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 22, 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 6 Pages Exhibit Index is located on Page 4 Item 5. Other Events. 1. On July 22, 1998, the Registrant supplemented its second quarter earnings release, which was issued on July 15, 1998 as follows: Core segment profit margin for the second quarter was 14.8% versus 14.7% in 1997. The Tools segment delivered significant operating profit improvement, rising to 16.4% from 16.0% last year despite continuation of a competitive pricing environment for fastening systems. Hardware segment operating profit decreased to 10.0% from 14.2% last year, reflecting both mix and lower than expected volumes in the Home Decor business. In the beginning of the quarter Home Decor's largest customers initiated corrections to their inventory levels, however, the necessary reductions in factory spending lagged the lower level of sales. Specialty Hardware operating profit improved to 8.2% from 5.6% in 1997 due primarily to increased volumes, productivity gains and lower wood prices in the U.S. entry door business. Operating profit margins in the U.S. dipped slightly to 15.8% from an unusually strong 16.1% in the prior year quarter. European profitability declined to 11.1% of sales from 13.6% in 1997. The quarter reflected slowing in the company's European markets and continued pricing pressures in the fastening systems business. In Other Areas operating margins improved to 13.1% primarily due to the additional profitability of our Latin American business. The table, "Business Segment Information" attached hereto as Exhibit 20(i), provides clarification of reported results for the second quarters and first six months of 1998 and 1997, reconciling them with normalized core results. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) 20(i) Business Segment Information for the second quarters and first six months of 1998 and 1997. Page 2 of 6 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 22, 1998 By: Stephen S. Weddle Name: Stephen S. Weddle Title: Vice President General Counsel and Secretary Page 3 of 6 Pages EXHIBIT INDEX Current Report on Form 8-K Dated July 22, 1998 Exhibit No. Page 20(i) 5 Page 4 of 6 Pages Exhibit (20) (i) THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) OPERATING PROFIT Second Quarter 1998 Related Core Restrg Transition Profit Reported Charges Costs Core Margin INDUSTRY SEGMENTS Tools $ 76.5 $ - $ 11.1 $ 87.6 16.4% Hardware 6.4 - 2.2 8.6 10.0% Specialty Hardware 3.0 - 3.0 6.0 8.2% Total 85.9 - 16.3 102.2 14.8% Net corporate expenses (11.8) - - (11.8) Interest expense (6.6) - - (6.6) Earnings before income taxes $ 67.5 $ - $ 16.3 $ 83.8 GEOGRAPHIC AREAS United States $ 65.1 $ - $ 14.5 $ 79.6 15.8% Europe 11.2 - 1.0 12.2 11.1% Other Areas 9.6 - 0.8 10.4 13.1% Total $ 85.9 $ - $ 16.3 $ 102.2 14.8% Second Quarter 1997 Related Core Restrg Transition Profit Reported Charges Costs* Core Margin INDUSTRY SEGMENTS Tools $ (38.3) $ 110.7 $ 10.4 $ 82.8 16.0% Hardware 2.6 7.5 2.1 12.2 14.2% Specialty Hardware (9.8) 13.7 - 3.9 5.6% Total (45.5) 131.9 12.5 98.9 14.7% Net corporate expenses (29.6) 5.3 11.0 (13.3) Interest expense (6.4) - - (6.4) Earnings (loss) before income taxes $ (81.5) $ 137.2 $ 23.5 $ 79.2 GEOGRAPHIC AREAS United States $ (19.1) $ 87.6 $ 8.5 $ 77.0 16.1% Europe (12.0) 24.1 2.4 14.5 13.6% Other Areas (14.4) 20.2 1.6 7.4 8.4% Total $ (45.5) $ 131.9 $ 12.5 $ 98.9 14.7% * Includes stock option charge. Page 5 of 6 Pages THE STANLEY WORKS AND SUBSIDIARIES BUSINESS SEGMENT INFORMATION (Unaudited, Millions of Dollars) OPERATING PROFIT Year to Date 1998 Related Core Restrg Transition Profit Reported Chgs Costs Core Margin INDUSTRY SEGMENTS Tools $ 139.4 $ - $ 23.1 $ 162.5 15.5% Hardware 20.1 - 4.3 24.4 13.4% Specialty Hardware 2.9 - 5.2 8.1 6.0% Total 162.4 - 32.6 195.0 14.3% Net corporate expenses (23.3) - - (23.3) Interest expense (13.4) - - (13.4) Earnings(loss)before income taxes $ 125.7 $ - $ 32.6 $ 158.3 GEOGRAPHIC AREAS United States $ 120.3 $ - $ 28.8 $ 149.1 15.2% Europe 24.6 - 2.3 26.9 11.7% Other Areas 17.5 - 1.5 19.0 12.2% Total $ 162.4 $ - $ 32.6 $ 195.0 14.3% Year to Date 1997 Related Core Restrg Transition Profit Reported Chgs Costs* Core Margin INDUSTRY SEGMENTS Tools $ 17.7 $ 111.8 $ 18.0 $ 147.5 14.8% Hardware 14.4 7.9 4.0 26.3 14.7% Specialty Hardware (7.5) 14.3 0.2 7.0 4.9% Total 24.6 134.0 22.2 180.8 13.7% Net corporate expenses (35.4) (1.4) 11.1 (25.7) Interest expense (12.0) - - (12.0) Earnings (loss) before income taxes $ (22.8) $ 132.6 $ 33.3 $ 143.1 GEOGRAPHIC AREAS United States $ 34.1 $ 88.8 $ 16.1 $ 139.0 14.9% Europe (0.7) 24.5 3.5 27.3 12.8% Other Areas (8.8) 20.7 2.6 14.5 8.5% Total $ 24.6 $ 134.0 $ 22.2 $ 180.8 13.7% * Includes stock option charge Page 6 of 6 Pages