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 16, 1997
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:(860) 225-5111
Not Applicable
(Former name or former address, if changed since last report)
Exhibit Index is located on Page 4
Page 1 0f 11 Pages
Item 5. Other Events.
1. On April 16, 1997, the Registrant issued a
press release.
Attached as Exhibit (20)(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.
(c) 20(i) Press release dated April 16, 1997
announcing Stanley's first quarter
results.
20(ii) Cautionary statements relating to forward
looking statements included in Exhibit 20
(i).
Page 2 of 11 Pages
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
Date: April 16, 1997 By: Stephen S. Weddle
Name: Stephen S. Weddle
Title: Vice President, General
Counsel and Secretary
Page 3 of 11 Pages
EXHIBIT INDEX
Current Report on Form 8-K
Dated April 16, 1997
Exhibit No. Page
20(i) 5
20 (ii) 11
Page 4 of 11 Pages
FOR IMMEDIATE RELEASE Exhibit (20)(i)
April 16, 1997
THE STANLEY WORKS REPORTS FIRST QUARTER 1997 RESULTS AND
ANNOUNCES NEW "PRODUCT MANAGEMENT" ORGANIZATION
New Britain, CT (NYSE: "SWK") ... The Stanley Works today
announced a significant increase in earnings for its first
quarter ended March 29, 1997. Reported net income was $37
million, or $.41 per share, compared with the prior year's net
income of $30 million, or $.33 per share. Exclusive of
restructuring and other charges, normalized or "core" net income
in the first quarter was $40 million, or $.45 per share, an 18%
increase over prior year core earnings of $34 million, or $.38
per share.
John M. Trani, Chairman and Chief Executive Officer, commented on
the quarter's results: "Our first quarter profit improvement of
18% is noteworthy considering that the first quarter of 1996
represented a 17% increase over the first quarter of 1995. Our
cost structure is becoming leaner and is providing the necessary
foundation for sustained, profitable growth."
Net sales for the quarter were $647 million, 2% over the $635
million recorded in the first quarter last year. Ongoing
businesses were up 6% with particular strength in Fastening
Systems and Hardware.
Overall operating margin on a core basis increased to 11.1%
versus 9.9% last year. Increased volume and the positive effects
of restructuring initiatives, including strong contributions from
cross-divisional purchasing efforts, accounted for most of the
improvement. Profitability in all segments improved: Tools
operating margin was 13.4% versus 11.8% last year, Hardware was
15.1% versus 12.5%, and Specialty Hardware was 4.4% versus 3.7%.
The company also announced that it will reorganize its operations
into a product management structure. Eight newly-formed product
groups will focus their efforts on customers and growth of their
businesses through developing new products and expanding market
scope. They will be complemented by centralized manufacturing,
engineering, sales and service and supported by overall finance,
human resource and information technology organizations.
Additionally, the company is establishing a new corporate
marketing and brand development function, whose focus will be the
nurturing and leveraging of the Stanley brands.
Mr. Trani explained: "Growth requires focus and organization.
This new approach will directly strengthen the Stanley brand,
allow our management team to focus on our customers and on
growing our businesses, facilitate a constant flow of new
Page 5 of 11 Pages
products and finally be more efficient. I look forward to
communicating my plans for growth this summer. The
implementation of this organization is a critical element in
those plans."
Finally, the company announced that Richard Huck, Vice President,
Finance and Chief Financial Officer, will retire effective June
1. Mr. Trani stated: "The company owes much of its success in
recent years to the wise counsel and guidance Rich provided to
Dick Ayers and Alan Hunter during that time period. He has been
an effective overseer of our company's finances, and our strong
financial position is very much to his credit." Theresa Yerkes,
Vice President and Controller, will function as CFO until a
successor to Mr. Huck is identified.
The Stanley Works is a worldwide producer of tools, hardware and
specialty hardware for consumer, home improvement, industrial and
professional use.
Contact: Gerard J. Gould
Director, Investor Relations and Communications
Tel.: (860) 827-3833
This press release contains forward-looking statements.
Cautionary statements accompanying these forward-looking
statements are set forth, along with this release, in a Form 8-K
filed with the Securities and Exchange Commission today.
The Stanley Works corporate press releases are available through
PR Newswire's "Company News On-Call" service. By FAX: dial
1-800-758-5804, ext. 874363 or on the internet at: http://www.prnewswire.com
or http://www.StanleyWorks.com.
