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STANLEY SALES AND EARNINGS IMPROVE IN FIRST QUARTER

 NEW BRITAIN, Conn., April 21 /PRNewswire/ -- "Net sales for the first quarter were up 11 percent from last year, largely on internal growth of existing businesses," Richard H. Ayers, chairman and chief executive officer of The Stanley Works (NYSE: SWK), said today, "and net earnings were up 31 percent for the quarter."
 Net sales for the first quarter were $553 million, up 11 percent from the same quarter last year. Growth from existing businesses was up 8 percent for the quarter. The effect of 1992 acquisitions added 5 percent to the sales increase; however, the 3 percent decline in sales resulting from the currency effects of a stronger dollar more than offset a small price increase.
 Net earnings for the quarter were $23 million, up 31 percent compared with the first quarter 1992. Earnings per share for the period were $.51, up 34 percent from the $.38 reported for the quarter last year.
 Gross margins for the quarter were 32.3 percent, compared with 33.3 percent a year ago, while operating expenses were 23.5 percent of sales, a 2.0 percent improvement from the first quarter last year. Operating efficiencies and the absence of litigation costs incurred in the prior year resulted in the improved comparisons.
 Interest-net expenses for the first quarter were 1.3 percent compared with 1.2 percent a year ago. Other-net expenses for the period were lower than reported for the quarter a year ago and included a pretax gain of $24 million ($.33 per share) from the sale of a non- operating asset. Also included in Other-net were pretax charges of $22.7 million ($.31 per share) for contingency reserves.
 Net sales in the United States were up 18 percent for the quarter as internal growth of 11 percent was supplemented by the 7 percent increment from acquisitions made during 1992. Mr. Ayers noted: "March activity was weaker than in January and February, especially in the consumer retail channels. Whether or not the severe weather in March was responsible for the reduced sales at quarter-end will become more evident during the upcoming weeks."
 In the first quarter, European businesses exhibited no real growth for the quarter. Net sales were down 7 percent as a result of the currency effects of a strong dollar.
 Net sales in Other Areas were virtually unchanged for the quarter as positive internal growth and price increases were offset by the negative effects of currency.
 Tools sales increased 12 percent for the quarter as internal growth and consumer tools acquisitions in the United States each contributed 7 percent to the increase. However, the negative effects of currency more than offset the small price increase. Industrial and Engineered tool categories both grew in the United States. Continued expansion in Latin America and the Pacific Rim also added to growth. Operating profits for tools in the quarter were $38 million, up 5 percent over the prior year period. Operating profits included approximately $4 million of restructuring charges. Operating margins were 9.1 percent (10.0 percent without the one-time charges) compared with 9.8 percent in the first quarter last year.
 Hardware sales increased 5 percent in the first quarter as internal growth of 7 percent was partially offset by the negative effects of currency. Operating profits were $11 million for the quarter, up more than 50 percent as acquisition-related integration costs incurred last year were completed. Operating margins improved to 13.6 percent from 9.3 percent in the first quarter a year ago.
 Specialty Hardware sales increased 15 percent in the first quarter over a year ago. The gain was generated through internal growth in the United States. Operating margins and profits are normally low for these businesses in the first quarter, but material cost increases and manufacturing process problems caused further weakness.
 Mr. Ayers said: "Robert G. Widham, group vice president, retired for health reasons during the quarter. Bob had broad responsibilities for Stanley businesses throughout the world during his 36 years of service. He will be greatly missed by his friends and associates."
 Mr. Ayers concluded: "We don't expect any growth in our European markets over the near term as these economies remain in a recessionary mode. In the U.S., construction and building related product lines should show continued improvement reflecting the current interest rate environment and the relative affordability of housing. Industrial categories will probably remain erratic until factory activity and related employment levels achieve a measure of continuing growth. The weakness in retail channels in March, probably weather related, has caused us to remain cautious in regard to projected consumer buying activity. We remain positive but cautious in our outlook for business activity related to Stanley."
 THE STANLEY WORKS AND SUBSIDIARIES
