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 22, 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 6 Pages
Exhibit Index is located on Page 4
Item 5. Other Events.
1. On July 22, 1998, the Registrant supplemented
its second quarter earnings release, which was issued on July 15,
1998 as follows:
Core segment profit margin for the second quarter was 14.8% versus
14.7% in 1997. The Tools segment delivered significant operating
profit improvement, rising to 16.4% from 16.0% last year despite
continuation of a competitive pricing environment for fastening
systems. Hardware segment operating profit decreased to 10.0% from
14.2% last year, reflecting both mix and lower than expected
volumes in the Home Decor business. In the beginning of the quarter
Home Decor's largest customers initiated corrections to their
inventory levels, however, the necessary reductions in factory
spending lagged the lower level of sales. Specialty Hardware
operating profit improved to 8.2% from 5.6% in 1997 due primarily
to increased volumes, productivity gains and lower wood prices in
the U.S. entry door business.
Operating profit margins in the U.S. dipped slightly to 15.8% from
an unusually strong 16.1% in the prior year quarter. European
profitability declined to 11.1% of sales from 13.6% in 1997. The
quarter reflected slowing in the company's European markets and
continued pricing pressures in the fastening systems business. In
Other Areas operating margins improved to 13.1% primarily due to
the additional profitability of our Latin American business.
The table, "Business Segment Information" attached hereto as Exhibit
20(i), provides clarification of reported results for the second
quarters and first six months of 1998 and 1997, reconciling them
with normalized core results.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits.
(c) 20(i) Business Segment Information for the second
quarters and first six months of 1998 and
1997.
Page 2 of 6 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: July 22, 1998 By: Stephen S. Weddle
Name: Stephen S. Weddle
Title: Vice President
General Counsel and
Secretary
Page 3 of 6 Pages
EXHIBIT INDEX
Current Report on Form 8-K
Dated July 22, 1998
Exhibit No. Page
20(i) 5
Page 4 of 6 Pages
Exhibit (20) (i)
THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
OPERATING PROFIT
Second Quarter 1998
Related Core
Restrg Transition Profit
Reported Charges Costs Core Margin
INDUSTRY SEGMENTS
Tools $ 76.5 $ - $ 11.1 $ 87.6 16.4%
Hardware 6.4 - 2.2 8.6 10.0%
Specialty Hardware 3.0 - 3.0 6.0 8.2%
Total 85.9 - 16.3 102.2 14.8%
Net corporate
expenses (11.8) - - (11.8)
Interest expense (6.6) - - (6.6)
Earnings before
income taxes $ 67.5 $ - $ 16.3 $ 83.8
GEOGRAPHIC AREAS
United States $ 65.1 $ - $ 14.5 $ 79.6 15.8%
Europe 11.2 - 1.0 12.2 11.1%
Other Areas 9.6 - 0.8 10.4 13.1%
Total $ 85.9 $ - $ 16.3 $ 102.2 14.8%
Second Quarter 1997
Related Core
Restrg Transition Profit
Reported Charges Costs* Core Margin
INDUSTRY SEGMENTS
Tools $ (38.3) $ 110.7 $ 10.4 $ 82.8 16.0%
Hardware 2.6 7.5 2.1 12.2 14.2%
Specialty Hardware (9.8) 13.7 - 3.9 5.6%
Total (45.5) 131.9 12.5 98.9 14.7%
Net corporate
expenses (29.6) 5.3 11.0 (13.3)
Interest expense (6.4) - - (6.4)
Earnings (loss) before
income taxes $ (81.5) $ 137.2 $ 23.5 $ 79.2
GEOGRAPHIC AREAS
United States $ (19.1) $ 87.6 $ 8.5 $ 77.0 16.1%
Europe (12.0) 24.1 2.4 14.5 13.6%
Other Areas (14.4) 20.2 1.6 7.4 8.4%
Total $ (45.5) $ 131.9 $ 12.5 $ 98.9 14.7%
* Includes stock option charge.
Page 5 of 6 Pages
THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
OPERATING PROFIT
Year to Date 1998
Related Core
Restrg Transition Profit
Reported Chgs Costs Core Margin
INDUSTRY SEGMENTS
Tools $ 139.4 $ - $ 23.1 $ 162.5 15.5%
Hardware 20.1 - 4.3 24.4 13.4%
Specialty Hardware 2.9 - 5.2 8.1 6.0%
Total 162.4 - 32.6 195.0 14.3%
Net corporate
expenses (23.3) - - (23.3)
Interest expense (13.4) - - (13.4)
Earnings(loss)before
income taxes $ 125.7 $ - $ 32.6 $ 158.3
GEOGRAPHIC AREAS
United States $ 120.3 $ - $ 28.8 $ 149.1 15.2%
Europe 24.6 - 2.3 26.9 11.7%
Other Areas 17.5 - 1.5 19.0 12.2%
Total $ 162.4 $ - $ 32.6 $ 195.0 14.3%
Year to Date 1997
Related Core
Restrg Transition Profit
Reported Chgs Costs* Core Margin
INDUSTRY SEGMENTS
Tools $ 17.7 $ 111.8 $ 18.0 $ 147.5 14.8%
Hardware 14.4 7.9 4.0 26.3 14.7%
Specialty Hardware (7.5) 14.3 0.2 7.0 4.9%
Total 24.6 134.0 22.2 180.8 13.7%
Net corporate
expenses (35.4) (1.4) 11.1 (25.7)
Interest expense (12.0) - - (12.0)
Earnings (loss) before
income taxes $ (22.8) $ 132.6 $ 33.3 $ 143.1
GEOGRAPHIC AREAS
United States $ 34.1 $ 88.8 $ 16.1 $ 139.0 14.9%
Europe (0.7) 24.5 3.5 27.3 12.8%
Other Areas (8.8) 20.7 2.6 14.5 8.5%
Total $ 24.6 $ 134.0 $ 22.2 $ 180.8 13.7%
* Includes stock option charge
Page 6 of 6 Pages
