NEW BRITAIN, Conn., Jan. 7 /PRNewswire-FirstCall/ -- The Stanley Works
(NYSE: SWK) updated fourth quarter 2007 earnings and cash flow guidance and
introduced its outlook for full year 2008, as summarized in the following
paragraphs:
Fourth Quarter and Full Year 2007 Update
The company expects the following with respect to 4Q07 results,
updating previous guidance issued October 24, 2007:
-- Total sales growth will be approximately 14% for the quarter. Organic
sales growth (ex-currency) will be approximately 2% for the quarter,
consistent with the company's previous indication.
-- EPS will be approximately $1.06-$1.11 per fully-diluted share versus
the originally communicated range of $1.10-$1.15. This revised
estimate includes previously unanticipated charges totaling $0.04 for
resolution of legal matters during the quarter, the largest of which is
an unfavorable Bostitch-related litigation judgment.
With regard to full year 2007 results, the company expects that:
-- EPS from continuing operations will be approximately $3.95-$4.00 per
fully-diluted share, an increase of nearly 14-16% over 2006.
-- Free cash flow will likely exceed $450 million, surpassing the
previously communicated range of $400-$450 million, due in part to
management taking actions during the quarter to reduce working capital.
Such initiatives succeeded in reducing net inventories by approximately
$60 million versus September levels.
Full Year 2008 Outlook
The Stanley Works introduced 2008 EPS guidance of $4.20-$4.40 per
fully- diluted share, up 5-11% from its full year 2007 outlook. The company
expects organic sales growth (ex. currency) of flat to 1%, with its
Construction and DIY segment modestly negative, its Industrial segment
modestly positive and its Security segment up 2-3%. (Organic growth is
expected to be supplemented to an extent by acquisitions.) This 2008
revenue outlook reflects management's expectation of a subdued economic
environment, including a possible mild and short-lived U.S. recession, as
well as continued deterioration of North American markets associated with
homebuilding and remodeling (about 25% of consolidated revenues).
Management also indicated that free cash flow is expected to exceed $500
million in 2008.
John F. Lundgren, Chairman and Chief Executive Officer, stated: "We
have been working diligently for the past five years to diversify our
revenue base and transform our portfolio into a more attractive mix of
businesses that is less dependent on North American residential
construction markets. The achievement of solid 2007 revenue, EPS and cash
performances in the face of difficult market conditions, as well as our
favorable cash flow and earnings expectations for 2008, are direct results
of those efforts."
The company also announced it will release earnings the morning of
Monday, January 28, 2008, and a conference call will follow at 10am.
Details regarding the call will be provided in a separate press release.
Free cash flow is defined as cash flow from operations less capital and
capitalized software expenditures. Free cash flow does not reflect, among
other things, deductions for mandatory debt service, other borrowing
activity, discretionary dividends on the company's common stock and
acquisitions. Organic sales growth is defined as total sales growth less
sales of companies acquired in the past twelve months and less foreign
currency impacts. The Company believes these are important measures of its
liquidity, of its ability to fund future growth and to provide a return to
the shareowners, and of its sales performance.
The Stanley Works, an S&P 500 company, is a diversified worldwide
supplier of tools and engineered solutions for professional, industrial,
construction and do-it-yourself use, and security solutions for commercial
applications. More information about The Stanley Works can be found at
http://www.stanleyworks.com.
The Stanley Works corporate press releases are available on the
company's Internet web site at http://www.stanleyworks.com.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995 Statements in this press release, including but not limited to those
regarding the Company's ability to: (i) deliver total sales growth of
approximately 14% for the fourth quarter; (ii) deliver organic sales growth
(excluding currency effects) of approximately 2% for the fourth quarter;
(iii) deliver fourth quarter earnings of approximately $1.06 - $1.11 per
fully diluted share; (iv) deliver 2007 earnings of approximately $3.95 per
fully diluted share; (v) deliver free cash flow in excess of $450 million
in 2007; (vi) deliver 2008 earnings of $4.20 - $4.40 per fully diluted
share; (vii) deliver free cash flow to exceed $500 million in 2008; (viii)
deliver organic sales growth (excluding currency) of flat to 1% in 2008 are
"forward looking statements" and subject to risk and uncertainty.
