<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): April 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 April 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 April 20, 1994
reporting on Stanley's first quarter
sales and earnings.
<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: April 26, 1994
<PAGE>
Exhibit (21)(i)
April 20, 1994
STANLEY REPORTS IMPROVED FIRST QUARTER SALES AND EARNINGS
New Britain, Connecticut...The Stanley Works announced today improve-
ments in first quarter sales and earnings. Richard H. Ayers,
Chairman and Chief Executive Officer, noted, "First quarter sales of
$586 million were the highest first quarter sales ever experienced by
Stanley and represented a 6% increase over the prior year. Net
earnings of $26 million represented an 11% increase over first
quarter 1993 and was slightly higher than the record set in the first
quarter 1989. These improvements are the result not only of
strengthening markets, but of our continued focus on operational
excellence."
Net sales growth was generated primarily by unit volume increases,
the most significant of which was in the U.S. Only minor price
increases were realized increasing sales by 1%; however, this
increase was offset by the negative effects of currency. The incre-
mental effect of acquisitions increased sales by an additional 1%.
First quarter earnings per share of $.57 represented a 12% increase
over comparable earnings per share of $.51 reported in 1993. The
$.51 per share reported for 1993 excludes the effects of the
accounting change for FAS 112.
Gross margins improved to 32.7% from 32.3% in the prior year quarter.
The improvement in margins was even more notable when compared with
31.2% reported in the fourth quarter 1993. Manufacturing effi-
ciencies achieved from increased volume, especially in our Mechanics
Tools division, were principally responsible for the improvement.
Operating expenses were also reduced, as a percent of sales, to 22.8%
compared with 23.5% in the first quarter 1993.
Interest-net expenses of $7 million were 1.3% of first quarter sales,
generally consistent with the prior year. Other-net expenses for the
period were $9 million compared with $4 million in the same quarter a
year ago. Included in Other-net in 1993 was a pretax gain of $24
million ($.33 per share) from the sale of a non-operating asset and
charges of $22.7 million ($.31 per share) for contingency reserves.
GEOGRAPHIC AREAS Net sales in the U.S. were up 6%, principally from
internal growth. The U.S. industrial, engineered and construction
markets continued to exhibit strong growth. Price increases of 1%
were offset by the net incremental effects of acquisitions and
divestitures.
Net sales in Europe for the first quarter were 6% higher than last
year, reflecting a 3% unit volume increase primarily within the
consumer tools businesses. Recent acquisitions increased sales by
5%. Minor price increases added 1% to sales, while the currency
effects of a stronger dollar decreased sales by 3%.<PAGE>
<PAGE>
Net sales in Other Areas increased 5% for the quarter compared with
the same period a year ago. Strong internal growth in the Pacific
Rim more than offset continued weakness in Canada and Australia and
resulted in a net 3% increase in unit sales. In addition, the
incremental effect of acquisitions increased sales by 3%. The net
effect of currency and price was a 1% decrease in sales. Operating
profits of $6 million were lower than the prior year as a result of
the integration costs associated with a recent acquisition.
SEGMENTS Net sales in the Tools segment increased 6% for the quarter
primarily the result of internal growth in our industrial and
engineered tools categories. Consumer tool businesses continued to
experience only modest growth. Price increases of 1% were offset by
the negative effects of currency. The incremental effect of
acquisitions added 1% to sales. Operating profits increased 28% from
the first quarter 1993 to $48 million. Operating profits reported in
1993 included approximately $4 million of restructuring charges.
Operating margins of 11% were much improved over prior year margins
reported of 9.1% (10.0% without the one-time charges).
Hardware segment net sales were 2% lower than first quarter sales
reported a year ago. Unit volume declined by 2% and was the result
of weak consumer activity in Canada and Europe and, to a lesser
extent, in the U.S. Net price increases of 1% were offset by the
negative effects of currency. Operating profits of $9 million
included costs associated with an earthquake that damaged our
Chatsworth, California mirror manufacturing facility. Operating
margins of 11.5% would have been 13.2% excluding the incurred
property losses related to the earthquake. Operating margins in the
first quarter 1993 were 13.6%.
Specialty Hardware sales for the first quarter 1994 were 13% higher
than the first quarter of 1993. The gain was almost entirely the
result of higher unit volume in the U.S. Operating margins, which
are generally lower in the first quarter for this segment, were 4.7%,
representing a significant improvement over margins of 1.2% reported
last year. Prior year margins were depressed due to raw material
cost increases, especially in wood, and manufacturing process
problems.
OUTLOOK We consider the first quarter results to be early
confirmation that our optimism for 1994 is well founded. Strength in
the industrial and construction markets in the U.S. should continue
to contribute to our results. We expect improving conditions in our
consumer markets as the year progresses assuming that the interest
rate environment remains favorable for homeowners and consumers. We
continue to feel positive about the outlook for 1994.
