restructuring activities and environmental
remediation.
Certain 1993 amounts in the Business Segment Information
were reclassified to conform to the 1994 presentation.
