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): June 23, 1998
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)
Page 1 of 8 Pages
Exhibit Index is located on Page 4
Item 5. Other Events.
1. On June 23, 1998, the Registrant issued a
press release discussing expected second quarter results and
long-term business outlook. Attached as Exhibit (20)(i) is a
copy of the Registrant's press release.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) 20(i) Press release dated June 23, 1998
discussing expected second quarter results
and long-term business outlook.
20(ii) Cautionary statements relating to forward
looking statements included in Exhibit
20(i).
Page 2 of 8 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: June 23, 1998 By: Stephen S. Weddle
Name: Stephen S. Weddle
Title: Vice President,
General Counsel and
Secretary
Page 3 of 8 Pages
EXHIBIT INDEX
Current Report on Form 8-K
Dated June 23, 1998
Exhibit No. Page
20(i) 5
20(ii) 7
Page 4 of 8 Pages
FOR IMMEDIATE RELEASE Exhibit (20) (i)
THE STANLEY WORKS DISCUSSES 2ND QUARTER AND LONG-TERM
BUSINESS OUTLOOK
New Britain, Connecticut, June 23, 1998: The Stanley Works (NYSE:
"SWK") said today that it expects earnings for its second quarter,
which will end July 4, 1998, to be moderately above levels achieved
in the same period last year, but below current Wall Street
consensus estimates of $.63 "core" earnings per diluted share. In
the second quarter of 1997, the company reported "core" earnings of
$50 million, or $.55 per diluted share. Core results exclude
restructuring charges, restructuring-related transition costs and
certain other non-recurring costs.
The shortfall reflects lower than expected volume. A confluence of
factors experienced early in the quarter could not be overcome
despite a relatively healthy last few weeks of incoming orders.
These include inventory corrections at the company's larger
customers, a slowing in Europe from a robust first quarter,
insufficient capacity to serve higher-than-expected demand for
several new products and weaker currency comparisons. Order levels
in the last few weeks have signaled a return to first quarter-type
volume gains.
At volume levels moderately above last year, cost savings are being
offset by lower prices and higher investments in product and brand
development, whose benefits will be manifested in the future. While
the latter are being matched by restructuring savings, the volume
shortfall could not be overcome during the quarter.
The company also announced actions to address near-term earnings
growth. Spending has been decreased consistent with lower sales
estimates, including the closure of the Fernley, Nevada
distribution center and acceleration of previously-announced
restructuring reductions of 500 positions.
John M. Trani, Chairman and Chief Executive Officer, commented on
the anticipated results and outlook for the balance of the year.
"Clearly, this quarter is disappointing. Strong business volumes of
the last several weeks were insufficient to offset a weak start.
Based upon recent order patterns, new product introductions,
savings from productivity programs and the actions being announced
today, we anticipate "core" earnings consistent with Wall Street
consensus estimates for the third and fourth quarters. "
Finally, addressing the company's long-term growth programs, Mr.
Trani offered encouraging observations: "Our reallocation of
Page 5 of 8 Pages
resources to new product innovation and brand development is
underway, and we have increased considerably our financial
commitments to those initiatives. The Stanley brand is much
stronger than anticipated, and we will be announcing a new campaign
in the fall to enhance further its image. The long-term
opportunity for us to become a Great Brand is unchanged. "
The Stanley Works, an S&P 500 company, is a worldwide supplier of
tools, hardware and door systems for professional, industrial and
consumer use.
Investors Gerard J. Gould Media Vance N. Meyer
Contact: Director, Investor Relations Contact: Director, Communication
(860) 827-3833 office & Public Affairs
(860) 658-2718 home (860) 827-3871 office
(203) 929-9502 home
This press release contains forward looking statements as to the company's
ability to meet current earnings expectations for the third and fourth quarters
and achieve long-term growth. Cautionary statements accompanying these
forward-looking statements are set forth, along with this news 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 8 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
ability to achieve the core earnings per share performance
currently estimated by analysts for the third and fourth quarters
of 1998 and long term growth. The company's ability to achieve the
estimated core earnings per share for the third and fourth quarters
of 1998 depends on the continuation of the stronger volume
experienced during the last few weeks; market acceptance of new
products being introduced later this year; and realizing the
savings anticipated from the company's on-going productivity
programs, the closure of the Fernley, Nevada distribution center
and acceleration of the previously planned reduction of 500
positions.
The productivity programs currently underway include the
reallocation of resources that is aimed at simplifying the
organization, changing the workforce composition and standardizing
operating mechanisms. The success of the resource reallocation is
dependent upon the development and execution of comprehensive plans
for the facility consolidations; the implementation of process
improvements in the company's manufacturing operations in order to
meet customer requirements for on-time delivery, quality and value;
the ability of the organization to complete the transition to a
product management structure without losing focus on the business;
the ability to recruit, train and retain high level employees to
execute the necessary changes; the availability of vendors to
perform non-core functions; the need to respond to significant
changes in product demand during the transition; the complexity and
ultimate extent of year-2000 compliance efforts; and unforeseen
events.
The company's ability to achieve savings from the acceleration of
the previously announced termination of 500 positions and the
closure of the distribution center in Nevada announced today will
depend on whether any labor issues related either to the
terminations or to the closure can be promptly resolved and whether
the closure can be executed without disrupting customer service.
The company's ability to generate long term growth depends on
successfully freeing up resources to fund new product and brand
development and new ventures to broaden its markets. Success at
developing new products will depend on the ability of the new
product development process to foster creativity and identify new
products that will be successful in the marketplace. Success at
developing the Stanley(R) brand will depend on the effectiveness of
Page 7 of 8 Pages
the fall campaign and other actions being planned to enhance the
image of the Stanley(R) brand and increase sales. The achievement
of growth through new ventures will depend upon the ability to
successfully identify, negotiate, consummate and integrate into
operations acquisitions, joint ventures and/or strategic alliances.
The company's ability to achieve the estimated earnings results and
long term growth will also be affected by external factors that may
occur during the remainder of this year. These include pricing
pressures within the company's markets and the need to defend
market share in the face of intense price competition; other
changes in the company's competitive markets; the continued
consolidation of customers in consumer channels; increasing global
competition; changes in trade, monetary and fiscal policies and
laws; inflation; currency exchange fluctuations and the impact of
dollar/foreign currency exchange rates on the competitiveness of
products; and recessionary or expansive trends in the economies of
the world in which the company operates.
Page 8 of 8 Pages
