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): May 8, 2003
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The Stanley Works
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(Exact name of registrant as specified in charter)
Connecticut 1-5244 06-0548860
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1000 Stanley Drive, New Britain, Connecticut 06053
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (860)225-5111
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Not Applicable
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(Former name or former address, if changed since last report)
Exhibit Index is located on Page 3
Page 1 of 7 Pages
Item 7. Financial Statements and Exhibits.
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(c) 20(i) Press Release dated May 8, 2003.
20(ii) Cautionary Statements relating to forward looking statements
included in Exhibit 20(i) and made today in a meeting with
industry analysts, shareowners and other participants.
Item 9. Regulation FD Disclosure.
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In a press release attached to this 8-K, the company provided
earnings guidance for the second quarter and full year 2003 with
additional guidance regarding cash flow in 2003. In a meeting
held today with industry analysts, shareowners and other
participants, the company reviewed this guidance.
Page 2 of 7 Pages
SIGNATURE
Date: May 8, 2003 By: /s/ Bruce H. Beatt
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Name: Bruce H. Beatt
Title: Vice President, General
Counsel and Secretary
EXHIBIT INDEX
Current Report on Form 8-K
Dated May 8, 2003
Exhibit No. Page
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20(i) 4
20(ii) 6
Page 3 of 7 Pages
Exhibit 20(i)
FOR IMMEDIATE RELEASE
THE STANLEY WORKS UPDATES EARNINGS AND CASH FLOW GUIDANCE AT ANNUAL ANALYST
CONFERENCE
New Britain, Connecticut, May 8, 2003. . .The Stanley Works (NYSE: "SWK") will
provide second quarter 2003 earnings guidance, update full-year 2003 earnings
guidance and provide full-year 2003 cash flow expectations at its annual
financial analyst conference today. Such guidance is summarized below.
Forecasted earnings are supplemented with related amounts excluding
restructuring costs, impairment charges and other exit costs. Management
believes these supplemental financial measures provide useful information by
removing the effect of variances in reported results that are not indicative of
fundamental changes in the company's earnings capacity. Reconciliations with
forecasted reported amounts are provided below.
James M. Loree, Executive VP and Chief Financial Officer, will include the
following guidance in his prepared remarks:
Second Quarter 2003
* Sales are expected to increase by 5-7% over $649 million in the prior year.
* Net income is expected to be in the range of $9 - $35 million, or 10 cents -
40 cents per fully diluted share. Pre-tax restructuring costs, asset
impairment charges and other exit costs are expected to total $14 - $49
million, or 12 cents-38 cents per fully diluted share. Aside from such costs
and charges, earnings are expected to be in the range of $42-$45 million, or
48 cents - 52 cents per fully diluted share.
Full Year 2003
* Sales are expected to increase approximately 7-8% over $2,593 million in the
prior year.
* Net income is expected to be $135 - $167 million, or $1.59 - $1.97 per fully
diluted share. Pre-tax restructuring costs, asset impairment charges and
other exit costs are expected to total $62 - $97 million, or 48 cents - 76
cents per fully diluted share, including $17 million recorded in the first
quarter. Aside from such costs and charges, earnings are expected to be in
the range of $200 - $208 million, or $2.35-$2.45 per fully diluted share.
Page 4 of 7 Pages
* Free cash flow (cash from operations less capital expenditures) is expected
to approximate $220 million.
Mr. Loree's presentation and a subsequent question and answer session with
financial analysts will be broadcast live via the internet from 2:15-4pm CST
(3:15-5pm EDT) today and can be accessed at www.stanleyworks.com by selecting
"Investor Relations" and then clicking on the icon established for the event.
Reconciliation to GAAP Earnings
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Reported Charges (a) Excluding Charges
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Second Quarter
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Net Income $9 - $35 $10 - $33 $42 - $45
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Diluted EPS $0.10 - $0.40 $0.12 - $0.38 $0.48 - $0.52
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Full Year
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Net Income $135 - $167 $41 - $65 $200 - $208
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Diluted EPS $1.59 - $1.97 $0.48 - $0.76 $2.35 - $2.45
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(a) Reflects restructuring costs, impairment charges and other exit costs
including those associated with the Mac Direct exit.
The Stanley Works, an S&P 500 company, is a worldwide supplier of tools,
hardware and door systems for professional, industrial and consumer use.
