- Delivers on First Quarter Financial Guidance, including Sales Growth and
Normalized EPS
- Raises Full Year Sales Outlook to +6 to +8% to Reflect Acquisitions and
Foreign Currency Benefit
- Adjusts Full Year Gross Margin and Normalized EPS Outlook for Higher Cost
Inflation
ATLANTA, April 24, 2008 /PRNewswire-FirstCall/ -- Newell Rubbermaid
(NYSE: NWL) today announced its first quarter 2008 financial results.
Net sales grew 3.6 percent to $1.43 billion in the first quarter,
compared to $1.38 billion in the prior year. Foreign exchange contributed
3.3 percent to sales growth. Also contributing to the sales improvement
were double-digit increases in the Home & Family segment and the Rubbermaid
Commercial and Rubbermaid Food business units, offset by declines in the
Tools & Hardware and Office Products businesses in the US.
In other recent milestones, the company closed on two important
strategic acquisitions, Aprica and Technical Concepts, which will deliver
category expansion and wider geographic reach in the Baby & Parenting
Essentials and Commercial Products business units, respectively. In
addition, the company's SAP implementation remained on schedule with a
successful go-live in the Home & Family segment. The company also continues
to benefit from its healthy pipeline of innovative new products that better
meet end-user needs, including the recent launches of Graco(R)
Sweetpeace(TM) Soothing Center(TM), Rubbermaid(R) Produce Saver(TM) fruit
and vegetable storage containers, and the Rubbermaid(R) Pulse(TM)
Microfiber Cleaning system from the Commercial Products business unit.
"I am very proud of our employees for their successful efforts to
deliver our first quarter commitments in the face of significant economic
headwinds," said Mark Ketchum, president and chief executive officer of
Newell Rubbermaid. "We are taking the long-term view by continuing to
invest in strategic acquisitions, new and innovative products, and other
strategic SG&A to fuel the progress of Newell Rubbermaid's multi-year
transformation. Looking ahead to the remainder of the year, we are raising
our full year sales projection to reflect the contribution of the
acquisitions and favorable foreign currency, but adjusting our full year
earnings expectations downward to reflect the unprecedented rate of
increase in cost inflation in raw materials and sourced products."
Gross margin during the first quarter was 34.2 percent, approximately
flat compared to last year, as higher productivity and favorable pricing
was offset by increased cost inflation.
Excluding Project Acceleration restructuring costs of $18.4 million in
2008 and $15.5 million in 2007, operating income was $129.5 million,
compared to $136.3 million in the prior year, reflecting the company's
continued investment in strategic brand building activities and corporate
initiatives.
Normalized earnings, which exclude Project Acceleration restructuring
costs and one-time tax items, were $0.27 per diluted share, consistent with
the company's guidance and flat versus last year.
Income from continuing operations, as reported, was $57.4 million, or
$0.21 per diluted share, compared to $65.1 million, or $0.23 per diluted
share, in the prior year.
Excluding Project Acceleration restructuring costs, income from
continuing operations was $74.0 million, or $0.27 per diluted share,
compared to the prior year's result of $78.0 million, or $0.28 per diluted
share. Income from continuing operations in the first quarter 2007 included
a one-time tax benefit of $1.9 million, or $0.01 per diluted share. A
reconciliation of the results "as reported" to results "excluding charges"
is below.
Operating cash flow was $(123.2) million, compared to $14.5 million for
the prior year. Capital expenditures were $40.0 million, compared to $32.6
million for the prior year.
A reconciliation of the first quarter 2008 and last year's results is
as follows:
Q1 2008 Q1 2007
Diluted earnings per share from
continuing operations (as reported): $0.21 $0.23
Project Acceleration restructuring costs $0.06 $0.05
Diluted earnings per share from
continuing operations (excluding charges): $0.27 $0.28
Tax benefits $0.00 ($0.01)
"Normalized" EPS: $0.27 $0.27
2008 Full Year Guidance
The company expects net sales growth of between six and eight percent
for the full year, including the impact of the Technical Concepts and
Aprica acquisitions. Internal sales growth, which excludes the effect of
significant acquisitions, is now projected at between two and four percent
for the full year, in large part driven by stronger foreign currency in
combination with internal sales growth in the Rubbermaid Commercial
business unit and the Home & Family segment.
