Filed by
The Stanley Works
Pursuant
to Rule 425 under the Securities Act of 1933
and
deemed filed pursuant to Rule 14a-12
under the
Securities Exchange Act of 1934
Subject
Company: The Black & Decker Corporation
Commission
File No.: 1-01553
FOR
IMMEDIATE RELEASE
STANLEY
UPDATES 2009 FULL YEAR GUIDANCE
Will
Record One Time Charge Of $18.0 Million In Fourth Quarter 2009
Related
To Black & Decker Transaction
No
Change In Operational Outlook
New
Britain, Connecticut, November 5, 2009 … The
Stanley Works (NYSE: SWK) today updated its full year 2009 guidance to reflect
one time costs associated with its proposed merger with The Black & Decker
Corporation (NYSE: BDK), which was announced November 2,
2009.
The Company expects
to record a one time charge in the fourth quarter of 2009 of $18.0 million,
reflecting fees and expenses related to the Black & Decker transaction, the
majority of which are non tax-deductible.
As a result, the
Company is revising its previous full year 2009 earnings per share guidance of
$2.84-$2.94 per share to $2.61-$2.71 per
share. Management continues to expect gross margins of 40% and free
cash flow to be in excess of $300 million for the full year.
The revision in the
Company’s guidance does not reflect any change in its operational
outlook.
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
and www.stanleyblackanddecker.com.
Contact: Kate
White, Director of Investor Relations
(860) 827-3833
kwhite@stanleyworks.com
Free cash flow is
defined as cash flow from operations less capital and 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. The company believes this an important measure of
its liquidity, of its ability to fund future growth and to provide a return to
the shareowners.
CAUTIONARY
STATEMENTS
Under
the Private Securities Litigation Reform Act of 1995
Statements in this
press release that are not historical, including but not limited to those
regarding the Company’s ability to: (i) generate full year 2009 EPS in the range
of $2.61 – 2.71 per fully diluted share; (ii) generate free cash flow
to exceed $300 million for 2009; and (iii) achieve gross margins of 40%
(collectively, the “Results”); are “forward looking statements” and subject to
risk and uncertainty.
The
Company’s ability to deliver the results as described above 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 tailor products and services with customers’ needs; (ii)
stabilization in the Company’s end markets; (iii) weaker U.S. dollar
versus other major currencies, lower restructuring charges and a more favorable
effective tax rate; (iv) achieving full year 2009 gross margins of approximately
40%; (v) successful integration of businesses and acquisitions(including the
completion of the merger with, and integration of, Black & Decker);
(vi) the continued acceptance of technologies used in the Company’s
products and services; (vii) the Company’s ability to manage existing
Sonitrol franchisee and Mac Tools distributor relationships; (viii) the
Company’s ability to minimize costs associated with any sale or discontinuance,
or acquisition, of a business or product line, including any severance,
restructuring, legal or other costs (including limiting the fees and cost of the
Black & Decker transaction to $18 million in 2009); (ix) the proceeds
realized with respect to any business or product line disposals; (x) the
extent of any asset impairments with respect to any businesses or product lines
that are sold or discontinued; (xi) the success of the Company’s efforts
to manage freight costs, steel and other commodity costs; (xii) the
Company’s ability 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 any inflation increases; (xiii) the Company’s
ability to generate free cash flow and maintain a strong debt to capital ratio;
(xiv) the Company’s ability to identify and effectively execute
productivity improvements and cost reductions, while minimizing any associated
restructuring charges; (xv) the Company’s ability to obtain favorable
settlement of routine tax audits; (xvi) the ability of the Company to
generate earnings sufficient to realize future income tax benefits during
periods when temporary differences become deductible; (xvii) the continued
ability of the Company to access credit markets under satisfactory terms; and
(xviii) the Company’s ability to negotiate satisfactory payment terms under
which the Company buys and sells goods, services, materials and
products.
