-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JJ3BIJY1TyCGTEDreK4xUn8NI7Atu7uQyTCXpdDn5ckW9mHWL0a8TnKRJmpjrSif U63Vz5sAIMeK5yPUNzNzaQ== 0000093556-95-000004.txt : 19950424 0000093556-95-000004.hdr.sgml : 19950424 ACCESSION NUMBER: 0000093556-95-000004 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951230 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950421 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STANLEY WORKS CENTRAL INDEX KEY: 0000093556 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 060548860 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 002-52002 FILM NUMBER: 95530095 BUSINESS ADDRESS: STREET 1: 1000 STANLEY DR STREET 2: P O BOX 7000 CITY: NEW BRITAIN STATE: CT ZIP: 06053 BUSINESS PHONE: 2032255111 8-K 1 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 19, 1995 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) Item 5. Other Events. 1. On April 19, 1995, 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 19, 1995 reporting on Stanley's first quarter sales and earnings. 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 20, 1995 By: \s\Stephen S. Weddle Name: Stephen S. Weddle Title: Vice President, General Counsel and Secretary Exhibit (21)(i) APRIL 19, 1995 STANLEY REPORTS RECORD 1ST QUARTER SALES AND EARNINGS New Britain, Connecticut...The Stanley Works today announced first quarter sales of $643 million which were 10% higher than the $586 million reported last year. Net earnings were $29 million compared with $26 million last year. Earnings per share of $.65 represented a 14% increase over earnings per share of $.57 reported for the first quarter 1994. Richard H. Ayers, Chairman and Chief Executive Officer stated, "We are pleased to report that 1995 has begun with a continuation of the strong internal growth that we experienced last year. These volume gains, which are spread across all businesses, added 9% to sales during the quarter. This pattern reflects both the strength and diversity in the geographic markets and industries we serve as well as our aggressive initiatives to increase sales. Price increases also contributed a modest 1% to our sales total." Mr. Ayers continued, "While our sales performance in this quarter achieved our targeted goal we are not as satisfied with our earnings improvement. However, we recognize that our commitment to the long-term growth of our company necessitates that we sacrifice some short-term profitability increases in order to accomplish strategic manufacturing rationalization as well as to invest in marketing and sales efforts to enhance future revenues." Gross margins reported for the first quarter 1995 were 32.0%, compared with 32.7% reported in the same quarter last year. Much of the decline in margin was attributable to costs incurred in connection with closing a manufacturing plant and integrating production into existing facilities of the Mechanics Tools division. While these expenses are expected to continue into the second quarter, it is anticipated that the project will ultimately generate an overall positive contribution to earnings and the division's future competitive cost structure will be significantly enhanced. Operating expenses were 22.9% of sales compared with 22.8% in the prior year. Efficiencies realized from the increased sales volume were more than offset by planned expenditures targeted at geographic and new market expansion. -2- Interest-net expense for the first quarter was 1.2% of sales, or $7 million, compared with 1.3% in the prior year. Other-net expenses were $5 million, or .7% of sales, compared with $9 million, or 1.5% of sales last year. Other-net in the prior year included some small non-recurring charges as well as higher foreign currency transaction losses. Net sales in the United States for the first quarter increased 8%. Consistent with prior year trends, internal growth of 9% accounted for substantially all of the sales gain. Price increases contributed 1% to sales; however, this increase was more than offset by a 2% decline in sales due to divestiture activity. Operating margins of 10.3% reflected costs associated with the Mechanics Tools plant rationalization. Europe continued the performance improvements begun last year with sales increasing 22% in the first quarter. Internal volume gains contributed 9% and price increases contributed 2%. The translation of strengthening European currencies increased sales by 11%. Operating margins improved to 11.5% from 11.0% in the prior year. Operating margin improvement would have improved further if not for the continuing impact of operating inefficiencies at our Acmetrack facility in France. Net sales in Other Areas increased 5% over the prior year, reflecting internal growth of 6% realized across most regions. The net effect of price increases and currency translation decreased sales by 1%. Operating profits were $5.0 million compared with $5.9 million in the prior year. Net sales for the Tools segment increased 10% for the quarter, primarily the result of volume gains of 8% realized across all businesses. Price increases added 2% to sales, however, this increase was partially offset by a 1% decrease due to divestiture activity. The effect of foreign currency translation increased sales by 1%. Operating profits of $53 million were 10% higher than the prior year and operating margins of 11.0% were unchanged. Net sales for the Hardware segment increased 9% with 8% contributed by internal growth, primarily in the U.S. Foreign currency translation added 1%. Operating margins of 10.0% declined from 11.5% reported in the first quarter