The company now expects savings from Project Acceleration, ongoing
productivity initiatives and favorable product mix to be largely offset by
the impact of cost inflation, with resulting gross margin expansion of
between 25 and 75 basis points as compared with the prior year. The company
remains committed to the reinvestment of a significant portion of its gross
margin expansion into strategic brand building and corporate initiatives.
Normalized earnings of between $1.80 and $1.90 per diluted share are
anticipated. The decrease as compared with the company's previous guidance
of $1.95 to $2.00 is attributable to higher cost inflation in raw materials
and sourced products as well as the dilutive impact of acquisitions.
The company continues to anticipate operating cash flow of between $600
and $650 million, including approximately $100 million in restructuring
cash payments. Capital expenditures projections are unchanged at $160 to
$180 million.
2008 Second Quarter Guidance
For the second quarter, the company expects net sales to grow between
six and seven percent. Internal sales are projected to increase two to
three percent, driven primarily by the favorable impact of foreign currency
and sales growth in the Rubbermaid Commercial and Rubbermaid Food business
units and the Home & Family segment.
The company anticipates normalized earnings will range from $0.47 to
$0.50 per diluted share, compared to $0.55 last year, a result of higher
cost inflation in raw materials and sourced products, the amortization of
acquired intangibles and other one time acquisition costs.
A reconciliation of the second quarter and full year 2008 earnings
outlook is as follows:
Q2 2008 FY 2008
Diluted earnings per share from
continuing operations (as reported): $0.39 - $0.42 $1.40 - $1.50
Project Acceleration restructuring costs $0.07 - $0.10 $0.37 - $0.44
Diluted earnings per share from
continuing operations (excluding charges): $0.47 - $0.50 $1.80 - $1.90
Tax benefits $0.00 $0.00
"Normalized" EPS: $0.47 - $0.50 $1.80 - $1.90
Conference Call
The company's first quarter 2008 earnings conference call is scheduled
for today, April 24, 2008, at 9:00 a.m. ET. To listen to the webcast, use
the link provided under Events & Presentations in the Investor Relations
section of Newell Rubbermaid's Web site at http://www.newellrubbermaid.com. The
webcast will be available for replay for two weeks. A brief supporting
slide presentation will be available prior to the call under Quarterly
Earnings in the Investor Relations section on the company's Web site.
Caution Concerning Forward-Looking Statements
The statements in this press release that are not historical in nature
constitute forward-looking statements. These forward-looking statements
relate to information or assumptions about the effects of Project
Acceleration, sales, income/(loss), earnings per share, operating income or
gross margin improvements, capital and other expenditures, cash flow,
dividends, restructuring costs, costs and cost savings, debt ratings, and
management's plans, projections and objectives for future operations and
performance. These statements are accompanied by words such as
"anticipate," "expect," "project," "will," "believes," "estimate" and
similar expressions. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Important factors
that could cause actual results to differ materially from those suggested
by the forward-looking statements include, but are not limited to, our
dependence on the strength of retail economies; competition with other
manufacturers and distributors of consumer products; major retailers'
strong bargaining power; changes in the prices of raw materials and sourced
products; our ability to develop innovative new products and to develop,
maintain and strengthen our end-user brands; our ability to expeditiously
close facilities and move operations while managing foreign regulations and
other impediments; our ability to implement successfully information
technology solutions throughout our organization; our ability to improve
productivity and streamline operations; the risks inherent in our foreign
operations and those factors listed in the company's 2007 Annual Report on
Form 10-K, filed with the Securities and Exchange Commission. Changes in
such assumptions or factors could produce significantly different results.
The information contained in this news release is as of the date indicated.
The company assumes no obligation to update any forward-looking statements
contained in this news release as a result of new information or future
events or developments.