Page 6 of 11 Pages
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, Millions of Dollars Except Per Share Amounts)
First Quarter
1997 1996
-------- --------
Net Sales $ 646.6 $ 635.3
Costs and Expenses
Cost of sales 431.4 429.3
Selling, general and administrative 153.2 149.0
Interest - net 4.3 6.5
Other - net 3.6 3.5
Restructuring (4.6) -
-------- --------
587.9 588.3
-------- --------
Earnings before income taxes 58.7 47.0
Income Taxes 22.0 17.4
-------- --------
Net Earnings $ 36.7 $ 29.6
======== ========
Net Earnings Per Share of Common Stock $ 0.41 $ 0.33
======== ========
Dividends per share $ 0.185 $ 0.18
======== ========
Average shares outstanding (in thousands) 88,755 88,815
======== ========
Page 7 of 11 Pages
THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
March 29 March 30
1997 1996
-------- --------
ASSETS
Cash and cash equivalents $ 76.4 $ 39.3
Accounts receivable 453.3 454.9
Inventories 329.2 335.2
Other current assets 40.3 45.8
-------- --------
Total current assets 899.2 875.2
Property, plant and equipment 561.6 554.7
Goodwill and other intangibles 95.9 129.4
Other assets 76.8 69.1
-------- --------
$ 1,633.5 $ 1,628.4
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Short-term borrowings $ 53.7 $ 66.2
Accounts payable 111.2 84.2
Accrued expenses 222.1 198.0
-------- --------
Total current liabilities 387.0 348.4
Long-term debt 298.9 384.0
Other long-term liabilities 155.7 152.7
Shareholders' equity 791.9 743.3
-------- --------
$ 1,633.5 $ 1,628.4
======== ========
Page 7 of 11 Pages
THE STANLEY WORKS AND SUBSIDIARIES
PRICE/VOLUME INFORMATION
(Unaudited, Millions of Dollars)
NET SALES
First Quarter
-----------------------------------------------------
Unit ACQ/ Curr-
1997 Price Volume DVT ency 1996
-----------------------------------------------------
INDUSTRY SEGMENTS
Tools
Consumer $ 178.0 - 6% (4)% (1)% $ 176.8
Industrial 132.6 2% (3)% (2)% - 136.3
Engineered 172.1 (1)% 8% (1)% (1)% 164.0
-------- --------
Total Tools 482.7 - 4% (2)% (1)% 477.1
Hardware 93.1 - 12% - - 83.2
Specialty Hardware 70.8 (3)% 9% (12)% - 75.0
-------- --------
Consolidated $ 646.6 - 6% (3)% (1)% $ 635.3
======== ========
GEOGRAPHIC AREAS
United States $ 455.8 - 6% (4)% - $ 449.5
Europe 107.8 - 4% - (4)% 108.1
Other Areas 83.0 1% 8% (2)% - 77.7
-------- --------
Consolidated $ 646.6 - 6% (3)% (1)% $ 635.3
======== ========
THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
OPERATING PROFIT
First Quarter 1997
-------------------------------------------------
Related Core
Restrg Transition Profit
Reported Charges Costs Core Margin
-------------------------------------------------
INDUSTRY SEGMENTS
Tools $ 56.0 $ 1.1 $ 7.6 $ 64.7 13.4%
Hardware 11.8 0.4 1.9 14.1 15.1%
Specialty Hardware 2.3 0.6 0.2 3.1 4.4%
------ ------ ------ ------
Total 70.1 2.1 9.7 81.9 12.7%
Net corporate
expenses (5.8) (6.7) 0.1 (12.4)
Interest expense (5.6) - - (5.6)
------ ------ ------ ------
Earnings before
income taxes $ 58.7 $ (4.6) $ 9.8 $ 63.9
====== ====== ====== ======
GEOGRAPHIC AREAS
United States $ 53.2 $ 1.2 $ 7.6 $ 62.0 13.6%
Europe 11.3 0.4 1.1 12.8 11.9%
Other Areas 5.6 0.5 1.0 7.1 8.6%
------ ------ ------ ------
Total $ 70.1 $ 2.1 $ 9.7 $ 81.9 12.7%
====== ====== ====== ======
First Quarter 1996
-------------------------------------------------
Related Core
Restrg Transition Profit
Reported Charges Costs Core Margin
-------------------------------------------------
INDUSTRY SEGMENTS
Tools $ 51.9 $ - $ 4.2 $ 56.1 11.8%
Hardware 9.6 - 0.8 10.4 12.5%
Specialty Hardware 2.3 - 0.5 2.8 3.7%
------ ------ ------ ------
Total 63.8 - 5.5 69.3 10.9%
Net corporate
expenses (9.2) - 1.3 (7.9)
Interest expense (7.6) - - (7.6)
------ ------ ------ ------
Earnings before
income taxes $ 47.0 $ - $ 6.8 $ 53.8
====== ====== ====== ======
GEOGRAPHIC AREAS
United States $ 45.4 $ - $ 4.4 $ 49.8 11.1%
Europe 11.6 - 0.6 12.2 11.3%
Other Areas 6.8 - 0.5 7.3 9.4%
------ ------ ------ ------
Total $ 63.8 $ - $ 5.5 $ 69.3 10.9%
====== ====== ====== ======
Page 10 of 11 Pages
Exhibit (20)(ii)
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Certain risks and uncertainties are inherent in the company's
reorganization of its operations into a product management
structure and in its plans for sustained, profitable growth.
The company's ability to successfully implement the new
product management structure is dependent on such factors as the
ability of its employees, with the help of outside consultants,
to develop and execute comprehensive plans to provide for smooth
transitions, the successful recruitment and training of new
employees, the need to respond to significant changes in product
demand during the transition, and unforeseen events. The
company's ability to achieve profitability improvements from the
reorganization is dependent on the reorganization creating
internal efficiencies, and on the ability of the organization to
withstand external factors during the period of transition.
These include pricing pressures; the continued consolidation of
customers in consumer channels; increasing global competition;
changes in trade, monetary and fiscal policies and laws;
inflation and currency exchange fluctuations; and
recessionary or expansive trends in the economies of the
world in which the company operates.
The company's ability to generate sustained, profitable growth
will be dependent on its ability to competitively position its
cost structure, to expand market scope, to gain acceptance of the
company s products within new or developing markets, to
strengthen the Stanley brand, and to continue the development of
successful new products. The achievement of externally-generated
growth will depend upon the ability to successfully identify,
negotiate, consummate and integrate into operations acquisitions,
joint ventures and/or strategic alliances.
Page 11 of 11 Pages
