Bermuda's weathered reputation as a reputable place to do business was given a huge boost on Friday when hardware manufacturer Stanley Works announced it will reincorporate on the Island.

Stanley Works said that its Board of Directors has unanimously approved a plan to modify Stanley's corporate structure so that the company's place of incorporation will be changed from Connecticut to Bermuda.

Under the plan, a newly formed Bermuda corporation, The Stanley Works, Ltd., will become the parent company of The Stanley Works.

The proposal is subject to approval by two-thirds of the company's shareowners at its annual meeting in April.

John M. Trani, Chairman and Chief Executive Officer of The Stanley Works, said: "This strategic initiative will strengthen our company over the long-term. An important portion of our revenues and earnings are derived from outside the United States, where nearly 50 percent of our people reside. Moreover, an increasing proportion of our materials are being purchased from global sources. This change will create greater operational flexibility, better position us to manage international cash flows and help us to deal with our complex international tax structure."

Upon completion of the reincorporation, which is expected to be in mid-2002, shareowners of The Stanley Works will receive the same number of shares of The Stanley Works, Ltd. as they hold in The Stanley Works. These shares will have substantially the same attributes as The Stanley Works common shares, and are expected to be listed on the New York Stock Exchange under the symbol SWK, the same symbol under which the company's stock currently trades. Generally, upon the exchange of shares of The Stanley Works for shares of Stanley Works, Ltd., shareowners subject to U.S. federal income taxation will recognise as gains any appreciation in the market value of Stanley Works shares over their cost basis, and a new holding period will commence.

At its annual securities analysts' meeting on Friday, Stanley Works indicated that it expects earnings per share for 2002 to increase by 18 percent to 22 percent over $2.31 per fully-diluted share earned in 2001, exclusive of restructuring and other special charges and credits.

This is above previous guidance of $2.70 per fully-diluted share (up 17 percent) and above the current First Call consensus of analyst expectations of $2.68 per share (up 16 percent). Net sales are expected to be up modestly from 2001 levels, likely flat in the first half and up 2 percent to 4 percent in the second half of the year on the strength of share gains and with no improvement in current economic conditions.

The anticipated earnings increase is principally the result of improved operations and also includes 6 cents per share improvement from an accounting standards change related to goodwill amortisation.

The company also provided guidance for the first quarter of 2002, indicating it expects fully-diluted earnings per share to increase by approximately 2 percent over 54 cents per fully-diluted share earned in 2001. Net sales are expected to be approximately flat with first quarter 2001 levels. The anticipated earnings increase includes 1 cent per share improvement from an accounting standards change related to goodwill amortisation and 2 cents of transaction costs for the proposed Bermuda reincorporation.

Finally, management indicated that anticipated benefits of its planned change in place of incorporation to Bermuda are not reflected in the full year 2002 earnings guidance described above. The Stanley Works, an S&P 500 company, is a worldwide supplier of tools and doors and related hardware products for professional, industrial and consumer use.