NEW BRITAIN, Conn., Dec. 7 /PRNewswire-FirstCall/ -- The Stanley Works
(NYSE: SWK) announced today that its offer to purchase Facom Tools from
Fimalac, S.A. for euro 410 million (approximately $481 million) in cash has
been presented to Facom's labor representatives for their opinions and such
opinions have been rendered in accordance with French law. Further, all
required antitrust reviews in Europe have been completed and related approvals
secured.
Fimalac has accepted Stanley's offer, and Stanley and Fimalac have entered
into a definitive purchase and sale agreement. The transaction is scheduled to
close on January 1, 2006. As previously announced, the Facom acquisition is
expected to be accretive to fully-diluted earnings by 10 cents per share in
2006.
(Note: Currency conversion is based on the December 7, 2005 mid-day rate
of 1.1722, as published by The Federal Reserve Bank of New York.)
Separately, the company announced that it completed the acquisition of
National Manufacturing Co. d/b/a National Hardware for $170 million cash on
November 30, 2005, a month earlier than previously anticipated. As a result,
National Hardware's financial results for the month of December will be
included in Stanley's fourth quarter 2005 consolidated results of operations.
It is anticipated that this will cause 2-3 cents per fully diluted share of
earnings dilution -- primarily associated with acquired inventory step-up
charges -- in the fourth quarter of 2005 and a corresponding increase in the
previously announced accretion related to National Hardware expected in 2006,
which is now expected to be 3-4 cents per fully diluted share.
The company also announced its decision to discontinue the operations of
its small appliance hinge business and to divest its U.K. paint decorator tool
business, both in the first half of 2006. These non-strategic businesses have
combined annual sales approximating $40 million, 1% of the company's total
annual sales. As a result, a charge to income primarily reflecting related
asset impairments in the appliance hinge business, of approximately 3 cents
per fully-diluted share will be included in continuing operations in the
fourth quarter of 2005. The operating profits of these businesses were
negligible in 2005 and, as a consequence, their discontinuation and planned
sale will have no meaningful impact on 2006 operating profitability.
As a result of these events, the company's fourth quarter and full year
2005 earnings guidance are reduced by the aforementioned 2-3 cents per
fully-diluted share related to the timing of the National Hardware and by 3
cents related primarily to the appliance hinge business discontinuation. The
company's previous 2006 earnings guidance is increased by the aforementioned
2-3 cents per fully diluted share related to the timing of the National
Hardware acquisition.
John F. Lundgren, Chairman & Chief Executive Officer, commented: "The
Facom Tools and National Hardware acquisitions are important steps toward
strengthening our core Tools and Hardware franchises. We continue to be
committed to maintaining a sharp focus on eliminating business activities
which cannot meet our long-term growth and profitability expectations. The
planned discontinuations of our small appliance hinge and U.K. paint decorator
tools businesses are indicative of this commitment. Our ongoing portfolio
transition has begun to provide considerable benefit. We plan to continue
pursuing the shift in 2006 and beyond, with the goal of becoming a higher
growth, diversified industrial company."
The Stanley Works, an S&P 500 company, is a worldwide supplier of consumer
products, industrial tools and security solutions for professional, industrial
and consumer use. More information about The Stanley Works, including
corporate press releases, can be found at http://www.stanleyworks.com.
CAUTIONARY STATEMENT
Under the Private Securities Litigation Reform Act of 1995
Statements in this press release, including those regarding (i) the
scheduled closing of the Facom Tools transaction and the expectation that the
Facom transaction will be accretive to fully diluted earnings by 10 cents per
share in 2006; (ii) the expectation that the National Hardware acquisition
will cause 2-3 cents per fully diluted share of earnings dilution in the
fourth quarter and contribute 3-4 cents per fully diluted share in earnings
accretion during 2006; (iii) the company's decision to discontinue its small
appliance hinge business and to divest its European paint decorator tool
businesses in the first half of 2006, its ability to limit the fourth quarter
2005 charge associated with these actions to approximately 3 cents per diluted
share and its ability avoid any meaningful impact on 2006 operating
profitability as a result of these planned actions (the "Results"), are
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are based on
current expectations and involve 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 close the Facom Tools transaction on January 1,
2006 and to deliver the Results is dependent upon, among other things, (i)
satisfaction of the remaining conditions to closing the Facom transaction;
(ii) the ability of the company to achieve the synergies anticipated as a
result of the proposed acquisitions and limit acquisition-related costs and
expenses within expected ranges; (iii) the ability of the company to minimize
costs associated with the discontinuation of its small appliance hinge
business; (iv) the ability of the company to divest its European paint
decorator tool business in the first quarter of 2006 and minimize associated
costs; (v) the success of the company's efforts to maintain prices in order
to, among other things, offset the impact of steel and other commodity price
inflation; (vi) continued improvements in productivity and cost reductions;
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 including 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
installation, distribution and sales networks such as weather conditions, 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, V. P. - Investor Relations of
The Stanley Works, +1-860-827-3833, ggould@stanleyworks.com
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