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The
Company’s ability to deliver the Results is also dependent upon: (i) the
success of the Company’s marketing and sales efforts; (ii) 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; (iii) the Company’s ability
to continue improvements in working capital through effective management of
accounts receivable and inventory levels; (iv) the ability to continue
successfully managing and defending claims and litigation; (v) the success
of the Company’s efforts to mitigate any cost increases generated by, for
example, increases in the cost of energy or significant Chinese Renminbi or
other currency appreciation; (vi) the geographic distribution of the
Company’s earnings; and (vii) the commitment to and success of the Stanley
Fulfillment System.
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; the impact the tightened credit markets may have on the
Company or its customers or suppliers; the extent to which the Company has to
write off accounts receivable or assets or experiences supply chain
disruptions in connection with bankruptcy filings by customers or
suppliers; increasing competition; changes in laws, regulations and policies
that affect the Company, including, but not limited to trade, monetary, tax and
fiscal policies and laws; the timing and extent of any inflation or deflation in
2009; 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. and European economies; the extent to
which world-wide markets associated with homebuilding and remodeling continue to
deteriorate; the impact of events that cause or may cause disruption in the
Company’s manufacturing, distribution and sales networks such as war, terrorist
activities, and political unrest; and recessionary or expansive trends in the
economies of the world in which the Company operates, including, but not limited
to, the extent and duration of the current recession in the US economy. 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.
Additional
Information
The proposed
transaction involving Stanley and Black & Decker will be submitted to the
respective stockholders of Stanley and Black & Decker for their
consideration. In connection with the proposed transaction, Stanley
will file with the Securities and Exchange Commission (the “SEC”) a registration
statement on Form S-4 that will include a joint proxy statement of Stanley and
Black & Decker that will also constitute a prospectus of
Stanley. Investors and security holders are urged to read the joint
proxy statement/prospectus and any other relevant documents filed with the SEC
when they become available, because they will contain important
information. Investors and security holders may obtain a free copy of
the joint proxy statement/prospectus and other documents (when available) that
Stanley and Black & Decker file with the SEC at the SEC’s website at
www.sec.gov and Stanley’s website related to the transaction at
www.stanleyblackanddecker.com. In addition, these documents may be
obtained from Stanley or Black & Decker free of charge by directing a
request to Investor Relations, The Stanley Works, 1000 Stanley Drive, New
Britain, CT 06053, or to Investor Relations, The Black & Decker Corporation,
701 E. Joppa Road, Towson, Maryland 21286, respectively.
Certain Information
Regarding Participants
Stanley, Black &
Decker and certain of their respective directors and executive officers may be
deemed to be participants in the proposed transaction under the rules of the
SEC. Investors and security holders may obtain information regarding
the names, affiliations and interests of Stanley’s directors and executive
officers in Stanley’s Annual Report on Form 10-K for the year ended January
3, 2009, which was filed with the SEC on February 26, 2009, and its
proxy statement for its 2009 Annual Meeting, which was filed with the SEC on
March 20, 2009. Investors and security holders may obtain information
regarding the names, affiliations and interests of Black & Decker’s
directors and executive officers in Black & Decker’s Annual Report on
Form 10-K for the year ended December 31, 2008, which was filed
with the SEC on February 17, 2009, and its proxy statement for its 2009
Annual Meeting, which was filed with the SEC on March 16,
2009. These documents can be obtained free of charge from the sources
listed above. Additional information regarding the interests of these
individuals will also be included in the joint proxy statement/prospectus
regarding the proposed transaction when it becomes available.
Non-Solicitation
A
registration statement relating to the securities to be issued by Stanley in the
proposed transaction will be filed with the SEC, and Stanley will not issue,
sell or accept offers to buy such securities prior to the time such registration
statement becomes effective. This document shall not constitute an
offer to sell or the solicitation of an offer to buy, nor shall there be any
sale of such securities, in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to appropriate registration or qualification
under the securities laws of such jurisdiction.
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