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): February 25, 2002
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The Stanley Works
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(Exact name of registrant as specified in charter)
Connecticut 1-5224 06-0548860
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
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)
Item 7. Financial Statements and Exhibits.
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(c) 20(i) Press Release dated February 25, 2002.
20(ii) Cautionary Statements relating to forward
looking statements included in Exhibit 20(i).
Item 9. Regulation FD Disclosure.
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In a press release attached to this 8-K, the
company announced a strategic alliance with Home
Depot and reiterated earnings guidance for the
first quarter 2002.
SIGNATURE
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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: February 25, 2002 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 February 25, 2002
Exhibit No. Page
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20(i) 5
20(ii) 7
Exhibit 20(i)
FOR IMMEDIATE RELEASE
THE HOME DEPOT & STANLEY WORKS ANNOUNCE STRATEGIC ALLIANCE
The world's largest home improvement retailer selects Stanley
offerings; companies ink major 5-year, 4-category agreement
ATLANTA and NEW BRITAIN, Connecticut, Feb. 25, 2002 ---
The Home Depot (NYSE: HD) and The Stanley Works (NYSE:
SWK) announced the formation of a strategic business
alliance that is expected to expand the world's largest
home improvement retailer's offerings of Stanley
products. The companies have executed a five-year
agreement covering the hand tool, mechanics tool,
pneumatic / fastening and builders' hardware categories.
Key provisions of the agreement are:
Home Depot has named Stanley its principal national
supplier of branded hand tools. The companies indicated
that the anticipated Home Depot hand tool offering will
expand current listings, including Stanley's FatMax and
other professional-oriented tools, helping to address the
needs of both the do-it-yourself and professional
customer.
Stanley will continue as Home Depot's national supplier
of Husky branded mechanics tools and toolboxes covered
under a 1992 license agreement. Stanley will continue to
sell Husky branded mechanics tools and toolboxes to The
Home Depot on an exclusive basis. At the end of the five-
year contract, Stanley will transfer the rights to the
Husky brand to The Home Depot, supporting Home Depot's
cross-branding strategy of proprietary product under the
Husky name.
Home Depot has named Stanley its principal national
supplier of pneumatic fastening tools. Stanley Bostitch
will be carried in all major segments of Home Depot's
pneumatic markets, creating additional opportunity for
increased shelf space and geographic expansion.
Home Depot will use Stanley as its sole national
supplier of builders' hardware, taking Stanley from about
50% of Home Depot stores currently to 100%.
Other terms and conditions of the agreement were not
disclosed. The agreement does not address Stanley's entry
door and mirrored closet door offerings, as separate
arrangements are already in effect.
"We are excited by the potential offered by this partnership. This is
a perfect example of how Home Depot is moving swiftly and decisively to
create new arrangements that broaden our product mix with nationally
recognized brands that are known for quality and competitive price,"
said Robert L. Nardelli, Chairman, President & CEO of The Home Depot.
"This is one of many new alliances we are forging across the product
categories in our stores in our ongoing quest to buy the best products
and deliver the best service and pricing to our loyal customers."
John M. Trani, Stanley chairman and chief executive officer, added:
"This is also a perfect example of how our category management
initiatives open up opportunities with our largest customers. By
analyzing the completeness of customers' product offerings, and working
with our customers to maximize the use of retail space dedicated to
categories we serve, we can make changes that enhance their businesses
and ours." Trani added: "By carrying the optimal assortment of Husky
mechanics tools, Bostitch pneumatics and Stanley hand tools and
hardware across all their regions, in addition to Stanley doors
offered in two-thirds of their stores, The Home Depot will have the
most complete line of consumer and professional branded product
available in the marketplace. This will benefit both companies, and
most of all the many professional tradesmen who are among Home Depot's
customers and Stanley's end users."
The companies indicated that increased presence of Stanley's products
in Home Depot's stores is expected by the summer of 2002.