The Company's ability to deliver the 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. In addition to the
risks, uncertainties and other factors discussed in this press release, the
risks, uncertainties and other factors that could cause or contribute to
actual results differing materially from those expressed or implied in the
forward looking statements include, without limitation, those set forth
under Item 1A Risk Factors of the Company's Annual Report on Form 10-K and
any material changes thereto set forth in any subsequent Quarterly Reports
on Form 10-Q, those contained in the Company's other filings with the
Securities and Exchange Commission, and those set forth below.
The Company's ability to deliver the Results is dependent upon: (i) the
Company's ability to successfully integrate HSM and other recent
acquisitions, as well as future acquisitions, while limiting associated
costs; (ii) the Company's ability to continue to deliver cost reductions
and profit improvement in its Fastening Systems business; (iii) the
Company's ability to minimize the costs to relocate equipment and
inventory; (iv) the Company's ability to complete the Fastening
reorganization within the anticipated time frame; (v) the success of the
Company's efforts to expand its tools and security businesses; (vi) the
Company's success at new product development and introduction and
identifying and developing new markets; (vii) the success of the Company's
efforts to manage freight costs, steel and other commodity costs; (viii)
the success of the Company's efforts to sustain or increase prices in order
to, among other things, offset or mitigate the impact of steel, freight,
energy, non-ferrous commodity and other commodity costs and other inflation
increases; (ix) the Company's ability to reduce its costs, increase its
prices, change the manufacturing location or find alternate sources for
products made in China in order to mitigate the impact of an increase in
the VAT rate applicable to products the Company makes or purchases in
China; (x) the Company's ability to generate free cash flow and maintain a
strong debt to capital ratio; (xi) the Company's ability to identify and
effectively execute productivity improvements and cost reductions while
minimizing any associated restructuring charges; (xii) the Company's
ability to obtain favorable settlement of routine tax audits; (xiii) the
ability of the Company to generate earnings sufficient to realize future
income tax benefits during periods when temporary differences become
deductible; (xiv) the continued ability of the Company to access credit
markets under satisfactory terms; and (xv) the Company's ability to
negotiate satisfactory payment terms under which the Company buys and sells
goods, materials and products.
The Company's ability to deliver the Results is also dependent upon:
(i) the continued success of the Company's marketing and sales efforts;
(ii) the success of recruiting programs and other efforts to maintain or
expand overall Mac Tools truck count versus prior years; (iii) the ability
of the Company to maintain or improve production rates in the Company's
manufacturing facilities, respond to significant changes in product demand
and fulfill demand for new and existing products; (iv) the ability to
continue successfully managing and defending claims and litigation; (v) the
Company's ability to continue improvements in working capital; (vi) the
success of the Company's efforts to mitigate any cost increases generated
by, for example, continued increases in the cost of energy or significant
Chinese Renminbi or other currency appreciation; and (vii) the geographic
distribution of the Company's earnings.
The Company's ability to achieve the Results will also be affected by
external factors. These external factors include: pricing pressure and
other changes within competitive markets; the continued consolidation of
customers particularly 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 impact of events that cause or
may cause disruption in the Company's manufacturing, distribution and sales
networks such as war, terrorist activities, political unrest and
recessionary or expansive trends in the economies of the world in which the
Company operates.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements to reflect events or circumstances that may
arise after the date hereof.
SOURCE The Stanley Works
 back to top
Related links:
http://www.stanleyworks.com
http://www.prnewswire.com/comp/874363.html /
CONTACT:
Gerry Gould, V. P. - Investor Relations of
The Stanley Works, +1-860-827-3833, ggould@stanleyworks.com
|
