-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L9+a/efwIQSmhJ3UJ2iIu7RKsAy/3SUsFSMVXwBev4oE3HxAs0ThTmtULnXwh+Ry svCNKrsxodWED3WHkc0y/g== 0000093556-96-000009.txt : 19961017 0000093556-96-000009.hdr.sgml : 19961017 ACCESSION NUMBER: 0000093556-96-000009 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961228 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961016 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: 96644117 BUSINESS ADDRESS: STREET 1: 1000 STANLEY DR STREET 2: P O BOX 7000 CITY: NEW BRITAIN STATE: CT ZIP: 06053 BUSINESS PHONE: 8062255111 MAIL ADDRESS: STREET 1: 1000 STANLEY DR CITY: NEW BRITAIN STATE: CT ZIP: 06053 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):October 16, 1996 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 12 pages Exhibit Index is located on Page 4 Item 5. Other Events. 1. On October 16, 1996, 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 October 16, 1996 reporting on Stanley's third quarter sales and earnings. Page 2 of 12 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: October 16, 1996 By: Stephen S. Weddle Name: Stephen S. Weddle Title: Vice President, General Counsel and Secretary Page 3 of 12 pages EXHIBIT INDEX Current Report on Form 8-K Dated October 16, 1996 Exhibit No. Page (20)(i) 5 Page 4 of 12 pages FOR IMMEDIATE RELEASE Exhibit (20)(i) October 16, 1996 THE STANLEY WORKS REPORTS THIRD QUARTER EARNINGS New Britain, Connecticut (NYSE: SWK) ... The Stanley Works today announced a significant increase in earnings for its third quarter ended September 28, 1996. Net sales for the quarter were $673 million, an increase of 3% over sales of $656 million in the third quarter of 1995. Commenting on the sales volume, Richard H. Ayers, Chairman and Chief Executive Officer, stated: "Our ongoing businesses experienced unit volume growth of 4% with particular strength in the engineered tools, consumer tools and hardware markets. Business and product line divestitures diminished our sales by $13 million this quarter. Unit volume gains were also realized in all geographic areas." Reported net earnings were $38 million, or $.42 per share, compared with the prior year's third quarter net loss of $2 million, or $.02 per share. Exclusive of restructuring charges and restructuring-related transition costs recorded in both periods, "core" net income was $42 million, or $.48 per share, a 34% increase over the prior year's third quarter core earnings of $32 million, or $.35 per share. Gross margin reported for the third quarter was 33.4% of sales compared with 31.7% in the prior year's third quarter. Increased volume and the positive effects of 4X4 restructuring initiatives, including strong contributions from the company's commodity purchasing teams, accounted for most of the improvement in gross margin. Operating expenses were 22.6% of sales in the third quarters of both 1996 and 1995. Excluding restructuring-related transition costs recorded in both third quarters, operating expenses decreased to 22.0% of sales from 22.2% in the prior year. Interest expense, net of interest income, decreased to 0.8% of sales from 1.2% in the prior year, on lower average borrowings. A net restructuring charge of $3.1 million was recorded in the third quarter, reflecting the reorganization of certain operations offset by gains from the divestiture of non-strategic business units. These divestitures included a tax-advantaged sale of a product segment which resulted in the $3.1 million pre-tax restructuring charge having only a $.01 per share after-tax effect. Restructuring-related transition costs of $7.4 Page 5 of 12 pages million (pre-tax), or $.05 per share after-tax, were incurred in the third quarter in connection with the implementation of the company's Perfect Customer Service program and other restructuring activities. Consolidated segment operating profit margin, exclusive of restructuring charges and restructuring-related transition costs, improved to 12.6% from 10.1% in the prior year's third quarter. Mr. Ayers continued: "We are seeing improvements in our profitability attributable to increased volume and as a direct result of our 4X4 restructuring initiatives. I am pleased with the progress toward positioning our company's cost structure for future growth. We have begun to invest some of these savings in activities that are expected to generate profitable internal sales growth. As we have indicated previously, the company will continue to incur additional restructuring charges and higher levels of restructuring-related transition costs as we continue to implement our 4X4 restructuring initiatives over the next year." The attached table, "Business Segment Information", provides clarification of reported results for the third quarters of 1996 and 1995, reconciling them with normalized "core" results. Core results exclude restructuring charges and restructuring-related transition costs and serve as the basis of the Tools, Hardware and Specialty Hardware segment comments which follow. In the Tools segment overall, unit volume sales increased 4% over last year. Consumer tools were up 5%, with strength in all geographic areas. Engineered tools increased 6%, reflecting strong sales volume of fastening tools and fasteners in North America and Canada. Industrial tools unit volume decreased 1%, reflecting continued low volume in our U.S. storage systems business. Core operating profits increased to 13.4% of sales, from 10.8% in the prior year. This improvement results from increased volume, purchasing savings and other 4X4 restructuring initiatives, especially in our Fastening Systems division. The Hardware segment experienced 4% unit growth in the third quarter, with exceptionally strong demand in the U.S. consumer markets. Core operating profits increased to 12.6% of sales, from 6.4% in the prior year. This improvement results from increased volume, production levels which favorably absorbed factory overhead costs and the positive effects of purchasing and other 4X4 restructuring initiatives. The Specialty Hardware segment experienced 7% unit growth, with continued strong U.S. home center demand for door products. Core operating profits declined to 8.7% of sales, from 9.5% in the prior year. A 3% price decline in this segment, attributable to Page 6 of 12 pages a competitive pricing environment in the U.S. commercial market for automated door products, offset the effects of increased volume and improvement from 4X4 restructuring initiatives. Mr. Ayers commented on the quarter and general business conditions: "Stronger retail markets provided us with moderate sales growth in the third quarter. Our operating results demonstrate that 4X4 restructuring efforts are streamlining our cost structure as they were intended to do. We are ever more sharply focused on achieving the full potential of all our businesses and have made considerable progress toward the divestiture of non-strategic product segments. We expect the divestiture process to be completed by the end of the current year." Continuing, Mr. Ayers stated: "Our business units have made great strides in positioning themselves competitively. Their improved cost structures and efficient