-----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, IFnvQdz5xI07m9eXc4jDFoh0Amtyn9Qh/m9FmlaaFqSghkab9WUsbFllCryEFGAC HawRbt2AqF9CAmchZGxv9w== 0000093556-96-000007.txt : 19960719 0000093556-96-000007.hdr.sgml : 19960719 ACCESSION NUMBER: 0000093556-96-000007 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: 19960718 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: 96596165 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): July 17, 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 11 pages Exhibit Index is located on Page 4 Item 5. Other Events. 1. On July 17, 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 July 17, 1996 reporting on Stanley s second quarter sales and earnings. 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: July 18, 1996 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 July 17, 1996 Exhibit No. Page (20)(i) 5 Page 4 of 11 pages FOR IMMEDIATE RELEASE July 17, 1996 STANLEY REPORTS SECOND QUARTER GAINS IN CORE EARNINGS FROM RESTRUCTURING New Britain, Connecticut (NYSE:SWK) ... The Stanley Works today announced significant increases in core earnings on a modest sales increase. Richard H. Ayers, Chairman and Chief Executive Officer, commented, "The second quarter improvement in our core earnings continues to reflect benefits realized from the restructuring initiatives we have been implementing. The sales increase reflected strengthening in U.S. consumer channels partially offset by the effects of divestitures and weakness in other markets." Net sales for the second quarter were $677 million, up 3% from prior year sales of $656 million. Net earnings were reported at $33 million, or $.37 per share, and were reduced by $.12 per share related to the company's restructuring program. Gains from recent divestitures were offset by charges for the writedown of assets associated with the company's active marketing of non-strategic product segments and resulted in a net restructuring charge of $4 million (pre-tax), or $.06 per share. The company also incurred $8 million (pre-tax), or $.06 per share, for consulting and transition costs related to its various restructuring activities. Excluding these restructuring charges and restructuring-related transition costs, net income would have been $43 million, or $.49 per share, a 37% increase over the prior year earnings of $31 million, or $.36 per share. Mr. Ayers commented, "Initiatives announced last year as part of our "4x4" restructuring program are now being implemented. While we are incurring some short-term transition costs related to these programs, the planned reductions in our cost structure are beginning to be realized. Our progress to-date is very much on target. We are especially pleased with the success of our cross-divisional procurement teams." Gross margins reported for the second quarter were 33.1% of sales compared with 32.3% in the prior year quarter. The positive effects of our purchasing and other restructuring initiatives contributed to the improvement in margins. In addition, prior year margins had been adversely affected by manufacturing integration costs at our Mechanics Tools division. Operating expenses were 22.6% of sales and included $4 million of consulting and other restructuring- related transition costs. Page 5 of 11 pages Excluding these charges, operating expenses would have been 22.0% of sales compared with 22.7% in the prior year. The improvement in operating expense ratios reflects aggressive cost containment efforts as well as the benefits accruing from restructuring. Net sales in the Tools segment were virtually flat compared with last year and included a 2% reduction due to divestitures. Consumer sales, down 4% from last year, reflected weak non-U.S. markets. Industrial sales were slightly higher than the prior year despite reduced volumes in our storage systems business. Engineered tool sales were strongly influenced by gains in U.S. fastening tools and fasteners. Operating profits for the Tools segment included $7 million of restructuring charges and restructuring-related transition costs. Operating profit margins, excluding these charges, would have been 13.3% of sales compared with 11.7% in the prior year. The Hardware segment experienced strong growth in the second quarter due to the strengthening of U.S. consumer markets. Operating profits, excluding $1 million of restructuring-related transition costs, would have been $14 million, or 16.0% of sales, as compared with $8 million, or 9.4% of sales in the prior year. In addition to restructuring benefits, second quarter margins were enhanced by increased factory utilization on higher volume and the resolution of a legal matter. Sales gains in the Specialty Hardware segment reflected significant growth in the U.S. home center channel for our door products. The recent strategic assessment of our door-related product lines has resulted in an increased focus on growing the entry door business. Operating profits, excluding restructuring-related transition costs, would have been $7 million, or 7.7% of sales, compared with 4.5% in the prior year and reflected lower manufacturing costs. Consolidated operating profit margins, excluding restructuring charges and restructuring-related transition costs, were significantly improved to 12.9% from 10.5% in the prior year period. Geographically, the largest sales gains were in the U.S. due to strengthening in retail channels. Europe and Other Areas, with the exception of Canada, continued to produce weak sales results. Operating profits, excluding restructuring charges and restructuring-related transition costs, would have been $71 million in the U.S., $10 million in Europe, and $6 million in Other Areas. Mr. Ayers commented on the quarter, "Our second quarter operating results clearly benefited from our restructuring efforts and stronger