93556--2/26/2009--STANLEY

related topics

{acquisition, growth, future}

{tax, income, asset}

{operation, international, foreign}

{customer, product, revenue}

{competitive, industry, competition}

{capital, credit, financial}

{personnel, key, retain}

{product, liability, claim}

{financial, litigation, operation}

{cost, regulation, environmental}

{system, service, information}

The Company s growth and repositioning strategies include acquisitions. The Company s recent acquisitions may not further its strategies and the Company may not be able to identify suitable future acquisition candidates. The Company s acquisitions may result in certain risks for its business and operations. The Company may incur significant additional indebtedness, or issue additional equity securities, in connection with future acquisitions which may restrict the manner in which it conducts business. The potential issuance of such securities may limit the Company s ability to implement elements of its growth strategy and may have a dilutive effect on earnings. The Company s results of operations could be negatively impacted by inflationary or deflationary economic conditions that affect the cost of raw materials, freight, energy, labor and sourced finished goods. Tightening of capital and credit markets could adversely affect the Company by limiting the Company s or its customers ability to borrow or otherwise obtain cash. The Company is exposed to market risk from changes in foreign currency exchange rates which could negatively impact profitability. The Company s business is subject to risks associated with sourcing and manufacturing overseas. Large customer concentrations and related customer inventory adjustments may negatively impact sales, results of operations and cash flows. Customer consolidation could have a material adverse effect on the Company s business. If the Company were required to write down all or part of its goodwill, indefinite-lived trade names, or other definite-lived intangible assets, its net income and net worth could be materially adversely affected. Income tax payments may ultimately differ from amounts currently recorded by the Company. Future tax law changes may materially increase the Company s prospective income tax expense. The Company s failure to continue to successfully avoid, manage, defend, litigate and accrue for claims and litigation could negatively impact its results of operations or cash flows. The Company s brands are important assets of its businesses and violation of its trademark rights by imitators, or the failure of its licensees or vendors to comply with the Company s product quality, manufacturing requirements, marketing standards, and other requirements could negatively impact revenues and brand reputation. Successful sales and marketing efforts depend on the Company s ability to recruit and retain qualified employees. The Company faces active competition and if it does not compete effectively, its business may suffer. The performance of the Company may suffer from business disruptions associated with information technology, system implementations, or catastrophic losses affecting distribution centers and other facilities.

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93556--2/26/2009--STANLEY_WORKS