Contact: Patricia R. McLean
Manager, Corporate Communications
Telephone: 203-827-3833
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Millions of Dollars)
<TABLE>
<CAPTION>
FIRST QUARTER
1994 1993
<S> <C> <C>
Net Sales $ 585.7 $ 553.4
Costs and Expenses
Cost of sales 394.4 374.7
Selling, general and
administrative 133.8 130.1
Interest - net 7.4 7.3
Other - net 8.8 3.8
------- -------
544.4 515.9
------- -------
Earnings Before Income Taxes
and Cumulative Effect of
Accounting Change 41.3 37.5
Income Taxes 15.7 14.5
------- -------
Earnings Before Cumulative
Effect of Accounting Change 25.6 23.0
Cumulative Effect of Accounting
Change for Postemployment
Benefits (8.5)
------- -------
Net Earnings $ 25.6 $ 14.5
======= =======
Net Earnings Per Share of
Common Stock:
Before Cumulative Effect of
Accounting Change $ 0.57 $ 0.51
Cumulative Effect of
Accounting Change (0.19)
------- -------
Net Earnings Per Share of
Common Stock $ 0.57 $ 0.32
======= =======
Dividends per share $ 0.34 $ 0.33
Average shares outstanding 44,771 45,274
(in thousands)
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Millions of Dollars)
<TABLE>
<CAPTION>
April 2 April 3
1994 1993
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 36.5 $ 77.9
Accounts receivable 389.6 388.8
Inventories 327.5 321.7
Other current assets 35.5 35.7
------- -------
Total current assets 789.1 824.1
Property, plant and equipment - net 561.0 561.5
Goodwill and other intangibles 169.0 173.5
Other Assets 77.6 75.8
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$ 1,596.7 $ 1,634.9
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Notes payable $ 89.1 $ 118.4
Accounts payable 94.2 99.7
Accrued expenses 178.0 221.5
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Total current liabilities 361.3 439.6
Long-term debt 380.1 369.0
Other long-term liabilities 161.0 153.3
Shareholders' equity 694.3 673.0
------- -------
$ 1,596.7 $ 1,634.9
======= =======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Millions of Dollars)
<TABLE>
<CAPTION>
FIRST QUARTER
1994 1993
Cash Provided By Operations
<S> <C> <C>
Net Earnings $ 25.6 $ 14.5
Depreciation and amortization 21.2 22.1
Provision for postemployment benefits 13.5
Net gain on sale of non-operating asset (24.0)
Other non-cash items 5.3 5.0
Changes in operating assets
and liabilities (58.0) (35.5)
------ ------
Net cash used by
operating activities (5.9) (4.4)
Investing Activities
Capital expenditures (13.2) (14.5)
Proceeds from sales of assets 1.6 1.1
Proceeds from sale of non-operating asset 32.9
Business acquisitions (0.9)
Other (0.3) 0.9
------ ------
Net cash provided (used) by
investing activities (11.9) 19.5
Financing Activities
Payments on long-term debt (0.5) (1.3)
Proceeds of long-term borrowings 0.1
Net short-term bank financing 38.2 24.8
Proceeds from issuance of common stock 0.3 0.4
Purchase of common stock for treasury (26.5)
Cash dividends on common stock (29.9) (15.0)
------ ------
Net cash provided (used) by
financing activities 8.1 (17.5)
Effect of Exchange Rate Changes on Cash 2.5 (0.8)
------ ------
Decrease in Cash and
Cash Equivalents (7.2) (3.2)
Cash and Cash Equivalents,
Beginning of Period 43.7 81.1
------ ------
Cash and Cash Equivalents,
End of First Quarter $ 36.5 $ 77.9
===== =====
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(Millions of Dollars)
<TABLE>
<CAPTION>
THREE MONTHS
1994 1993
<S> <C> <C>
Balance at beginning of year $ 680.9 $ 696.3
Net earnings 25.6 14.5
Currency translation adjustment (1.7) 0.1
Cash dividends declared (15.2) (15.0)
Net issuance of Common Stock 2.6 (24.9)
ESOP debt 2.1 2.0
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Balance at end of first quarter $ 694.3 $ 673.0
======= ======
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Millions of Dollars)
<TABLE>
<CAPTION>
FIRST QUARTER
1994 1993
INDUSTRY SEGMENTS
Net Sales
Tools
<S> <C> <C>
Consumer $ 162.6 $ 158.9
Industrial 130.5 115.2
Engineered 148.6 141.8
-------- --------
Total Tools 441.7 415.9
Hardware 77.6 78.9
Specialty Hardware 66.4 58.6
-------- --------
Consolidated $ 585.7 $ 553.4
======== ========
Operating Profit
Tools $ 48.4 $ 37.9
Hardware 8.9 10.7
Specialty Hardware 3.1 0.7
-------- --------
Total 60.4 49.3
Net corporate expenses (11.0) (3.5)
Interest expense (8.1) (8.3)
-------- --------
Earnings before
income taxes $ 41.3 $ 37.5
======== ========
GEOGRAPHIC AREAS
Net Sales
United States $ 420.2 $ 396.7
Europe 88.4 83.2
Other Areas 77.1 73.5
-------- --------
Consolidated $ 585.7 $ 553.4
======== ========
Operating Profit
United States $ 44.8 $ 33.7
Europe 9.7 8.6
Other Areas 5.9 7.0
-------- --------
Total $ 60.4 $ 49.3
======== ========
<FN>
See notes to consolidated financial statements.
</TABLE>
<PAGE>
THE STANLEY WORKS AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the consolidated statement of earnings for the first quarter of
1993, Other-net included 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 $7.0 million ($.10 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.