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Contact: Gerard J. Gould, V.P. - Investor Relations
(860) 827-3833 ggould@stanleyworks.com
The Stanley Works corporate press releases are under Financial News in the
Investor Relations section of the company's corporate web site at
www.stanleyworks.com.
This press release contains forward-looking statements. Cautionary statements
accompanying these forward-looking statements are set forth, along with this
news release, in a Form 8-K filed with the Securities and Exchange Commission
today. The Stanley Works corporate press releases are available on the company's
Internet web site at www.stanleyworks.com.
Page 5 of 7 Pages
Exhibit 20 (ii)
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in the company's press release attached to this Current Report on
Form 8-K regarding the company's ability to (i) increase sales in the second
quarter of 2003 by 5-7% over the same period in 2002 and in the full year 2003
by 7-8% over the level of sales in 2002 (ii) deliver second quarter 2003 net
income in the range of $9-$35 million, or $.10-.40 cents per fully diluted share
and full year 2003 net income of $135-$167 million, or $1.59-$1.97 per fully
diluted share; (iii) deliver second quarter 2003 earnings (aside from pre-tax
restructuring costs, asset impairment charges and other exit costs ("Costs") of
$14-$49 million ($.12-.38 cents per fully diluted share)) of $42-$45 million, or
$.48-.52 cents per fully diluted share and full year 2003 earnings (aside from
pre-tax Costs totaling $62-$97 million ($.48-.76 cents per fully diluted share))
of $200-$208 million, or $2.35-$2.45 per fully diluted share; and (iv) generate
free cash flow in 2003 of approximately $220 million are forward looking and
inherently subject to risk and uncertainty.
The company's ability to deliver first quarter and full year 2003 results as
described above (the "Results") is based on current expectations and involves
inherent risks and uncertainties, including factors listed below and other
factors that could delay, divert, or change any of them, and could cause actual
outcomes and results to differ materially from current expectations.
The company's ability to deliver the Results is dependent upon (i) the success
of the company's initiative to increase operating margins to 15% and generate
benefits of approximately $85 million annually and $.40 - .45 cents per share
for the calendar year 2003; (ii) the achievement of the company's initiative to
reduce its outstanding shares by 9% (which in turn is dependent on the content
of FASB's "Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity" when issued); (iii) the success of the company's
efforts to decentralize its operations functions, primarily into its Tools and
Access Solutions business groups; (iv) the success of the company's efforts to
reduce its workforce and close certain facilities, including the resolution of
any labor issues related to such activities, the need to respond to significant
changes in product demand while any facility consolidation is in process and
other unforeseen events; and (v) the success of the company's efforts to
restructure its Mac Tools organization in order to return it to profitability,
including, without limitation, the company's ability to liquidate certain Mac
Tools assets at a satisfactory price.
Page 6 of 7 Pages
The company's ability to deliver the Results is also dependent upon the (i) the
continued success of the company's marketing and sales efforts, including the
company's ability to recruit and retain an adequate sales force; (ii) the
continued success of The Home Depot and Wal-Mart sales initiatives as well as
other programs to stimulate demand for company products; (iii) the success of
recruiting programs and other efforts to maintain or expand overall Mac Tools
truck count versus prior years; (iv) the ability of the sales force to adapt to
changes made in the sales organization and achieve adequate customer coverage;
(v) the ability of the company to fulfill demand for its products; and (vi) the
absence of increased pricing pressures from customers and competitors and the
ability to defend market share in the face of price competition.
The company's ability to achieve the objectives discussed above will also be
affected by external factors. These external factors include pricing pressure
and other changes within competitive markets, the continued consolidation of
customers in consumer channels, inventory management pressures on the company's
customers, increasing competition, changes in trade, monetary, tax and fiscal
policies and laws, inflation, currency exchange fluctuations, the impact of
dollar/foreign currency exchange and interest rates on the competitiveness of
products and the company's debt program, the strength of the U.S. Economy and
the strength of foreign currencies, including but not limited to the Euro, the
impact of events that cause or may cause disruption in the company's
distribution and sales networks such as the recent closure of ports on the West
Coast, war, terrorist activities, political unrest and recessionary or expansive
trends in the economies of the world in which the company operates.
Page 7 of 7 Pages