-- Net sales from continuing operations were $919 million, down 20% versus

prior year as growth due to acquisitions (+6%) and price (+2%) were more

than offset by unit volume declines of 24%. Currency translation

impacted revenues unfavorably by 4%.

-- The 2Q'09 gross margin rate improved 160 bps versus 2Q'08 to a

record 39.9%. The increase was driven by price realization and improved

mix due to performance in Security. Lower material input prices

essentially offset negative productivity associated with volume

declines.

-- SG&A expenses were 27.8% of sales, down $28 million versus the prior

year. Excluding acquisitions, SG&A expenses declined 18% versus the

prior year.

-- As a result of steeper than expected unit volume declines in the

quarter, management elected to implement additional cost actions

effective in July 2009. These actions are largely a continuation of the

company's focus on rapidly adjusting its cost structure to current

volume levels without adversely affecting future growth potential. The

actions are expected to generate annual savings of $50 million, of which

$25 million will be realized in 2009.

-- The company posted free cash flow of $43 million for the quarter, driven

primarily by working capital benefits. The Stanley Fulfillment System

continued to favorably impact results as working capital turns improved

slightly to 4.9 from 4.8 in the prior year.

-- As disclosed in its 1Q'09 10Q, the Company repurchased $103 million

of its junior subordinated debt securities issued in November 2005 for

$59 million in cash on May 1, 2009. The transaction resulted in a pretax

gain of $44 million and had a $0.34 positive impact on EPS. Under the

American Recovery & Reinvestment Act of 2009, taxes payable on the

gain are to be deferred and paid out ratably over five years beginning

2014.

John F. Lundgren, Chairman and Chief Executive Officer, commented, "We are extremely pleased with the record gross margins achieved in the face of the continued decline in unit volume. Coupled with the fact that we are gaining share in several of our markets, we believe that Stanley is extremely well positioned for growth and increased profitability once our end markets turn around."

Segment Results:

2Q'09__ __ Versus 2Q'08

($ millions)__ Segment__ Segment__ Segment__ Segment

Sales__ Profit__ Profit Rate__ Sales Profit__ Profit Rate

Security__ $391__ $74__ 19.0%__ +8%__ +13%__ +80 bp

Industrial__ $204__ $19__ 9.4%__ -40%__ -56%__ -360 bp

CDIY__ $324__ $37__ 11.3%__ -28%__ -45%__ -330 bp

-- The Security segment continued to benefit from the well- executed

integration of accretive acquisitions and ongoing strategic cost

management in order to post a 19.0% profit margin. Organic revenues for

the segment declined 8%. For the Convergent (Electronic) Security

Solutions (CSS) business, organic revenue declines were in the low teens

as increased recurring monthly revenue (RMR) and price partially offset

lower installation revenues. Mechanical Access Solutions (MAS) organic

revenues decreased mid-single digits, due to lower volume partially

offset by an increase in price. The segment was helped by the relative

strength in the refurbish/renovation market and its consistent focus on

customer service, which lead to increased customer captivity and market

share gains.

-- Industrial revenues fell 40% versus prior year due to ongoing weakness

in Europe and the U.S. where unit volume fell 39% in both regions. The

impact of foreign exchange pushed European revenues down 8% versus prior

year. Customer inventory corrections within the Industrial and

Automotive Tools businesses accounted for approximately 50% of the total

unit volume declines experienced in Europe and the U.S. Segment profit

rate decreased due to sales volume declines combined with the longer

time frame associated with European cost savings realization, which will

be fully realized later in the year.

-- While CDIY withstood unit volume weakness across the globe (the U.S. and

Europe were down 24% and 27%, respectively) during 2Q, there are

indications that year-over-year sales trends are beginning to show signs

of improvement. Foreign exchange had a 5% negative impact on the

business, which was partially offset by a 3% increase in price versus

2Q'08. The positive impacts of price and productivity on the

segment profit rate were more than offset by sales volume declines

combined with the longer time frame associated with the implementation

of cost reduction actions in Europe. The Bostitch integration announced

in 1Q'09 continues to exceed targets on a gross margin level and

provided an overall lift to the segment.

James M. Loree, Executive Vice President and Chief Operating Officer stated, "While we are clearly still being impacted by severe revenue declines in CDIY and Industrial, we are encouraged by our ability to carefully manage costs while also focusing on growth, brand support and best-in-class service. Our Security businesses continue to show resilience with 9% organic growth in the CSS recurring revenue base and total segment operating profit margins of 19%."

Management expects full year 2009 EPS to be in the range of $2.34 - $2.84 ($2.00 - $2.50 range plus the 2Q'09 $0.34 gain on debt extinguishment) based on the following new/updated assumptions:

-- Unit volume shipments in 2009 will be down 18% - 20% (as opposed to down

13% - 15%) versus 2008. The steep volume declines are anticipated to

begin to ease in the second half of the year as the company

anniversaries a weak set of prior year comparables, industrial customer

inventory corrections gradually abate and the benefit of CDIY share

gains materializes.

-- The gross margin rate is expected to be strong for the remainder of the

year and will likely range between 38-39% in the second half of the year

due to pricing, material deflation and continued favorable performance

in the Security segment.

-- The cost structure has been adjusted slightly by an additional $50

million in savings on an annualized basis. The incremental per share

benefit is expected to total approximately $0.24 in 2009. This brings

the total 2009 per share cost reduction benefits to $2.27, inclusive of

the $2.03 benefit from the cost reduction programs previously announced

in 2008 and 1Q'09. Total restructuring and related charges for

2009 are still expected to be $45 million.

For 2010, the per share benefit of all programs is expected to be $0.99 ($0.24 from 4Q'08, $0.51 from 1Q'09 and $0.24 from 2Q'09).

Free cash flow for 2009 is expected to be approximately $300 million, based on expected working capital turn improvement of approximately 10% versus 2008. The company has leveraged strong process controls as a part of the Stanley Fulfillment System to improve working capital turns in these conditions.

Donald Allan Jr., Vice President and Chief Financial Officer, commented, "Our financial priorities remain unchanged in this environment of significant negative volume trends which have dramatically reduced our earnings potential this year. We will maintain a laser focus on the Stanley Fulfillment System processes to drive further improvements in working capital in order to achieve our free cash flow objectives for 2009 and protect our balance sheet."

The company will host a conference call with investors at 10:00am ET, Wednesday, July 22nd, 2009 to discuss quarterly results. The slides that will accompany the conference call are available at this time on www.stanleyworks.com. The call will be accessible by telephone at (877) 242-3653 and from outside the U.S. at (763) 416- 6917 with the conference identification number 19198545; also, via the Internet at www.stanleyworks.com by selecting "Events and Webcasts" from the "Investors" section of the web site.