-----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, VZDoZWVLXTSmQL0s2r59wg8PttNjXq1eI+nyl5x7Sx7dApi1Sa2uxFuO4oJmJ6kG hxyJVrgOLVyRsiWoiQLoiw== 0000093556-98-000017.txt : 19980716 0000093556-98-000017.hdr.sgml : 19980716 ACCESSION NUMBER: 0000093556-98-000017 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980715 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980715 SROS: NYSE SROS: PCX 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: SEC FILE NUMBER: 001-05224 FILM NUMBER: 98666443 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 15, 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 9 Pages Exhibit Index is located on Page 4 Item 5. Other Events. 1. On July 15, 1998, the Registrant issued a press release announcing second quarter earnings. Attached as Exhibit (20)(i) is a copy of the Registrant's press release. 2. On July 15, 1998, the Board of Directors of the Registrant authorized the repurchase of up to four million shares of the Registrant's Common Stock in order to satisfy the demand for shares under the Registrant's various stock purchase and stock option plans and avoid the dilution that would otherwise be caused by transactions under these plans. Management anticipates that these purchases will take place over the next few years. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) 20(i) Press release dated June 15, 1998 discussing expected second quarter results. Page 2 of 9 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 15, 1998 By: Stephen S. Weddle Name: Stephen S. Weddle Title: Vice President, General Counsel and Secretary Page 3 of 9 Pages EXHIBIT INDEX Current Report on Form 8-K Dated July 15, 1998 Exhibit No. Page 20(i) 5 Page 4 of 9 Pages FOR IMMEDIATE RELEASE Exhibit (20) (i) THE STANLEY WORKS CORE EARNINGS UP 6% IN 2ND QUARTER; ANNOUNCES 7.5% INCREASE IN DIVIDEND PAYMENT New Britain, Connecticut, July 15, 1998: The Stanley Works (NYSE: "SWK") announced that "core" earnings increased by 6% in its second quarter ended July 4, 1998. Core results exclude restructuring charges, restructuring-related transition costs and certain other non-recurring costs. Second quarter core net income increased to $52.4 million, or $.58 per diluted share, from prior-year second quarter core earnings of $49.5 million, or $.55 per diluted share. Core operating margin improved to 13.5% from 12.9%, driven by higher volume, better productivity and reduced material costs, partially offset by weaker prices and a stronger dollar. The company's actual reported earnings were $42.2 million, or $.47 per diluted share, compared with the prior year's second quarter net loss of $64.5 million, or $.72 per diluted share. These amounts reflect $16.3 million, or $.11 per share, of restructuring-related transition and other costs incurred in the second quarter this year. Included in 1997's second quarter earnings were $137.2 million, or $1.11 per share, of restructuring charges and $23.6 million, or $.16 per share, of restructuring-related transition and other non-recurring costs incurred. Second quarter net sales were up 3% to $692 million from $674 million in the same period last year, including the negative effects of pricing and currency translation. Unit sales volume from ongoing businesses was up 3%. This increase was led by the Mac Tools(r) and U. S. consumer tools components of the mechanics tools business and fastening systems in North America. Mac Tools had double-digit percentage sales growth again this quarter. "This was the eleventh consecutive quarter in which core earnings per share grew, the last six while we have been undergoing fundamental changes in virtually every aspect of our business," said John M. Trani, Chairman and Chief Executive Officer. "The quarter began with very weak volume growth due to slowing of our European markets and management of inventories to lower levels by our larger customers. Toward the latter part of May, sales volumes returned to previous levels and incoming orders were strong. Our improvement in core operating margin shows continued progress toward establishing the lower cost structure necessary to continue our investments for growth." Page 5 of 9 Pages Core gross margins were up to 35.5%, from 34.9% in 1997, as higher unit volume and cost reduction efforts impacted the consumer tools, entry doors, mechanics tools and Mac Tools(r) margins positively. In addition, as expected, the Mac Direct(tm) venture, provided higher gross margin