last year. While improvements in operating margins were realized over the fourth quarter 1994, the operational issues being addressed in our Acmetrack business in France continue to depress profits. Margins were also somewhat negatively impacted by a delay in seating U.S. price increases in certain product lines; however, these increases are now in place and should be reflected in operating profits later in the year. -3- Specialty Hardware sales increased 13% over the previous year. Internal volume increases in this segment continued to be substantial, with gains of 14% in the first quarter. The net effect of discounting and price changes decreased sales by 1%. Operating profits, which are generally lower in the first quarter for this segment, were 3.5% compared with 4.7% in the prior year. The decrease in margins reflects the timing of sales and marketing expenditures targeted at increasing sales volume in the doors business. Commenting on the quarter and outlook for the year, Mr. Ayers stated: "We are pleased that we were able to achieve our targeted sales growth in the first quarter. This increased volume was realized through aggressive competitive efforts which provided good growth for our businesses despite weakness in the U.S. at the retail level and a decline in new housing activity. Our actions are continuing to produce positive incoming business activity, backlogs remain at high levels and we expect to produce solid sales results in the second quarter." Mr. Ayers concluded, "We will continue with our efforts to improve our operations and business systems and to invest in developing new markets. While these expenditures may well impact quarterly comparisons our expectations are for solid improvement and a record year in 1995." Contact: Patricia McLean Manager, Corporate Communications (203) 827-3833 -4- THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Millions of Dollars) FIRST QUARTER 1995 1994 Net Sales $ 643.3 $ 585.7 Costs and Expenses Cost of sales 437.6 394.4 Selling, general and administrative 147.3 133.8 Interest - net 7.5 7.4 Other - net 4.6 8.8 ------- ------- 597.0 544.4 ------- ------- Earnings Before Income Taxes 46.3 41.3 Income Taxes 17.6 15.7 ------- ------- Net Earnings $ 28.7 $ 25.6 ======= ======= Net Earnings Per Share of Common Stock $ 0.65 $ 0.57 ======= ======= Dividends per share $ 0.35 $ 0.34 Average shares outstanding 44,414 44,771 (in thousands) -5- THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Millions of Dollars) April 1 April 2 1995 1994 ASSETS Cash and cash equivalents $ 40.5 $ 36.5 Accounts receivable 428.7 389.6 Inventories 406.6 327.5 Other current assets 38.2 35.5 ------- ------- Total current assets 914.0 789.1 Property, plant and equipment 559.9 561.0 Goodwill and other intangibles 163.5 169.0 Other assets 91.0 77.6 ------- ------- $ 1,728.4 $ 1,596.7 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 124.4 $ 89.1 Accounts payable 106.2 94.2 Accrued expenses 194.1 178.0 ------- ------- Total current liabilities 424.7 361.3 Long-term debt 406.2 380.1 Other long-term liabilities 147.6 161.0 Shareholders' equity 749.9 694.3 ------- ------- $ 1,728.4 $ 1,596.7 ======= ======= -6- THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Millions of Dollars) FIRST QUARTER 1995 1994 Operating Activities Net Earnings $ 28.7 $ 25.6 Depreciation and amortization 21.9 21.2 Other non-cash items 6.2 5.3 Changes in operating assets and liabilities (62.7) (58.0) ------ ------ Net cash used by operating activities (5.9) (5.9) Investing Activities Capital expenditures (13.0) (13.2) Proceeds from sales of assets 0.3 1.6 Other (5.1) (0.3) ------ ------ Net cash used by investing activities (17.8) (11.9) Financing Activities Payments on long-term debt (0.3) (0.5) Net short-term borrowings 29.1 38.2 Proceeds from issuance of common stock 0.5 0.3 Purchase of common stock for treasury (6.4) Cash dividends on common stock (30.0) (29.9) ------ ------ Net cash provided (used) by financing activities (7.1) 8.1 Effect of Exchange Rate Changes on Cash 2.0 2.5 ------ ------ Decrease in Cash and Cash Equivalents (28.8) (7.2) Cash and Cash Equivalents, Beginning of Period 69.3 43.7 ------ ------ Cash and Cash Equivalents, End of First Quarter $ 40.5 $ 36.5 ===== ===== -7- THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Millions of Dollars) THREE MONTHS 1995 1994 Balance at beginning of year $ 744.2 $ 680.9 Net earnings 28.7 25.6 Currency translation adjustment (7.3) (1.7) Cash dividends declared (15.6) (15.2) Net common stock activity (2.3) 2.6 ESOP debt 2.2 2.1 -------- -------- Balance at end of first quarter $ 749.9 $ 694.3 ======== ======== -8- THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Millions of Dollars) FIRST QUARTER 1995 1994 INDUSTRY SEGMENTS Net Sales Tools Consumer $ 173.5 $ 162.6 Industrial 143.8 130.5 Engineered 166.5 148.6 -------- -------- Total Tools 483.8 441.7 Hardware 84.7 77.6 Specialty Hardware 74.8 66.4 -------- -------- Consolidated $ 643.3 $ 585.7 ======== ======== Operating Profit Tools $ 53.0 $ 48.4 Hardware 8.5 8.9 Specialty Hardware 2.6 3.1 -------- -------- Total 64.1 60.4 Net corporate expenses (8.9) (11.0) Interest expense (8.9) (8.1) -------- -------- Earnings before income taxes $ 46.3 $ 41.3 ======== ======== GEOGRAPHIC AREAS Net Sales United States $ 454.6 $ 420.2 Europe 107.8 88.4 Other Areas 80.9 77.1 -------- -------- Consolidated $ 643.3 $ 585.7 ======== ======== Operating Profit United States $ 46.7 $ 44.8 Europe 12.4 9.7 Other Areas 5.0 5.9 -------- -------- Total $ 64.1 $ 60.4 ======== ======== -----END PRIVACY-ENHANCED MESSAGE-----