U.S. retail markets. While market conditions are less Page 6 of 11 pages predictable, we believe that the structural changes resulting from our restructuring initiatives will have a sustainable impact on our future profitability. The strategic evaluation of all of our business units and product segments has left us sharply focused on achieving the full potential of our most important businesses. As a result, we have recently begun actions to divest the following product segments determined to be non-strategic: Garage-related products, office products, U.S. manufactured paint applicators, mail order safety products and drywall tape products. We expect the sale of these product segments to be completed by the end of the year." Mr. Ayers commented further, "Our remaining businesses are pursuing plans and initiatives to position themselves competitively for future growth. As we prepare to implement these plans, additional restructuring charges will be reported. In addition, we have begun to direct our efforts toward achieving the growth goals established as part of the 4x4 program. With our strong balance sheet and our focus on reducing working capital and improving cash flow, we are well positioned financially to fund the acquisitions and other business ventures that will help realize these goals." Contact: Richard Huck Vice President, Finance and Chief Financial Officer Tel: (203)-827-3803 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. FOR INTERNET ACCESS: http://www.prnewswire.com. Page 7 of 11 pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited, Millions of Dollars Except Per Share Amounts) Second Quarter Six Months 1996 1995 1996 1995 -------- -------- -------- -------- Net Sales $ 677.2 $ 655.5 $ 1,312.5 $ 1,298.8 Costs and Expenses Cost of sales 453.0 443.6 882.3 881.2 Selling, general and administrative 153.1 148.6 302.1 295.9 Interest - net 5.4 8.1 11.9 15.6 Other - net 4.4 4.4 7.9 9.0 Restructuring 3.8 - 3.8 - -------- -------- -------- -------- 619.7 604.7 1,208.0 1,201.7 -------- -------- -------- -------- Earnings before income taxes 57.5 50.8 104.5 97.1 Income Taxes 24.9 19.3 42.3 36.9 -------- -------- -------- -------- Net Earnings $ 32.6 $ 31.5 $ 62.2 $ 60.2 ======== ======== ======== ======== Net Earnings Per Share of Common Stock $ 0.37 $ 0.36 $ 0.70 $ 0.68 ======== ======== ======== ======== Dividends per share $ 0.18 $ 0.175 $ 0.36 $ 0.35 ======== ======== ======== ======== Average shares outstanding (in thousands) 88,825 88,732 88,830 88,775 ======== ======== ======== ======== Page 8 of 11 pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars) June 29, July 1, 1996 1995 -------- -------- ASSETS Cash and cash equivalents $ 79.5 $ 44.8 Accounts receivable 454.2 436.6 Inventories 344.4 415.6 Other current assets 42.3 35.4 -------- -------- Total current assets 920.4 932.4 Property, plant and equipment 523.9 557.0 Goodwill and other intangibles 121.0 160.8 Other assets 103.3 86.9 -------- -------- $ 1,668.6 $ 1,737.1 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 47.2 $ 137.9 Accounts payable 119.6 98.5 Accrued expenses 204.6 184.8 -------- -------- Total current liabilities 371.4 421.2 Long-term debt 373.3 396.3 Other long-term liabilities 158.2 152.7 Shareholders' equity 765.7 766.9 -------- -------- $ 1,668.6 $ 1,737.1 ======== ======== Page 9 of 11 pages THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) Second Quarter ---------------------------------------------------- Unit ACQ/ Curr- 1996 Price Volume DVT ency 1995 ---------------------------------------------------- INDUSTRY SEGMENTS NET SALES Tools Consumer $ 175.7 1% (2)% (1)% (2)% $ 183.3 Industrial 142.5 3% - - (1)% 140.3 Engineered 177.3 - 7% (4)% - 172.9 -------- -------- Total Tools 495.5 1% 2% (2)% (1)% 496.5 Hardware 87.9 1% 7% - - 81.7 Specialty Hardware 93.8 (2)% 22% 1% - 77.3 -------- -------- Consolidated $ 677.2 1% 4% (1)% (1)% $ 655.5 ======== ======== OPERATING PROFIT Tools $ 58.8 $ 57.9 Hardware 12.7 7.7 Specialty Hardware 6.7 3.5 -------- -------- Total 78.2 69.1 Net corporate expenses (13.7) (9.0) Interest expense (7.0) (9.3) -------- -------- Earnings before income taxes $ 57.5 $ 50.8 ======== ======== GEOGRAPHIC AREAS NET SALES United States $ 493.2 1% 7% (2)% - $ 466.0 Europe 101.0 1% - 1% (5)% 104.5 Other Areas 83.0 1% (2)% - (1)% 85.0 -------- -------- Consolidated $ 677.2 1% 4% (1)% (1)% $ 655.5 ======== ======== OPERATING PROFIT United States $ 63.4 $ 50.5 Europe 9.3 11.7 Other Areas 5.5 6.9 -------- -------- Total $ 78.2 $ 69.1 ======== ======== Page 10 of 11 pages THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) Year to Date ---------------------------------------------------- Unit ACQ/ Curr- 1996 Price Volume DVT ency 1995 ---------------------------------------------------- INDUSTRY SEGMENTS NET SALES Tools Consumer $ 348.4 1% (2)% - (1)% $ 356.8 Industrial 282.9 3% (3)% - - 284.1 Engineered 341.3 - 5% (4)% - 339.4 -------- -------- Total Tools 972.6 1% - (1)% (1)% 980.3 Hardware 171.1 2% 1% - - 166.4 Specialty Hardware 168.8 (1)% 10% 2% - 152.1 -------- -------- Consolidated $ 1,312.5 1% 2% (1)% (1)% $ 1,298.8 ======== ======== OPERATING PROFIT Tools $ 110.7 $ 110.9 Hardware 22.3 16.2 Specialty Hardware 9.0 6.1 -------- -------- Total 142.0 133.2 Net corporate expenses (22.9) (17.9) Interest expense (14.6) (18.2) -------- -------- Earnings before income taxes $ 104.5 $ 97.1 ======== ======== GEOGRAPHIC AREAS NET SALES United States $ 942.7 1% 3% (2)% - $ 920.6 Europe 209.1 1% (2)% 1% (2)% 212.3 Other Areas 160.7 1% (3)% - (1)% 165.9 -------- -------- Consolidated $ 1,312.5 1% 2% (1)% (1)% $ 1,298.8 ======== ======== OPERATING PROFIT United States $ 108.8 $ 97.2 Europe 20.9 24.1 Other Areas 12.3 11.9 -------- -------- Total $ 142.0 $ 133.2 ======== ======== Page 11 of 11 pages -----END PRIVACY-ENHANCED MESSAGE-----