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of
Regulation G promulgated by the Securities and Exchange Commission.
Included in this release is a reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures calculated in
accordance with GAAP.
About Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of
consumer and commercial products with sales of over $6 billion and a strong
portfolio of brands, including Rubbermaid(R), Sharpie(R), Graco(R),
Calphalon(R), Irwin(R), Lenox(R), Levolor(R), Paper Mate(R), Dymo(R),
Waterman(R), Parker(R), Goody(R), BernzOmatic(R) and Amerock(R). The
company is headquartered in Atlanta, Ga., and has approximately 22,500
employees worldwide.
This press release and additional information about Newell Rubbermaid
are available on the company's Web site, http://www.newellrubbermaid.com.
NWL-EA
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
Reconciliation of Results "As Reported" to Results
"Excluding Charges"
Three Months Ended March 31,
2008
As Charges Excl.
Reported (1) Charges
Net sales $1,433.7 $- $1,433.7
Cost of products sold 943.2 - 943.2
GROSS MARGIN 490.5 - 490.5
% of sales 34.2% 34.2%
Selling, general &
administrative expenses 361.0 - 361.0
% of sales 25.2% 25.2%
Restructuring costs 18.4 (18.4) -
OPERATING INCOME 111.1 18.4 129.5
% of sales 7.7% 9.0%
Nonoperating expenses:
Interest expense, net 25.8 - 25.8
Other expense, net 0.2 - 0.2
26.0 - 26.0
INCOME BEFORE INCOME TAXES 85.1 18.4 103.5
% of sales 5.9% 7.2%
Income taxes 27.7 1.8 29.5
Effective rate 32.5% 28.5%
INCOME FROM CONTINUING
OPERATIONS 57.4 16.6 74.0
% of sales 4.0% 5.2%
Discontinued operations, net of tax:
Net loss (0.5) 0.5 -
NET INCOME $56.9 $17.1 $74.0
% of sales 4.0% 5.2%
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS:
Basic $0.21 $0.06 $0.27
Diluted $0.21 $0.06 $0.27
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS:
Basic $(0.00) $0.00 $-
Diluted $(0.00) $0.00 $-
EARNINGS PER SHARE:
Basic $0.21 $0.06 $0.27
Diluted $0.20 $0.06 $0.27
AVERAGE SHARES OUTSTANDING:
Basic 276.9 276.9
Diluted 278.2 278.2
Three Months Ended March 31,
2007
As Charges Excl. YOY
Reported (2) Charges % Change
Net sales $1,384.4 $- $1,384.4 3.6%
Cost of products sold 909.7 - 909.7
GROSS MARGIN 474.7 - 474.7 3.3%
% of sales 34.3% 34.3%
Selling, general &
administrative expenses 338.4 - 338.4 6.7%
% of sales 24.4% 24.4%
Restructuring costs 15.5 (15.5) -
OPERATING INCOME 120.8 15.5 136.3 (5.0)%
% of sales 8.7% 9.8%
Nonoperating expenses:
Interest expense, net 27.4 - 27.4
Other expense, net 0.8 - 0.8
28.2 - 28.2 (7.8)%
INCOME BEFORE INCOME TAXES 92.6 15.5 108.1 (4.3)%
% of sales 6.7% 7.8%
Income taxes 27.5 2.6 30.1 (2.0)%
Effective rate 29.7% 27.8%
INCOME FROM CONTINUING
OPERATIONS 65.1 12.9 78.0 (5.1)%
% of sales 4.7% 5.6%
Discontinued operations, net of tax:
Net loss (15.8) 15.8 -
NET INCOME $49.3 $28.7 $78.0 (5.1)%
% of sales 3.6% 5.6%
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS:
Basic $0.24 $0.04 $0.28
Diluted $0.23 $0.05 $0.28
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS:
Basic $(0.06) $0.06 $-
Diluted $(0.05) $0.05 $-
EARNINGS PER SHARE:
Basic $0.18 $0.10 $0.28
Diluted $0.18 $0.10 $0.28
AVERAGE SHARES OUTSTANDING:
Basic 275.9 275.9
Diluted 277.9 277.9
(1) Charges excluded from "as reported" results for 2008 consist of $18.4
million of Project Acceleration restructuring costs and the associated tax
effects and a $0.5 million net loss related to discontinued operations.
(2) Charges excluded from "as reported" results for 2007 consist of $15.5
million of Project Acceleration restructuring costs and the associated tax
effects and a $15.8 million net loss related to discontinued operations.
Newell Rubbermaid Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
March 31, March 31,
Assets: 2008 2007
Cash and cash equivalents $752.1 $217.8
Accounts receivable, net 1,029.6 979.3
Inventories, net 1,091.7 934.4
Deferred income taxes 102.1 96.3
Prepaid expenses and other 127.6 127.1
Total Current Assets 3,103.1 2,354.9
Property, plant and equipment, net 690.3 735.6
Deferred income taxes 24.6 -
Goodwill 2,665.3 2,441.9
Other intangible assets, net 508.2 471.9
Other assets 214.3 232.5
Total Assets $7,205.8 $6,236.8
Liabilities and Stockholders' Equity:
Accounts payable $571.6 $555.1
Accrued compensation 100.4 98.1
Other accrued liabilities 703.8 617.9
Income taxes payable 15.3 0.9
Notes payable 11.4 21.6
Current portion of long-term debt 900.3 2.2
Total Current Liabilities 2,302.8 1,295.8
Long-term debt 1,946.9 2,320.8
Deferred income taxes - 23.2
Other non-current liabilities 706.2 703.7
Stockholders' Equity 2,249.9 1,893.3
Total Liabilities and
Stockholders' Equity $7,205.8 $6,236.8
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(in millions)
Three Months Ended March 31,
2008 2007
Operating Activities:
Net income $56.9 $49.3
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 44.2 46.1
Deferred income taxes 24.5 37.6
Non-cash restructuring costs (3.8) 1.2
(Gain) loss on sale of assets (0.1) 0.3
Stock-based compensation
expense 7.5 8.5
Loss on disposal of
discontinued operations 0.5 15.6
Non-cash income tax benefits - (1.9)
Other 0.4 (1.9)
Changes in operating assets and
liabilities, excluding the effects of
acquisitions:
Accounts receivable 156.0 140.2
Inventories (131.9) (77.7)
Accounts payable (53.4) 3.1
Accrued liabilities and other (223.4) (205.9)
Discontinued operations (0.6) -
Net cash (used in) provided by
operating activities $(123.2) $14.5
Investing Activities:
Acquisitions, net of cash acquired $(28.9) $(8.3)
Capital expenditures (40.0) (32.6)
Disposals of non-current assets
and sales of businesses 0.5 (7.3)
Net cash used in investing
activities $(68.4) $(48.2)
Financing Activities:
Proceeds from issuance of debt,
net of debt issuance costs $747.3 $349.7
Payments on notes payable and debt (79.6) (253.0)
Cash dividends (58.8) (58.6)
Proceeds from exercised stock
options and other (1.0) 11.7
Net cash provided by financing
activities $607.9 $49.8
Currency rate effect on cash and
cash equivalents $6.6 $0.7
Increase in cash and cash
equivalents $422.9 $16.8
Cash and cash equivalents at
beginning of period 329.2 201.0
Cash and cash equivalents at end
of period $752.1 $217.8
Newell Rubbermaid Inc.
Calculation of Free Cash Flow (1)
Three Months Ended March 31,
Free Cash Flow (in millions): 2008 2007
Net cash (used in) provided by
operating activities $(123.2) $14.5
Capital expenditures (40.0) (32.6)
Free Cash Flow $(163.2) (18.1)
(1) Free Cash Flow is defined as cash flow provided by operating
activities less capital expenditures.
Newell Rubbermaid Inc.
Financial Worksheet
(In Millions)
2008
Excluding Charges Reconciliation (1)
Ex Operat-
Net Reported Excluded Charges ing
Sales OI Charges OI Margin
Q1:
Cleaning, Organization & Decor $464.7 $48.1 $- $48.1 10.4%
Office Products 421.7 34.5 - 34.5 8.2%
Tools & Hardware 290.3 35.1 - 35.1 12.1%
Home & Family 257.0 30.6 - 30.6 11.9%
Restructuring Costs (18.4) 18.4 -
Corporate (18.8) - (18.8)
Total $1,433.7 $111.1 $18.4 $129.5 9.0%
2007
Excluding Charges Reconciliation (1)
Ex Operat-
Net Reported Excluded Charges ing
Sales OI Charges OI Margin
Q1:
Cleaning, Organization & Decor $457.4 $57.2 $- $57.2 12.5%
Office Products 406.3 35.2 - 35.2 8.7%
Tools & Hardware 293.9 34.2 - 34.2 11.6%
Home & Family 226.8 30.4 - 30.4 13.4%
Restructuring Costs (15.5) 15.5 -
Corporate (20.7) - (20.7)
Total $1,384.4 $120.8 $15.5 $136.3 9.8%
Year-over-year changes
Net Sales Operating Income(2)
$ % $ %
Q1:
Cleaning, Organization & Decor $7.3 1.6% $(9.1) (15.9)%
Office Products 15.4 3.8% (0.7) (2.0)%
Tools & Hardware (3.6) (1.2)% 0.9 2.6%
Home & Family 30.2 13.3% 0.2 0.7%
Restructuring Costs - 0.0%
Corporate 1.9 9.2%
Total $49.3 3.6% $(6.8) (5.0)%
(1) Charges are related to restructuring.
(2) Excluding restructuring charges.
Newell Rubbermaid Inc.
Three Months Ended March 31, 2008
In Millions
Currency Analysis
By Segment 2008 2007
Sales as Currency Adjusted Sales as
Reported Impact Sales Reported
Cleaning, Organization & Decor $464.7 $(8.6) $456.1 $457.4
Office Products 421.7 (20.7) 401.0 406.3
Tools & Hardware 290.3 (11.8) 278.5 293.9
Home & Family 257.0 (4.8) 252.2 226.8
Total Company $1,433.7 $(45.9) $1,387.8 $1,384.4
By Geography
United States $998.4 $- $998.4 $1,019.9
Canada 89.1 (13.1) 76.0 79.1
North America 1,087.5 (13.1) 1,074.4 1,099.0
Europe 227.6 (22.6) 205.0 192.5
Central & South America 61.2 (4.7) 56.5 48.7
All Other 57.4 (5.5) 51.9 44.2
Total Company $1,433.7 $(45.9) $1,387.8 $1,384.4
Newell Rubbermaid Inc.
Three Months Ended March 31, 2008
In Millions
Currency Analysis
By Segment Year-over-year Increase (Decrease)
Excluding Including Currency
Currency Currency Impact
Cleaning, Organization & Decor (0.3)% 1.6% 1.9%
Office Products (1.3)% 3.8% 5.1%
Tools & Hardware (5.2)% (1.2)% 4.0%
Home & Family 11.2% 13.3% 2.1%
Total Company 0.2% 3.6% 3.3%
By Geography
United States (2.1)% (2.1)% 0.0%
Canada (3.9)% 12.6% 16.6%
North America (2.2)% (1.0)% 1.2%
Europe 6.5% 18.2% 11.7%
Central & South America 16.0% 25.7% 9.7%
All Other 17.4% 29.9% 12.4%
Total Company 0.2% 3.6% 3.3%
SOURCE Newell Rubbermaid
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Related links:
http://www.newellrubbermaid.com
http://www.prnewswire.com/comp/138728.html /
CONTACT:
Nancy O'Donnell, Vice President, Investor
Relations, +1-770-407-3663, or David Doolittle, Vice President,
Corporate Communications, +1-770-407-3613, both of Newell
Rubbermaid
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