 Consolidated Statements of Earnings
 (Millions of dollars)
 First Quarter
 1993 1992
 Net sales $ 553.4 $ 497.1
 Costs and expenses
 Cost of sales 374.7 331.6
 Selling, general and administrative 130.1 126.8
 Interest - net 7.3 5.9
 Other - net 3.8 5.0
 Total 515.9 469.3
 Earnings before income taxes 37.5 27.8
 Income taxes 14.5 10.3
 Net earnings $ 23.0 $ 17.5
 Net earnings per share of common stock $ .51 $ .38
 Dividends per share $ .33 $ .31
 Average shares outstanding (in thousands) 45,274 45,782
 See notes to consolidated financial statements.
 THE STANLEY WORKS AND SUBSIDIARIES
 Consolidated Balance Sheets
 (Millions of dollars)
 4/3/93 3/28/92
 ASSETS
 Cash and cash equivalents $ 77.9 $ 43.0
 Accounts receivable 388.8 364.7
 Inventories 321.7 307.9
 Other current assets 35.7 30.0
 Total current assets 824.1 745.6
 Property, plant and equipment - net 561.5 562.7
 Goodwill, patents and other intangibles 173.5 132.8
 Long-term notes receivable and other assets 75.8 87.4
 Total $1,634.9 $1,528.5
 LIABILITIES AND SHAREHOLDERS' EQUITY
 Notes payable $ 118.4 $ 16.0
 Accounts payable and accrued expenses 312.6 279.5
 Accrued income taxes 8.6 9.9
 Total current liabilities 439.6 305.4
 Long-term debt 369.0 381.8
 Other long-term liabilities 144.8 142.2
 Shareholders' equity 681.5 699.1
 Total $1,634.9 $1,528.5
 See notes to consolidated financial statements.
 THE STANLEY WORKS AND SUBSIDIARIES
 Consolidated Statements of Cash Flows
 (Millions of dollars)
 First Quarter
 1993 1992
 Operating Activities:
 Net earnings $ 23.0 $ 17.5
 Depreciation and amortization 22.1 19.2
 Net gain on sale of non-operating asset (24.0) --
 Other non-cash items 10.0 1.9
 Changes in operating assets and liabilities (35.5) (2.6)
 Net cash provided (used) by operating activities (4.4) 36.0
 Investing Activities:
 Capital expenditures (14.5) (13.8)
 Proceeds from sales of assets 1.1 0.7
 Proceeds from sale of non-operating asset 32.9 --
 Business acquisitions (0.9) (17.0)
 Other 0.9 (1.3)
 Net cash provided (used) by investing activities 19.5 (31.4)
 Financing Activities:
 Payments on long-term debt (1.3) (2.2)
 Proceeds from long-term borrowings 0.1 --
 Net short-term bank financing 24.8 (3.0)
 Proceeds from issuance of common stock 0.4 0.2
 Purchase of common stock for treasury (26.5) --
 Cash dividends on common stock (15.0) (14.0)
 Net cash used by financing activities (17.5) (19.0)
 Effect of exchange rate changes on cash (0.8) (0.9)
 Decrease in cash and cash equivalents (3.2) (15.3)
 Cash and cash equivalents, beginning of period 81.1 58.3
 Cash and cash equivalents, end of first quarter $ 77.9 $ 43.0
 See notes to consolidated financial statements.
 THE STANLEY WORKS AND SUBSIDIARIES
 Consolidated Statements of Changes in Shareholders' Equity
 (Millions of dollars)
 Three Months
 1993 1992
 Balance at beginning of year $ 696.3 $ 698.3
 Net earnings 23.0 17.5
 Currency translation adjustment 0.1 (5.1)
 Cash dividends declared (15.0) (14.2)
 Net issuance of common stock (24.9) 1.4
 ESOP debt 2.0 1.2
 Balance at end of first quarter $ 681.5 $ 699.1
 See notes to consolidated financial statements.
 THE STANLEY WORKS AND SUBSIDIARIES
 Business Segment Information
 (Millions of dollars)
 First Quarter
 1993 1992
 INDUSTRY SEGMENTS
 Net Sales
 Tools
 Consumer $ 171.8 $ 153.4
 Industrial 102.3 94.1
 Engineered 141.8 123.2
 Total Tools 415.9 370.7
 Hardware 78.9 75.4
 Specialty Hardware 58.6 51.0
 Consolidated $ 553.4 $ 497.1
 Operating Profit
 Tools $ 37.9 $ 36.2
 Hardware 10.7 7.0
 Specialty Hardware 0.7 1.5
 Total 49.3 44.7
 Net corporate expenses (3.5) (9.2)
 Interest expense (8.3) (7.7)
 Earnings before income taxes $ 37.5 $ 27.8
 GEOGRAPHIC AREAS
 Net Sales
 United States $ 404.9 $ 343.3
 Europe 83.2 89.1
 Other Areas 65.3 64.7
 Consolidated $ 553.4 $ 497.1
 Operating Profit
 United States $ 35.3 $ 29.7
 Europe 8.6 9.4
 Other Areas 5.4 5.6
 Total $ 49.3 $ 44.7
 See notes to consolidated financial statements.
 THE STANLEY WORKS AND SUBSIDIARIES
 Notes to Consolidated Financial Statements
 In the consolidated statement of earnings for the first quarter of 1993, Other-net includes a gain of $24.0 million ($.33 per share) from the sale of a portion of the company's investment in Max Co., Ltd. Also included in Other-net were additional charges for a fine levied by U.S. District Court in Missouri for $7.0 million ($.10 per share) and contingency reserves of $15.7 million ($.21 per share) related to product liability litigation, restructuring activities and environmental clean-up.
 Certain 1992 amounts in the consolidated statements of earnings were reclassified to conform to the 1993 presentation.
 -0- 4/21/93
 /CONTACT: Ronald F. Gilrain, vice president - public affairs of The Stanley Works, 203-827-3882/
 (SWK)


CO: The Stanley Works ST: Connecticut IN: SU: ERN

GK -- NY015 -- 8494 04/21/93 08:43 EDT
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Date:Apr 21, 1993
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