production capabilities are important to the achievement of profitable growth. Our future growth will come from leveraging these improvements in the marketplace, from acquisitions and from other business ventures. We are well-positioned to identify, finance and manage the growth we seek." Contact: Gerard J. Gould Director, Investor Relations and Communications Tel.: (860) 827-3833 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 7 of 12 pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited, Millions of Dollars Except Per Share Amounts) Third Quarter Nine Months 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $ 672.9 $ 655.7 $ 1,985.4 $ 1,954.5 Costs and Expenses Cost of sales 448.4 448.0 1,330.7 1,329.2 Selling, general and administrative 151.7 148.0 453.8 443.9 Interest - net 5.2 7.6 17.1 23.2 Other - net 5.5 3.7 13.4 12.7 Restructuring 3.1 41.5 6.9 41.5 -------- -------- -------- -------- 613.9 648.8 1,821.9 1,850.5 -------- -------- -------- -------- Earnings before income taxes 59.0 6.9 163.5 104.0 Income Taxes 21.3 8.6 63.6 45.5 -------- -------- -------- -------- Net Earnings $ 37.7 $ (1.7) $ 99.9 $ 58.5 ======== ======== ======== ======== Net Earnings Per Share of Common Stock $ 0.42 $ (0.02) $ 1.12 $ 0.66 ======== ======== ======== ======== Dividends per share $ 0.185 $ 0.18 $ 0.545 $ 0.53 ======== ======== ======== ======== Average shares outstanding (in thousands) 88,847 88,579 88,832 88,718 ======== ======== ======== ======== Page 8 of 12 pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars) Sept 28, Sept 30, 1996 1995 -------- -------- ASSETS Cash and cash equivalents $ 85.0 $ 48.5 Accounts receivable 473.8 453.4 Inventories 342.4 391.1 Other current assets 39.8 35.6 -------- -------- Total current assets 941.0 928.6 Property, plant and equipment 526.1 543.0 Goodwill and other intangibles 112.1 145.8 Other assets 110.4 83.8 -------- -------- $ 1,689.6 $ 1,701.2 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 29.9 $ 112.6 Accounts payable 128.6 98.9 Accrued expenses 238.8 202.9 -------- -------- Total current liabilities 397.3 414.4 Long-term debt 350.6 396.3 Other long-term liabilities 154.0 140.8 Shareholders' equity 787.7 749.7 -------- -------- $ 1,689.6 $ 1,701.2 ======== ======== Page 9 of 12 pages THE STANLEY WORKS AND SUBSIDIARIES PRICE/VOLUME INFORMATION (Unaudited, Millions of Dollars) NET SALES Third Quarter ----------------------------------------------------- Unit ACQ/ Curr- 1996 Price Volume DVT ency 1995 ----------------------------------------------------- INDUSTRY SEGMENTS Tools Consumer $ 187.5 - 5% (2)% - $ 181.9 Industrial 132.9 3% (1)% (1)% - 131.4 Engineered 173.3 - 6% (4)% - 170.9 -------- -------- Total Tools 493.7 1% 4% (3)% - 484.2 Hardware 84.3 - 4% - - 81.1 Specialty Hardware 94.9 (3)% 7% 1% - 90.4 -------- -------- Consolidated $ 672.9 1% 4% (2)% - $ 655.7 ======== ======== GEOGRAPHIC AREAS United States $ 478.3 - 4% (3)% - $ 472.6 Europe 105.1 1% 5% 1% (2)% 100.3 Other Areas 89.5 1% 8% - (1)% 82.8 -------- -------- Consolidated $ 672.9 1% 4% (2)% - $ 655.7 ======== ======== Year to Date ----------------------------------------------------- Unit ACQ/ Curr- 1996 Price Volume DVT ency 1995 ----------------------------------------------------- INDUSTRY SEGMENTS Tools Consumer $ 535.9 1% - (1)% (1)% $ 538.7 Industrial 415.8 2% (2)% - - 415.5 Engineered 514.6 - 5% (4)% - 510.3 -------- -------- Total Tools 1,466.3 1% 2% (2)% (1)% 1,464.5 Hardware 255.4 1% 2% - - 247.5 Specialty Hardware 263.7 (1)% 9% 1% - 242.5 -------- -------- Consolidated $ 1,985.4 1% 2% (1)% - $ 1,954.5 ======== ======== GEOGRAPHIC