that was somewhat offset by selling, general and administrative expenses which were 22.1% of sales, the same as in last year's second quarter. While the reallocation of resources continues to have a positive effect on gross margins, there is greater spending on brand and product development. Management continues to gauge the latter to achievement of restructuring savings. Restructuring-related transition costs represent consulting, moving, start-up and duplicative facility costs. Other costs excluded from "core" results include year-2000 systems compliance costs. As previously announced, the company expects to incur approximately $100 million of such restructuring-related transition and other costs during the two-year period from mid-1997 through mid-1999. The company also announced today that its Board of Directors approved a third quarter dividend of $.215 per share on the company's common stock, an increase of 7.5% over the second quarter dividend of $.20 per share. The dividend is payable on Tuesday, September 29, 1998 to shareholders of record at the close of business on Tuesday, September 8, 1998. Mr. Trani stated: "We are proud that 1998 dividend payments will extend our records for the longest consecutive annual and quarterly dividend payments of any industrial company on the New York Stock Exchange. This marks the 31st consecutive year in which we are able to increase the annual dividend payment to our shareholders." 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 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 9 Pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, Millions of Dollars Except Per Share Amounts) Second Quarter Six Months 1998 1997 1998 1997 Net Sales $ 691.8 $ 673.6 $ 1,363.7 $ 1,320.2 Costs and Expenses Cost of sales 448.9 446.1 883.9 877.5 Selling, general and administrative 166.1 153.8 337.2 307.0 Interest - net 5.2 4.4 10.0 8.7 Other - net 4.1 13.6 6.9 17.2 Restructuring and asset write-offs - 137.2 - 132.6 624.3 755.1 1,238.0 1,343.0 Earnings (Loss) before income taxes 67.5 (81.5) 125.7 (22.8) Income Taxes 25.3 (17.0) 47.1 5.0 Net Earnings (Loss) $ 42.2 $ (64.5) $ 78.6 $ (27.8) Net Earnings (Loss) Per Share of Common Stock Basic $ 0.47 $ (.72) $ 0.88 $ (0.31) Diluted $ 0.47 $ (.72) $ 0.87 $ (0.31) Dividends per share $ 0.20 $ 0.185 $ 0.40 $ 0.37 Average shares outstanding (in thousands) Basic 89,405 89,525 89,442 89,443 Diluted 90,442 89,525 90,464 89,443 Page 7 of 9 Pages THE STANLEY WORKS AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited, Millions of Dollars) July 4 June 28 1998 1997 ASSETS Cash and cash equivalents $ 77.4 $ 107.6 Accounts receivable 502.9 457.1 Inventories 372.0 323.4 Other current assets 87.4 52.8 Total current assets 1,039.7 940.9 Property, plant and equipment 487.6 508.3 Goodwill and other intangibles 104.1 73.6 Deferred income taxes 37.2 47.6 Other assets 97.4 96.4 $ 1,766.0 $ 1,666.8 LIABILITIES AND SHAREHOLDERS' EQUITY Short-term borrowings $ 132.8 $ 76.4 Accounts payable 172.7 114.6 Accrued expenses 224.3 213.6 Accrued restructuring 77.7 85.6 Total current liabilities 607.5 490.2 Long-term debt 272.0 295.8 Other long-term liabilities 240.6 164.1 Shareholders' equity 645.9 716.7 $ 1,766.0 $ 1,666.8 Page 8 of 9 Pages THE STANLEY WORKS AND SUBSIDIARIES PRICE/VOLUME INFORMATION (Unaudited, Millions of Dollars) NET SALES Second Quarter Unit ACQ/ 1998 Price Volume DVT Currency 1997 INDUSTRY SEGMENTS Tools Consumer $ 183.7 1% 1% - (3)% $ 184.5 Industrial 151.1 - 4% - - 145.3 Engineered 197.9 (2)% 4% 5% (1)% 186.4 Total Tools 532.7 - 3% 2% (2)% 516.2 Hardware 86.3 (1)% 2% - (1)% 86.2 Specialty Hardware 72.8 2% 7% (6)% (1)% 71.2 Consolidated $ 691.8 - 3% 1% (1)% $ 673.6 GEOGRAPHIC AREAS United States $ 502.7 - 5% - - $ 479.7 Europe 109.6 - (1)% 6% (2)% 106.3 Other Areas 79.5 1% (2)% - (8)% 87.6 Consolidated $ 691.8 - 3% 1% (1)% $ 673.6 Year to Date Unit ACQ/ 1998 Price Volume DVT Currency 1997 INDUSTRY SEGMENTS Tools Consumer $ 356.7 1% 2% - (4)% $ 358.9 Industrial 302.2 - 7% - - 281.5 Engineered 386.3 (2)% 5% 6% (1)% 358.5 Total Tools 1,045.2 - 5% 2% (2)% 998.9 Hardware 182.6 (2)% 5% - (1)% 179.3 Specialty Hardware 135.9 2% 4% (9)% (1)% 142.0 Consolidated $ 1,363.7 - 5% - (2)% $ 1,320.2 GEOGRAPHIC AREAS United States $ 978.4 (1)% 7% (1)% - $ 935.5 Europe 229.5 1% 3% 7% (4)% 214.1 Other Areas 155.8 1% (1)% (1)% (8)% 170.6 Consolidated $ 1,363.7 - 5% - (2)% $ 1,320.2 Page 9 of 9 Pages -----END PRIVACY-ENHANCED MESSAGE-----