NEW BRITAIN, Conn., Oct. 14 /PRNewswire-FirstCall/ -- The Stanley Works
(NYSE: SWK) announced today that third quarter 2005 sales from continuing
operations increased in excess of 12% over 2004 and, aside from the impact of
acquisitions, organic sales growth approximated 7%. These results surpassed
previous company estimates of 8-10% total sales growth and 4-6% organic sales
growth.
The favorable organic sales volume was largely the result of strong demand
from home center and mass merchant customers in the Americas and improved
sales performance in the company's Security Solutions business. In addition,
the company noted that operating margins are expected to approximate 15% with
strength in its Consumer Products and Security Solutions segments, each of
which are anticipated to be in the 17-19% range.
As a result, the company expects earnings per fully diluted share to
approximate 88-90 cents in the third quarter, considerably higher than the
prior estimate of 78-80 cents provided on July 26, 2005.
The company previously indicated that full year 2005 earnings were
expected to be approximately $3.20-$3.30 per fully diluted share from
continuing operations. Considering the higher than expected third quarter
estimate, the company anticipates that its full year earnings estimate will
increase by approximately one half of the third quarter out-performance.
Third quarter and full-year guidance above are from continuing operations
and include the impact of two income tax-related items, namely the benefits of
an audit settlement and a charge associated with the anticipated repatriation
of approximately $250 million of cash in connection with the American Jobs
Creation Act. These items are expected to be recorded in the third quarter and
their net earnings benefit per fully-diluted share is expected to approximate
2 cents.
The company plans to provide specific fourth quarter and updated full year
guidance on October 26, the date of its analyst conference in New York.
The Stanley Works, an S&P 500 company, is a worldwide supplier of tools,
hardware and security systems for professional, industrial and consumer use.
More information about The Stanley Works can be found, including corporate
press releases, in the Investor Relations section of the company's corporate
web site at http://www.stanleyworks.com.
CAUTIONARY STATEMENTS
Under the Private Securities Litigation Reform Act of 1995
Statements in the company's press release including but not limited to
those regarding the company's ability to: (i) report operating margins for the
company of approximately 15% and, in its Consumer Products and Security
Solutions businesses, in the 17-19% range; (ii) report earnings per fully
diluted share of approximately 88-90 cents in the third quarter; (iii) record
in the third quarter both an income tax settlement and a tax charge upon the
repatriation of approximately $250 million of cash from foreign countries to
the United States, with a net earnings benefit approximating 2 cents per fully
diluted share; and (iv) achieve full year earnings above the previous estimate
of $3.20 to $3.30 per fully diluted share are "forward looking statements".
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.
The company's ability to deliver the results is dependent upon: (i) final
accounting and audit of the company's third quarter results; (ii) the success
of the company's efforts to raise prices in order to, among other things,
offset the impact of steel and other commodity and material price inflation;
(iii) the need to respond to significant changes in product demand due to
economic and other changes; (iv) continued improvements in productivity and
cost reductions; (v) the final geographic distribution of future earnings;
(vi) the identification of overhead cost reduction opportunities and effective
execution of the same; (vii) the company's favorable settlement of routine tax
audits; (viii) the company's ability to successfully limit the costs incurred
in order to repatriate certain cash pursuant to the American Jobs Creation Act
of 2004; and (ix) 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, including
the company's ability to recruit and retain an adequate sales force; (ii) the
continued success of The Home Depot, Lowe's and Wal-Mart sales initiatives as
well as other programs to stimulate demand for company products; (iii) the
success of recruiting programs and other efforts to maintain or expand overall
Mac Tools truck count versus prior years; (iv) the ability of the sales force
to adapt to changes made in the sales organization and achieve adequate
customer coverage; (v) the ability of the company to fulfill increasing demand
for its products; (vi) the ability to continue successfully managing and
defending claims and litigation; and (vii) the absence or mitigation of
increased pricing pressures from customers and competitors and the ability to
defend market share in the face of price competition.
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 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
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Related links:
http://www.StanleyWorks.com
Company News On-Call:
http://www.prnewswire.com/comp/874363.html
CONTACT:
Gerry Gould, Vice President - Investor
Relations of The Stanley Works, +1-860-827-3833,
gould@stanleyworks.com
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