Separately, Stanley indicated that second half 2002 revenue expectations
(up 2-4%) and related 2002 earnings guidance provided in a February 8
press release and discussed at its February 8 analyst conference (up
18-22% over $2.31 per fully-diluted share in 2001, exclusive of
restructuring and other special charges and credits) anticipated the
successful completion of this alliance announced today. Additionally,
Stanley reiterated its previous first quarter earnings guidance of
$0.55 per share.
The Stanley Works is a worldwide supplier of tools, door systems and
related hardware for professional, industrial and consumer use, with
sales approximating $2.6 billion in 2001. More information about
Stanley can be located on-line at www.stanleyworks.com.
Founded in 1978, The Home Depot today operates 1,348 retail outlets,
including 1,220 Home Depot stores in the United States, 78 Home Depot
stores in Canada, and 4 Home Depot stores in Mexico. The company also
operates 41 EXPO Design Centers, 4 Villager's Hardware stores and one
Home Depot Floor Store outlet. The Home Depot was just named sixth in
Fortune Magazine's list of America's Most Admired Companies for the
second consecutive time. Home Depot was also named most admired
Specialty Retailer for the ninth consecutive time.
Home Depot stock is publicly traded (NYSE:HD) and is included in the Dow
Jones Industrial Average and the Standard & Poor's 500 Index.
Contacts: The Stanley Works:
Gerard J. Gould
Vice President, Investor Relations
860/827-3833
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 (i) the future impact of the strategic
alliance between the company and Home Depot and (ii) the company's
ability to achieve earnings per share of $.55 per fully diluted share
for the first quarter 2002 are forward looking and inherently subject
to risk and uncertainty.
The company's ability to achieve the earnings objectives identified in
the preceding paragraph is dependent on both internal and external
factors, including the success of the company's marketing and sales
efforts, continuing improvements in productivity and cost reductions
and continued reduction of selling, general and administrative expenses
as a percentage of sales, the strength of the United States economy and
the strength of foreign currencies, including, without limitation,
the Euro.
The company's ability to achieve the expected level of revenues is
dependent upon a number of factors, including (i) the ability to
recruit and retain a sales force comprised of employees and
manufacturers representatives, (ii) the success of the Home Depot
program announced in today's press release, the Wal-Mart program
announced in 2001, and other initiatives to increase retail sell
through and stimulate demand for the company's products, (iii) the
ability of the sales force to adapt to changes made in the sales
organization and achieve adequate customer coverage, (iv) the ability
of the company to fulfill demand for its products, (v) the absence of
increased pricing pressures from customers and competitors and the
ability to defend market share in the face of price competition, and
(vi) the acceptance of the company's new products in the marketplace as
well as the ability to satisfy demand for these products.
The company's ability to improve its productivity and to lower the cost
structure is dependent on the success of various initiatives that are
underway or are being developed to improve manufacturing and sales
operations and to implement related control systems, which initiatives
include certain facility closures and related workforce reductions
expected to be completed in 2002. The success of these initiatives is
dependent on the company's ability to increase the efficiency of its
routine business processes, to develop and implement process control
systems, to mitigate the effects of any material cost inflation, to
develop and execute comprehensive plans for facility consolidations, the
availability of vendors to perform outsourced functions, the successful
recruitment and training of new employees, the resolution of any labor
issues related to closing facilities, the need to respond to significant
changes in product demand while any facility consolidation is in process
and other unforeseen events.
The company's ability to continue to reduce selling, general and
administrative expenses as a percentage of sales is dependent on
various process improvement activities, the continued success of
changes to the sales organization and the reduction of transaction
costs.
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, increasing
competition, changes in trade, monetary and fiscal policies and laws,
inflation, currency exchange fluctuations, the impact of dollar/foreign
currency exchange rates on the competitiveness of products, the impact
of the events of September 11, 2001 and recessionary or expansive
trends in the economies of the world in which the company operates.