AREAS United States $ 1,421.0 1% 3% (2)% - $ 1,393.2 Europe 314.2 1% 1% 1% (2)% 312.6 Other Areas 250.2 1% - - - 248.7 -------- -------- Consolidated $ 1,985.4 1% 2% (1)% - $ 1,954.5 ======== ======== Page 10 of 12 pages THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) OPERATING PROFIT Third Quarter 1996 ------------------------------------------------- Related Core Restrg Transition Profit Reported Chgs Costs Core Margin ------------------------------------------------- INDUSTRY SEGMENTS Tools $ 56.7 $ 3.7 $ 5.8 $ 66.2 13.4% Hardware 9.6 - 1.0 10.6 12.6% Specialty Hardware 7.8 - 0.5 8.3 8.7% ------ ------ ------ ------ Total 74.1 3.7 7.3 85.1 12.6% Net corporate expenses (8.7) (0.6) 0.1 (9.2) Interest expense (6.4) - - (6.4) ------ ------ ------ ------ Earnings before income taxes $ 59.0 $ 3.1 $ 7.4 $ 69.5 ====== ====== ====== ====== GEOGRAPHIC AREAS United States $ 59.3 $ 1.6 $ 5.5 $ 66.4 13.9% Europe 10.2 1.8 0.4 12.4 11.8% Other Areas 4.6 0.3 1.4 6.3 7.0% ------ ------ ------ ------ Total $ 74.1 $ 3.7 $ 7.3 $ 85.1 12.6% ====== ====== ====== ====== Third Quarter 1995 ------------------------------------------------- Related Core Restrg Transition Profit Reported Chgs Costs Core Margin ------------------------------------------------- INDUSTRY SEGMENTS Tools $ 20.7 $ 30.6 $ 0.9 $ 52.2 10.8% Hardware (0.9) 5.8 0.3 5.2 6.4% Specialty Hardware 7.7 0.6 0.3 8.6 9.5% ------ ------ ------ ------ Total 27.5 37.0 1.5 66.0 10.1% Net corporate expenses (11.8) 4.5 1.1 (6.2) Interest expense (8.8) - - (8.8) ------ ------ ------ ------ Earnings before income taxes $ 6.9 $ 41.5 $ 2.6 $ 51.0 ====== ====== ====== ====== GEOGRAPHIC AREAS United States $ 19.1 $ 30.2 $ 1.5 $ 50.8 10.7% Europe 3.3 6.8 - 10.1 10.1% Other Areas 5.1 - - 5.1 6.2% ------ ------ ------ ------ Total $ 27.5 $ 37.0 $ 1.5 $ 66.0 10.1% ====== ====== ====== ====== Page 11 of 12 pages THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) OPERATING PROFIT Year to Date 1996 ------------------------------------------------- Related Core Restrg Transition Profit Reported Chgs Costs Core Margin ------------------------------------------------- INDUSTRY SEGMENTS Tools $ 167.4 $ 4.4 $ 16.3 $ 188.1 12.8% Hardware 31.9 - 3.2 35.1 13.7% Specialty Hardware 16.8 - 1.5 18.3 6.9% ------ ------ ------ ------ Total 216.1 4.4 21.0 241.5 12.2% Net corporate expenses (31.6) 2.5 1.4 (27.7) Interest expense (21.0) - - (21.0) ------ ------ ------ ------ Earnings before income taxes $ 163.5 $ 6.9 $ 22.4 $ 192.8 ====== ====== ====== ====== GEOGRAPHIC AREAS United States $ 168.1 $ 1.7 $ 17.4 $ 187.2 13.2% Europe 31.1 1.8 1.4 34.3 10.9% Other Areas 16.9 0.9 2.2 20.0 8.0% ------ ------ ------ ------ Total $ 216.1 $ 4.4 $ 21.0 $ 241.5 12.2% ====== ====== ====== ====== Year to Date 1995 ------------------------------------------------- Related Core Restrg Transition Profit Reported Chgs Costs Core Margin ------------------------------------------------- INDUSTRY SEGMENTS Tools $ 131.6 $ 30.6 $ 0.9 $ 163.1 11.1% Hardware 15.3 5.8 0.3 21.4 8.6% Specialty Hardware 13.8 0.6 0.3 14.7 6.1% ------ ------ ------ ------ Total 160.7 37.0 1.5 199.2 10.2% Net corporate expenses (29.7) 4.5 1.1 (24.1) Interest expense (27.0) - - (27.0) ------ ------ ------ ------ Earnings before income taxes $ 104.0 $ 41.5 $ 2.6 $ 148.1 ====== ====== ====== ====== GEOGRAPHIC AREAS United States $ 116.3 $ 30.2 $ 1.5 $ 148.0 10.6% Europe 27.4 6.8 - 34.2 10.9% Other Areas 17.0 - - 17.0 6.8% ------ ------ ------ ------ Total $ 160.7 $ 37.0 $ 1.5 $ 199.2 10.2% ====== ====== ====== ====== Page 12 of 12 pages -----END PRIVACY-ENHANCED MESSAGE-----