UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 29, 2004
NEWELL RUBBERMAID INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9608 36-3514169
-------- ------ ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
Deerfield Corporate Centre One
13010 Morris Road, Suite 100
Alpharetta, Georgia 30004
------------------------------ -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (770) 670-2232
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit
Number Description
------- -----------
99.1 Press Release, dated January 29, 2004, issued by
Newell Rubbermaid Inc., and Additional Financial
Information
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
The information in this Report, including the Exhibit attached hereto,
is furnished pursuant to Item 12 of this Form 8-K. Consequently, it
is not deemed "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, or otherwise subject to the liabilities of that
section. It may only be incorporated by reference in another filing
under the Exchange Act or Securities Act of 1933 if such subsequent
filing specifically references this Form 8-K.
On January 29, 2004, Newell Rubbermaid Inc. (the "Company") reported
its results for the fourth fiscal quarter ended December 31, 2003 and
the fiscal year ended December 31, 2003. The Company's press release,
dated January 29, 2004, is attached as Exhibit 99.1.
The press release contains non-GAAP financial measures. For purposes
of SEC Regulation G, a "non-GAAP financial measure" is a numerical
measure of a registrant's historical or future financial performance,
financial position or cash flows that excludes amounts, or is subject
to adjustments that have the effect of excluding amounts, that are
included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statement of income, balance
sheet or statement of cash flows of the issuer; or includes amounts,
or is subject to adjustments that have the effect of including
amounts, that are excluded from the most directly comparable measure
so calculated and presented. Operating and statistical measures and
certain ratios and other statistical measures are not non-GAAP
financial measures. For purposes of the definition, GAAP refers to
generally accepted accounting principles in the United States.
Pursuant to the requirements of Regulation G, the Company has
provided, as a part of the press release, a reconciliation of each of
the non-GAAP financial measures to the most directly comparable GAAP
financial measure. (For certain other statistical measures that are
not non-GAAP financial measures, the Company has provided other
supplemental information, also as part of the press release.)
The Company has used the financial measures that are included in the
press release for several years, both in presenting its results to
stockholders and the investment community and in its internal
2
evaluation and management of its businesses. The Company's management
believes that these measures -- including those that are "non-GAAP
financial measures" -- and the information they provide are useful to
investors because they permit investors to view the Company's
performance using the same tools that Company management uses and to
gauge the Company's progress in achieving its stated goals.
The Company's management believes that the individual measures are
also useful to investors for more specific reasons:
Operating income, net income and gross margin, excluding
restructuring and other charges, as a percentage of sales. -- These
measures are also useful to investors because they provide information
with respect to operating income, net income and gross margin related
to continuing operations after the restructuring plan is completed.
Free cash flow: Cash flow provided by operations, net of
dividends and capital expenditures. -- This measure is also useful
to investors because it is an indication of amounts of cash flow
that may be available for further investment in future growth
initiatives.
Diluted earnings per share, excluding restructuring and other
charges. -- This measure is also useful to investors because it
provides information with respect to earnings per share, both
historical and expected, related to continuing operations after the
restructuring plan is completed.
The other purpose for which the Company uses free cash flow and
earnings per share, excluding restructuring and other charges, is as
two of the performance goals that help determine the amount, if any,
of cash bonuses for corporate management employees under the Company's
management cash bonus plan.
3
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
NEWELL RUBBERMAID INC.
Date: January 29, 2004 By: /s/ Dale L. Matschullat
-----------------------------
Dale L. Matschullat
Vice President - General
Counsel & Corporate Secretary
4
EXHIBIT INDEX
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Exhibit No. Description
----------- -----------
99.1 Press Release, dated January 29, 2004, issued by
Newell Rubbermaid Inc., and Additional Financial
Information
5
EXHIBIT 99.1
------------
[NEWELL RUBBERMAID LOGO] NEWS RELEASE
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JANUARY 29, 2004 Page 1 of 5
NEWELL RUBBERMAID REPORTS
FOURTH QUARTER AND FULL YEAR 2003 RESULTS
* Delivered Strong Free Cash Flow and Inventory Improvement
* Internal Sales Grow 2.3% in the Fourth Quarter
* Continued Progress on Divestitures
ATLANTA, JANUARY 29, 2004 - Newell Rubbermaid Inc. (NYSE: NWL) today
announced its fourth quarter and full year 2003 results, delivering
net sales, earnings and free cash flow at the high-end of its fourth
quarter estimates.
FOURTH QUARTER RESULTS
Net loss in the quarter was $211.6 million, or a loss of $0.77 per
share in 2003, compared to net income of $95.8 million, or $0.36 per
share in the fourth quarter of 2002. Net income, excluding charges
in the fourth quarter, was $110.8 million versus $132.3 million in
the fourth quarter of 2002. Diluted earnings per share, calculated
on the same basis, was $0.40 compared to $0.49 in the fourth quarter
2002. A reconciliation of the results "as reported" to results
"excluding charges" is attached to this press release.
Free cash flow was a record $242.1 million in the fourth quarter,
compared to $176.6 million in the fourth quarter of 2002. This strong
performance was largely driven by improvement in working capital
management, as the company eliminated $205 million or 19 days of
inventory from the level at September 30, 2003. The company defines
free cash flow as cash generated from operations, net of capital
expenditures and dividends.
"Last year was challenging for Newell Rubbermaid, however, our team
made progress in the transformation of this company, as we
continued the execution of our restructuring plan. We are moving
quickly to reconfigure our portfolio, exiting low-margin product lines
and pursuing the divestiture of non-strategic businesses. When we
exit 2004, we believe this company will be a much leaner organization
that is ready to maximize shareholder value" said Joseph Galli, Newell
Rubbermaid CEO.
Net sales in the fourth quarter of 2003 were $2.1 billion, compared to
$2.0 billion in the fourth quarter of 2002, an increase of 3.9%.
Foreign currency translation was a benefit to sales of 3.7% during the
quarter, while pricing declined 1.8%.
[NEWELL RUBBERMAID LOGO] NEWS RELEASE
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JANUARY 29, 2004 Page 2 of 5
Internal sales growth, which excludes the impact of material
acquisitions and divestitures, increased 2.3% for the quarter.
News from the groups include:
* Irwin - Strong sales growth was seen in the Irwin hand tools
and power tool accessories businesses. The launch of the
Strait-line{R} laser products was extremely successful
and was a key driver of the fourth quarter sales
performance in the hand tools division.
* Rubbermaid - Rubbermaid Home Organization delivered strong
internal sales growth during the quarter. The division
was able to sell higher than expected levels of existing
stock of discontinued product lines in December. This
was part of the company's previously announced plan to
exit certain low-margin product lines.
* Sharpie - Despite the continued sales weakness in the
commercial writing business, the Sharpie group was able
to offset those declines through its retail channels.
* Calphalon Home - In the Calphalon Home group, the on-going
sales declines seen in the picture frames and low-end
cookware businesses, continued in the fourth quarter.
In high-end cookware, Calphalon{R} One {TM} Infused
Anodized cookware was successfully launched during this
quarter.
Gross margins decreased to 25.4% from 28.3% in the fourth quarter of
2002, due primarily to unfavorable pricing and the absorption impact
from lower manufacturing volumes, offset partially by productivity.
Excluding charges, gross margins declined to 25.7% from 28.4%.
As part of its previously announced restructuring plan, the company
recorded a fourth quarter pre-tax restructuring charge of $79.0
million primarily related to severance and facility exit costs in
connection with the company's streamlining and productivity
initiatives, and other charges of $18.8 million primarily related
to product line exits and the sale of a business.
The company made significant progress in the fourth quarter related to
its strategy to divest certain under performing non-strategic assets.
The company recorded a non-cash impairment charge of approximately
$289.4 million, in the fourth quarter of 2003, related to non-core
businesses targeted for sale. These businesses contributed
approximately $875 million in sales in 2003. The sale of these
businesses could have an adverse impact on pre-tax earnings of $44 -
$52 million ($0.11 - $0.13) and on cash flow for the year. The
company expects to provide earnings and cash flow impact related to a
particular business, if and when, the potential sales occur.
FULL YEAR RESULTS
Net sales for the full year 2003 were $7.8 billion compared to $7.5
billion in 2002, an increase of 4.0%. Foreign currency translation
was a benefit to sales of 3.1% for the year, while pricing declined
1.9%. Internal sales were flat for the full year 2003.
[NEWELL RUBBERMAID LOGO] NEWS RELEASE
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JANUARY 29, 2004 Page 3 of 5
Gross margins for the full year decreased to 26.7% from 27.6% in 2002,
due primarily to unfavorable pricing and the absorption impact from
lower manufacturing volumes, offset partially by productivity.
Excluding charges, gross margins declined to 26.9% from 27.8%.
Net loss for the full year 2003 was $46.6 million, or $0.17 loss per
share, compared to a net loss of $203.4 million, or $0.76 loss per
share in 2002. Excluding charges, net income for 2003 was $408.0
million versus $423.2 million for 2002. Diluted earnings per share,
calculated on the same basis, were $1.49 versus $1.58 for 2002.
In addition, for the full year 2003, as part of its previously
announced restructuring plan, the company recorded a pre-tax
restructuring charge of $245.0 million primarily related to severance
and facility exit costs in connection with the company's streamlining
and productivity initiatives, and other charges of $48.7 million,
related primarily product line exit costs and loss on the sale of
businesses. A reconciliation of the results "as reported" to
results "excluding charges" is attached to this press release.
PENSION LIABILITIES
As previously disclosed, the company recorded a non-cash charge to
shareholders equity of $114.5 million in the fourth quarter to record
the minimum pension liability related to the under-funded status of
the pension plan. This charge did not impact earnings or cash flow
in 2003.
OUTLOOK
For 2004, the company expects its full year 2004 internal sales to
decline 1% - 3% and expects diluted earnings per share to be in the
range of $1.48 to $1.58. This range excludes restructuring charges of
$43 - $63 million ($0.11 - $0.16 per share) and other charges of $10 -
$20 million ($0.03 - $0.05 per share) primarily related to product
line exits and charges of $70 - $90 million ($0.25 - $0.33 per share)
primarily for foreign currency translation adjustments related to the
divestiture of non-core businesses targeted for sale. This guidance
does not include the impact of any potential divestitures.
For the first quarter 2004, the company expects internal sales to
decline 1% - 3% and diluted earnings per share to be in the range of
$0.16 - $0.20. This range excludes restructuring charges of $25 - $35
million ($0.06 - $0.09 per share) and other charges of $5 - $10
million ($0.01 - $0.03 per share) primarily related to product line
exits and charges of $70 - $90 million ($0.25 - $0.33 per share)
primarily for foreign currency translation adjustments related to the
divestiture of non-core business targeted for sale. This guidance
does not include the impact of any potenial divestitures.
[NEWELL RUBBERMAID LOGO] NEWS RELEASE
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JANUARY 29, 2004 Page 4 of 5
A RECONCILIATION OF THE 2004 EARNINGS OUTLOOK IS AS FOLLOWS:
1st Quarter Full Year
----------- ---------
Diluted earnings per share ($0.23)-($0.19) $1.02 - $1.12
Excluding:
Restructuring charges $0.06 - $0.09 $0.11 - $0.16
Other charges (primarily product line exits) $0.26 - $0.36 $0.28 - $0.38
------------- -------------
Diluted earnings per share, excluding charges $0.16 - $0.20 $1.48 - $1.58
============= =============
The company expects free cash flow for the full year to be $200 to
$250 million. Expected free cash flow is calculated as follows: cash
flow from operations (estimated to be $680-$730 million), less capital
expenditures (estimated to be approximately $250 million), less
expected dividends of approximately $230 million.
CONFERENCE CALL
The company's fourth quarter and full year 2003 earnings conference
call is scheduled for today, January 29 at 9:30 ET. To participate on
the call, please RSVP domestically at (800) 240-1339 or
internationally at (706) 645-6914. A dial-in number will be provided
at that time. To listen to the web cast, use the link provided under
Investor Relations on Newell Rubbermaid's corporate home page at
www.newellrubbermaid.com.
A replay will be available approximately two hours after the call
concludes through February 29, 2004 and may be accessed domestically
at (800) 642-1687 or internationally at (706) 645-9291. Conference
call identification number 4816429 is required to access the replay.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS
The statements contained in this press release that are not historical
in nature are forward-looking statements. Forward-looking statements
are not guarantees since there are inherent difficulties in predicting
future results, and actual results could differ materially from those
expressed or implied in the forward looking statements. For a list of
major factors that could cause actual results to differ materially
from those projected, refer to Newell Rubbermaid's third quarter 2003
Form 10-Q, Exhibit 99.1, filed with the Securities and Exchange
Commission.
[NEWELL RUBBERMAID LOGO] NEWS RELEASE
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JANUARY 29, 2004 Page 5 of 5
NON-GAAP FINANCIAL
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 the differences
between these non-GAAP financial measures with the most directly
comparable financial measures calculated in accordance with GAAP.
ABOUT THE COMPANY
Newell Rubbermaid Inc. is a global marketer of consumer products with
2003 sales of over $7 billion and a powerful brand family including
Sharpie{R}, Paper Mate{R}, Parker{R}, Waterman{R}, Colorific{R},
Rubbermaid{R}, Stain Shield{TM}, Blue Ice{R}, TakeAlongs{TM},
Roughneck{R}, Brute{R}, Calphalon{R}, Little Tikes{R}, Graco{R},
Levolor{R}, Kirsch{R}, Shur-Line{R}, BernzOmatic{R}, Goody{R}, Vise-
Grip{R}, Quick-Grip{R}, IRWIN{R}, Lenox{R} and Marathon{R}. The
company is headquartered in Atlanta, Georgia and employs approximately
40,000 employees worldwide.
This press release and additional financial information about the
company's 2003 fourth quarter and full year results are available on
the company's web site at www.newellrubbermaid.com.
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 December 31,
------------------------------------------------------------------------------------
2003 2002
----------------------------------- ---------------------------------
Charges Excl. As Charges Excl.
As Reported (1) Charges Reported (2) Charges % Change
----------- --------- -------- --------- ------- --------- --------
Net sales $2,092.8 $2,092.8 $2,013.6 $2,013.6 3.9%
Cost of products sold 1,561.2 (7.1) 1,554.1 1,443.9 (1.5) 1,442.4
-------- -------- -------- -------- -------- --------
GROSS MARGIN 531.6 7.1 538.7 569.7 1.5 571.2 (5.7)%
% of sales 25.4% 25.7% 28.3% 28.4%
Selling, general &
administrative expense 350.3 (2.5) 347.8 336.4 (0.5) 335.9 3.5%
% of sales 16.7% 16.6% 16.7% 16.7%
Impairment Charge 289.4 (289.4) -
Restructuring costs 79.0 (79.0) 52.9 (52.9) -
-------- -------- -------- -------- -------- --------
OPERATING INCOME (187.1) 378.0 190.9 180.4 54.9 235.3 (18.9)%
% of sales (8.9)% 9.1% 9.0% 11.7%
Nonoperating expenses:
Interest expense 34.3 34.3 33.6 33.6
Interest income (2.2) (2.2) (0.4) (0.4)
Other 4.6 (9.2) (4.6) 4.2 0.3 4.5
-------- -------- -------- -------- -------- --------
36.7 (9.2) 27.5 37.4 0.3 37.7 (27.1)%
-------- -------- -------- -------- -------- --------
INCOME BEFORE TAXES AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (223.8) 387.2 163.3 143.0 54.6 197.6 (17.4)%
% of sales (10.7)% 7.8% 7.1% 9.8%
Income taxes (12.2) 64.7 52.5 47.2 18.1 65.3 (19.6)%
Effective rate 5.5% 32.1% 33.0% 33.0%
-------- -------- -------- -------- -------- --------
INCOME BEFORE
CUMULATIVE EFFECT ON
OF ACCOUNTING CHANGE (211.6) 322.5 110.8 95.8 36.5 132.3 (16.2)%
% of sales (10.1)% 4.8% 4.8% 6.6%
-------- -------- -------- -------- -------- --------
Cumulative effect of accounting
change - - - - - -
Three Months Ended December 31,
------------------------------------------------------------------------------------
2003 2002
----------------------------------- ---------------------------------
Charges Excl. As Charges Excl.
As Reported (1) Charges Reported (2) Charges % Change
----------- --------- -------- --------- ------- --------- --------
NET INCOME $ (211.6) $ 322.5 $ 110.8 $ 95.8 $ 36.5 $ 132.3 (16.2)%
======== ======== ======== ======== ======= =========
% of sales (10.1)% 5.3% 4.8% 6.6%
EARNINGS PER SHARE BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE:
Basic $ (0.77) $ 1.17 $ 0.40 $ 0.36 $ 0.13 $ 0.49 (18.4)%
Diluted $ (0.77) $ 1.17 $ 0.40 $ 0.36 $ 0.13 $ 0.49 (18.1)%
EARNINGS (LOSS) PER SHARE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE
Basic $ - $ - $ - $ - $ - $ - NA
Diluted $ - $ - $ - $ - $ - $ - NA
EARNINGS (LOSS) PER SHARE
Basic $ (0.77) $ 1.17 $ 0.40 $ 0.36 $ 0.13 $ 0.49 (18.4)%
Diluted $ (0.77) $ 1.17 $ 0.40 $ 0.36 $ 0.13 $ 0.49 (18.1)%
Average shares outstanding
Basic 274.4 274.4 274.4 267.4 267.4 267.4 2.6%
Diluted 274.4 274.4 274.4 268.2 268.2 268.2 2.3%
(1) Charges excluded from "as reported" results for 2003 are restructuring, acquisition or divestiture related
charges. These charges consist of $7.1 million in restructuring related costs associated with product line
exits (shown in costs of products sold), $2.4 million of restructuring costs related to relocation of property
and equipment (shown in selling, general and administrative expenses), $79.0 million of restructuring costs
related to exiting certain facilities (shown in restructuring costs), and $289.4 million in impairment
charges related to non-core businesses targeted for sale, and $9.2 million related primarily to the loss on
the sale of assets (shown in other).
(2) Charges excluded from "as reported" results for 2002 are restructuring or acquisition related charges. These
charges consist of $1.5 million in restructuring related costs associated with product line exits (shown
in costs of products sold), $0.5 million of restructuring costs related to relocation of property and
equipment (shown in selling, general and administrative expenses), $52.9 million of restructuring charges
related to exiting certain facilities (shown in restructuring costs), $0.3 of acquisition related transaction
costs (shown in other).
NEWELL RUBBERMAID INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in millions, except per share data)
EXCLUDING CHARGES RECONCILIATION
AS REPORTED Twelve Months Ended December 31,
---------------------------------------------------------------------------------------
2003 2002
-------------------------------------- ----------------------------------
Charges Excl. As Charges Excl.
As Reported (1) Charges Reported (2) Charges % Change
----------- -------- --------- ---------- ------- --------- --------
Net sales $7,750.0 $7,750.0 $7,453.9 $7,453.9 4.0%
Cost of products sold 5,682.8 (15.1) 5,667.7 5,394.2 (13.8) 5,380.4
-------- -------- -------- -------- ------- --------
GROSS MARGIN 2,067.2 15.1 2,082.3 2,059.7 13.8 2,073.5 0.4%
% of sales 26.7% 26.9% 27.6% 27.8%
Selling, general &
administrative expense 1,352.9 (3.3) 1,349.6 1,307.3 (7.4) 1,299.9 3.8%
% of sales 17.5% 17.4% 17.5% 17.4%
Impairment Charge 289.4 (289.4) - - - -
Restructuring costs 245.0 (245.0) - 122.7 (122.7) -
-------- -------- -------- -------- ------- --------
OPERATING INCOME 179.9 552.8 732.7 629.7 143.9 773.6 (5.3)%
% of sales 2.3% 9.5% 8.4% 10.4%
Nonoperating expenses:
Interest expense 145.9 - 145.9 142.1 - 142.1
Interest income (5.8) - (5.8) (4.8) - (4.8)
Other 19.7 (30.3) (10.6) 23.9 (23.7) 0.2
-------- -------- -------- -------- -------- --------
159.8 (30.3) 129.5 161.2 (23.7) 137.5 (5.8)%
-------- -------- -------- -------- ------- --------
INCOME BEFORE TAXES
AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 20.1 583.1 603.1 468.5 167.6 636.1 (5.2)%
% of sales 0.3% 7.8% 6.3% 8.5%
Income taxes 66.7 128.4 195.1 157.0 55.9 212.9
Effective rate 331.8% 32.3% 33.5% 33.5%
-------- -------- -------- -------- ------- --------
INCOME BEFORE
CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (46.6) 454.7 408.0 311.5 111.7 423.2
AS REPORTED Twelve Months Ended December 31,
-------------------------------------------------------------------------------------
2003 2002
------------------------------------- ----------------------------------
Charges Excl. As Charges Excl.
As Reported (1) Charges Reported (2) Charges % Change
----------- -------- -------- ---------- -------- --------- --------
% of sales (0.6)% 5.3% 4.2% 5.7%
-------- -------- -------- -------- ------- --------
Cumulative effect of
accounting change - - - $ (514.9) 514.9 -
NET INCOME $ (46.6) $ 454.7 $ 408.0 $ (203.4) $ 626.6 $ 423.2 (3.6)%
======= ======== ======== ======== ======= ========
% of sales (0.6)% 5.3% (2.7)% 5.7%
EARNINGS PER SHARE BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE
Basic $ (0.17) $ 1.66 $ 1.49 $ 1.17 $ 0.42 $ 1.58 (6.1)%
Diluted $ (0.17) $ 1.66 $ 1.49 $ 1.16 $ 0.42 $ 1.58 (5.8)%
EARNINGS (LOSS) PER SHARE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE:
Basic $ - $ - $ - $ (1.93) $ 1.93 $ - NA
Diluted $ - $ - $ - $ (1.92) $ 1.92 $ - NA
EARNINGS (LOSS) PER SHARE
Basic $ (0.17) $ 1.66 $ 1.49 $ (0.76) $ 2.35 $ 1.58 (6.1)%
Diluted $ (0.17) $ 1.66 $ 1.49 $ (0.76) $ 2.34 $ 1.58 (5.8)%
Average shares outstanding
Basic 274.1 274.1 274.1 267.1 267.1 267.1 2.6%
Diluted 274.1 274.1 274.1 268.0 268.0 268.0 2.4%
(1) Charges excluded from "as reported" results for 2003 are restructuring, acquisition or divestiture related
charges. These charges consist of $15.1 million in restructuring related tcosts associated with product line
exits (shown in costs of products sold), $3.3 million of restructuring related costs to relocation of property
and equipment (shown in selling, general and administrative expenses), $245.0 million of restructuring costs
related to exiting certain facilities (shown in restructuring costs), $289.4 million in impairment charges
related to non-core businesses targeted for sale, $30.3 million, which is primarily the loss on the sale of
the Cosmolab division (shown in other).
(2) Charges excluded from "as reported" results for 2002 are restructuring or acquisition related charges and the
cumulative effect of an accounting change related to the adoption of SFAS No. 142. These charges consist of
$13.8 million in restructuring related costs for product line exits (shown in costs of products sold), $7.4
million of acquisition related charges (shown in selling, general and administrative expenses), $122.7 million
of restructuring charges related to exiting certain facilities (shown in restructuring costs), other charges
of $23.7 million, primarily acquisition related transaction costs (shown in other) and $514.9 million of
charges related to the writedown of impaired goodwill in connection with the adoption of SFAS No. 142.
Newell Rubbermaid Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
December 31, December 31,
2003 2002
Assets: ------------ ------------
Cash and cash equivalents $ 144.4 $ 55.1
Accounts receivable, net 1,442.6 1,377.7
Inventories, net 1,066.3 1,196.2
Deferred income taxes 152.7 213.5
Prepaid expenses and other 194.2 237.5
--------- ----------
Total Current Assets 3,000.2 3,080.0
Other assets 211.7 302.2
Property, Plant and Equipment, net 1,761.1 1,812.8
Goodwill, net 1,989.0 1,847.3
Deferred income taxes 68.1 -
Other intangibles, net 450.6 362.1
--------- ----------
Total Assets $ 7,480.7 $ 7,404.4
========= ==========
Liabilities and Stockholders' Equity:
Notes payable $ 21.9 $ 25.2
Accounts payable 777.4 686.6
Accrued compensation 131.1 153.5
Other accrued liabilities 996.3 1,165.4
Income taxes 81.8 159.7
Current portion of long-term debt 13.5 424.0
--------- ----------
Total Current Liabilities 2,022.0 2,614.4
Long-term debt 2,868.6 2,372.1
Other long-term liabilities 572.1 348.4
Deferred income taxes and other 1.7 6.0
Stockholders' Equity 2,016.3 2,063.5
--------- ----------
Total Liabilities and Stockholders' Equity $ 7,480.7 $ 7,404.4
========= ==========
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(in millions)
For The Twelve Months Ended December 31,
2003 2002
------ ------
Operating Activities:
Net income (loss) $ (46.6) $(203.4)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization 278.2 280.7
Non-cash restructuring charges 138.3 74.9
Deferred taxes (11.5) 48.3
Cumulative effect of change in accounting - 514.9
Loss on Sale of Business 29.7 -
Non-cash impairment charge 289.4
Other 26.1 9.8
Changes in current accounts, excluding
the effects of acquisitions:
Accounts receivable 33.4 2.8
Inventories 179.4 12.9
Other current assets 32.8 (42.1)
Accounts payable 62.0 136.0
Accrued liabilities and other (238.1) 34.1
-------- -------
Net cash provided by operating activities $ 773.2 $ 868.9
Investing activities:
Acquisitions, net $ (460.0) $(242.2)
Expenditures for property, plant and equipment (300.0) (252.1)
Disposals of non-current assets and other 43.9 7.8
-------- -------
Net cash used in investing activities $ (716.1) $(486.5)
Financing Activities:
Proceeds from issuance of debt $1,044.0 $ 772.0
Proceeds from issuance of stock 200.1 -
Payments on notes payable and long-term debt (989.6) (901.5)
Cash dividends (230.9) (224.4)
Proceeds from exercised stock options and other 7.8 19.0
-------- -------
Net cash provided by (used in) financing activities $ 31.4 (334.9)
Exchange rate effect on cash $0.8 $ 0.8
Increase (decrease) in cash and cash equivalents 89.3 48.3
Cash and cash equivalents at beginning of year 55.1 6.8
-------- -------
Cash and cash equivalents at end of period $ 144.4 $ 55.1
======== =======
NEWELL RUBBERMAID INC.
CACULATION OF FREE CASH FLOW (1)
For The Three Months Ended December 31,
2003 2002
FREE CASH FLOW (IN MILLIONS): ---- ----
Net cash provided by Operating Activities $ 352.8 $ 299.7
Expenditures for Property, Plant & Equipment (52.9) (66.9)
Cash Dividends (57.8) (56.2)
---------- ----------
Free Cash Flow $ 242.1 $ 176.6
========== ==========
For The Twelve Months Ended December 30,
2003 2002
FREE CASH FLOW (IN MILLIONS): ---- ----
Net cash provided by Operating Activities $ 773.2 $ 868.9
Expenditures for Property, Plan & Equipment (300.0) (252.1)
Cash Dividends (230.9) (224.4)
---------- ----------
Free Cash Flow $ 242.3 $ 392.4
========== ==========
(1) Free cash flow is defined as cash flows provided by operating activities less cash expenditures for property,
plant and equipment and cash dividends.
NEWELL RUBBERMAID INC. FINANCIAL WORKSHEET
2003 2002
------------------------------------- -------------------------------------
Excluding Charges Excluding Charges
Reconciliation (1) Reconciliation (1) Year-over-year changes
---------------------- ---------------------- ---------------------------------
Re- