$65 to $85 Million of Non-Cash Restructuring Charges to be Recognized in
Fourth Quarter 2005
ATLANTA, Dec. 20 /PRNewswire-FirstCall/ -- Newell Rubbermaid Inc.
(NYSE: NWL) today announced that it has commenced Project Acceleration, its
three-year global initiative designed to fuel sustainable growth in sales,
earnings and cash flow. Announced September 15, 2005, the initiative will
increase investment behind the company's strategic brands, reduce
manufacturing overhead to achieve a best-cost position and further strengthen
the portfolio.
The company will record $65 to $85 million ($47 to $62 million after-tax)
in non-cash restructuring charges related to the initiative in the fourth
quarter 2005 and continues to expect cumulative charges of $350 to
$400 million ($295 to $340 million after-tax) over the life of the initiative.
Approximately 60% of the cumulative charges will be cash charges. Annualized
savings are projected to exceed $120 million upon conclusion of the
initiative, representing an average two-year cash payback and an estimated
after-tax rate of return of 40 percent.
Mark Ketchum, chief executive officer of Newell Rubbermaid, said, "Our
team has generated significant momentum in 2005 as we carry out our strategy
to reduce manufacturing overhead and utilize Newell Operational Excellence to
streamline businesses. This has allowed us to begin executing Project
Acceleration in the fourth quarter of 2005 rather than the first quarter of
2006 as previously anticipated. These efforts are critical to achieving the
company's long-term financial targets and an important part of Newell
Rubbermaid's strategy to invest in the brands that matter most to consumers
and to strengthen our portfolio."
2005 and 2006 Outlook
For the full year 2005, the company expects diluted earnings per share
from continuing operations to be in the range of $1.43 to $1.48. This range
excludes previously announced non-cash impairment charges of approximately
$34 million, or $0.12 per share, related to the United Kingdom Window Fashions
business in the company's Home Fashions segment, and excludes non-cash
restructuring charges of approximately $65 to $85 million, or $0.17 to $0.22
per share, related to Project Acceleration. This outlook also does not
include total net losses reported as discontinued operations of $95 to
$105 million.
For the full year 2006, the company continues to expect diluted earnings
per share from continuing operations of $1.50 to $1.60. This outlook does not
include approximately $145 to $175 million ($120 to $145 million after-tax) of
restructuring charges related to Project Acceleration. For the full year 2006,
the company expects diluted earnings per share from continuing operations, on
a GAAP basis, to be in the range of $1.02 to $1.12.
A reconciliation of the 2005 and 2006 full year earnings outlook is as
follows:
Full Year 2005 Full Year 2006
Diluted earnings per share from
continuing operation (as reported): $1.12-$1.17 $1.02-$1.12
Impairment charges $0.12 -
Restructuring charges $0.17-$0.22 $0.44-$0.53
Diluted earnings per share from
continuing operations
(excluding charges): $1.43-$1.48 $1.50-$1.60
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, impairment and other charges, potential losses on
divestiture, costs and cost savings and the value thereof, debt ratings, and
management's plans, projections and objectives for future operations and
performance. These statements are accompanied by words such as "expect,"
"project," "will," "enable," "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 in various parts of the world; competition with numerous other
manufacturers and distributors of consumer products; major retailers' strong
bargaining power; changes in the prices of raw materials used by the company;
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 in the face of foreign regulations and other impediments;
our ability to implement successfully information technology solutions
throughout our organization; our ability to improve productivity and
streamline operations; our ability to complete strategic acquisitions; our
ability to integrate previously acquired businesses; the risks inherent in our
foreign operations and those factors listed in the company's most recent Form
10-Q or 10-K, including Exhibit 99.1 thereto, filed with the Securities and
Exchange Commission.
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 the Company
Newell Rubbermaid Inc. is a global marketer of consumer and commercial
products with 2004 sales of $6.4 billion and a powerful brand family including
Sharpie(R), Paper Mate(R), EXPO(R), DYMO(R), Waterman(R), IRWIN(R), LENOX(R),
BernzOmatic(R), Rubbermaid(R), Graco(R), Calphalon(R) and Goody(R). The
company is headquartered in Atlanta, Ga., and has approximately 30,000
employees worldwide.
This press release and additional information about the company are
available on the company's web site at http://www.newellrubbermaid.com.
SOURCE Newell Rubbermaid
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http://www.newellco.com
http://www.newellrubbermaid.com
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http://www.prnewswire.com/comp/138728.html
CONTACT:
Nancy de Jonge Davis, Vice President,
Investor Relations & Corporate Communications of Rubbermaid,
+1-770-407-3994, or fax +1-770-407-3983
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