Exhibit (20)(i)
FOR IMMEDIATE RELEASE April 17, 1996
STANLEY ANNOUNCES FIRST QUARTER PROFITS UP ON LOWER SALES
New Britain, Connecticut (NYSE:SWK) ... The Stanley Works today
announced first quarter net income of $30 million, or $.67 per
share, which reflected transition costs associated with previously
announced restructuring initiatives. These costs totaled $7
million, or $.09 per share, and included $.04 per share of
consulting and $.05 per share of expenses related to the
consolidation of North American order management and distribution
and other facility closings. Excluding these costs, net income
would have been $34 million, or $.76 per share, an increase of 17%
from the prior year earnings of $29 million, or $.65 per share.
This improved profitability was achieved despite lower sales
volume. First quarter net sales were $635 million, a 1% reduction
from the $643 million reported last year.
Commenting on the results, Richard H. Ayers, Chairman and Chief
Executive Officer said, "The lower sales volume realized in the
first quarter, although disappointing, was not entirely unexpected,
as sales were unusually strong in the same period last year; fourth
quarter 1995 retail activity was weak leaving customers with excess
inventory going into 1996; and our business and product line
divestitures in 1995 resulted in a $6 million reduction in sales
this quarter. Order patterns strengthened throughout the period
and ended on a positive note, with a 3.5% sales increase in March.
We are pleased that despite the lower sales volume and the
continued costs related to our restructuring efforts we were able
to deliver improved profits. The aggressive initiatives we began
in 1995 to realign our cost structure are beginning to pay off."
Gross margins reported for the quarter were 32.4% of sales compared
with 32.0% last year. The improvement in margins, due largely to
the absence of prior year manufacturing integration costs, was
offset somewhat by underabsorption of factory overheads caused by
lower sales volumes and aggressive inventory management. Operating
expenses were 23.4% of sales and included approximately $4 million
of consulting and other restructuring related transition costs.
Excluding these charges, operating expense would have been 22.8% of
sales compared with 22.9% in the prior year.
Net sales in the Tools segment were reduced by $6 million as a
result of 1995 restructuring related divestitures. Excluding this
reduction, first quarter net sales were virtually flat, with volume
declines noted particularly in the industrial tool category.
Operating profits for this segment included approximately $4
million in restructuring related transition costs. Excluding these
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costs, operating profits would have been $56 million, or 11.8% of
sales, compared with $53 million, 11.0% of sales in the prior year.
The absence of manufacturing integration costs in our Mechanics
Tools business contributed to the improvement.
Net sales in the Hardware segment were 2% lower than the prior
year, primarily from volume declines in the U.S., although price
increases partially offset those reductions. Operating profits
were improved from the prior year, reflecting improved performance
in our European Home Decor business. Excluding restructuring
related transition costs of $1 million, operating profits were $10
million, or 12.5% of sales compared with $9 million, or 10% of
sales in the prior year.
Net sales in the Specialty Hardware segment were flat compared to
last year as the effect of a recent acquisition offset unit volume
declines. Operating profits, excluding restructuring related
transition costs of $1 million, were $3 million, or 3.7% of sales
compared with 3.5% of sales in the prior year.
Geographically, all regions experienced flat to lower sales for the
quarter. Operating profits excluding restructuring related
transition costs were $50 million in the U.S., $12 million in
Europe and $7 million in Other Areas.
Mr. Ayers commented on the outlook for the remainder of the year,
"We are encouraged by strengthening North American business
conditions towards the end of the quarter and are optimistic that
future comparisons will prove to be easier. The first quarter
comparisons should, in fact, be the most difficult for the year.
We are on schedule with our restructuring initiatives and have
begun seeing earnings improvements as a result. Although no
additional significant restructuring initiatives were announced in
the first quarter, we have a number of important projects in the
planning stages and we remain focused and have made good progress
on evaluating our product categories and working toward the
aggressive targets set for cost and asset reduction. As a result
of these efforts we continue to build value for our shareholders."
Contact: Richard Huck
Vice President, Finance and
Chief Financial Officer
(203) 827-3803
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited, Millions of Dollars Except per Share Data)
First Quarter
1996 1995
-------- --------
NET SALES $ 635.3 $ 643.3
COSTS AND EXPENSES
Cost of sales 429.3 437.6
Selling, general and administrative 149.0 147.3
Interest - net 6.5 7.5
Other - net 3.5 4.6
-------- --------
588.3 597.0
-------- --------
EARNINGS BEFORE INCOME TAXES 47.0 46.3
Income Taxes 17.4 17.6
-------- --------
NET EARNINGS $ 29.6 $ 28.7
======== ========
NET EARNINGS PER SHARE OF COMMON STOCK $ 0.67 $ 0.65
======== ========
DIVIDENDS PER SHARE $ 0.36 $ 0.35
======== ========
AVERAGE SHARES OUTSTANDING (in thousands) 44,408 44,414
======== ========
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THE STANLEY WORKS AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited, Millions of Dollars)
March 30, April 1,
1996 1995
---------- ----------
ASSETS
Cash and cash equivalents $ 39.3 $ 40.5
Accounts receivable 454.9 428.7
Inventories 335.2 406.6
Other current assets 45.8 38.2
---------- ----------
Total current assets 875.2 914.0
---------- ----------
Property, plant and equipment 526.7 559.9
Goodwill and other intangibles 129.4 163.5
Other assets 97.1 91.0
---------- ----------
$ 1,628.4 $ 1,728.4
========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Short-term borrowings $ 66.2 $ 124.4
Accounts payable 84.2 106.2
Accrued expenses 198.0 194.1
---------- ----------
Total current liabilities 348.4 424.7
---------- ----------
Long-term debt 384.0 406.2
Other long-term liabilities 152.7 147.6
Shareholders' equity 743.3 749.9
---------- ----------
$ 1,628.4 $ 1,728.4
========== ==========
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THE STANLEY WORKS AND SUBSIDIARIES
BUSINESS SEGMENT INFORMATION
(Unaudited, Millions of Dollars)
First Quarter
-------------------------------------------
Unit ACQ/
1996 Price Volume DVT Currency 1995
-------- ------ ------ ------ ------ --------
INDUSTRY SEGMENTS
NET SALES
Tools
Consumer $ 172.7 2% (2)% - - $ 173.5
Industrial 140.4 2% (4)% - - 143.8
Engineered 164.0 - 1 % (3)% - 166.5
------- -------
Total Tools 477.1 1% (1)% (1)% - 483.8
Hardware 83.2 2% (4)% - - 84.7
Specialty Hardware 75.0 - (2)% 2 % - 74.8
------- -------
Consolidated $ 635.3 1% (1)% (1)% - $ 643.3
======= =======
OPERATING PROFIT
Tools $ 51.9 $ 53.0
Hardware 9.6 8.5
Specialty Hardware 2.3 2.6
-------- --------
Total 63.8 64.1
Net corporate
expenses (9.2) (8.9)
Interest expense (7.6) (8.9)
-------- --------
Earnings before
income taxes $ 47.0 $ 46.3
======== ========
GEOGRAPHIC AREAS
NET SALES
United States $ 449.5 1% (1)% (1)% - $ 454.6
Europe 108.1 2% (3)% 1 % - 107.8
Other Areas 77.7 1% (4)% - (1)% 80.9
------- -------
Consolidated $ 635.3 1% (1)% (1)% - $ 643.3
======= =======
OPERATING PROFIT
United States $ 45.4 $ 46.7
Europe 11.6 12.4
Other Areas 6.8 5.0
------- -------
Total $ 63.8 $ 64.1
======= =======
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Exhibit (20)(ii)
FOR IMMEDIATE RELEASE April 17, 1996
STANLEY CEO ANNOUNCES RETIREMENT PLANS
New Britain, Connecticut (NYSE:SWK)...At the Annual Meeting of
The Stanley Works, Richard H. Ayers, Chairman and Chief Executive
Officer, announced his intention to retire from the company when
he reaches age 55, which is next year.
Mr. Ayers mentioned the "significant personal sacrifices" over a
nearly 15-year period of time in key leadership roles at Stanley
and his interest in getting to postponed projects as reasons for
retiring. He also commented, "Next year, I will have been CEO
for 10 years. That's a long time by today's standards. The
position takes its toll. In my view, it is healthy for me to
leave after having devoted myself to our Company and it is
healthy for the Company to gain from the energy and perspectives
of a new CEO.
Anticipating that people might draw incorrect conclusions from
his announcement, Mr. Ayers remarked that "my health is good and
my family members are in good health. The Board and I are very
pleased with the progress Stanley is making to be positioned for
a successful future and the Board has been actively involved in
the Company's planning and has enthusiastically endorsed our key
strategies and initiatives."
The Board of Directors and Mr. Ayers have been considering the
alternatives to accomplish an effective leadership succession in
light of his decision. The Company has exciting plans to achieve
a bright future and capable managers to execute those plans.
However, a number of key managers, including Alan Hunter, Chief
Operating Officer, have been in their positions a relatively
short time and they all have major assignments associated with
the Company's repositioning efforts.
Because of the need for stability in these critical tasks and
further seasoning of the team, the Board will begin an outside
search to find a successor for Mr. Ayers. Still Brown has been
selected to chair the Board committee that will carry out a very
thorough process to find an experienced executive with the skills
to complement Stanley's growth plans.
Mr. Ayers stated, I will be working closely with the Directors
on this most important activity and I ll also continue to
implement the strategies and plans begun last year. My personal
objective and commitment is to see us maintain our momentum for
change and to achieve very strong core results. I want this
leadership change to be seamless to our plans, performance and
market value.
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The Company will keep everyone informed about continuing progress
against its plans and leadership succession. Mr. Ayers concluded
by saying, All of my energy will be devoted to make this
leadership change successful for our Company.
Contact: Richard Huck
Vice President, Finance & CFO
203-827-3803
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Exhibit (20)(iii)
FOR IMMEDIATE RELEASE April 17, 1996
THE STANLEY WORKS' BOARD OF DIRECTORS VOTES A 2-FOR-1 STOCK
SPLIT
New Britain, Connecticut (NYSE:SWK)...The Board of Directors of
The Stanley Works today voted a 2-for-1 stock split in the form
of a stock distribution. Mr. Richard H. Ayers, Chairman and
Chief Executive Officer commented, "We are excited about the
future prospects for improved performance for our company and the
value it will create for our shareholders. That value is
evidenced by some current analyst estimates which suggest further
advancement in the price of our stock. This stock split is
expected to enhance trading activity and broaden ownership and
interest in Stanley stock."
The stock distribution will be June 3, 1996 to shareholders of
record as of May 13, 1996.
The Stanley Works is a worldwide producer of tools, hardware and
specialty hardware for home improvement, consumer, industrial and
professional use.
Contact: Richard Huck
Vice President, Finance and CFO
Telephone: 203-827-3803
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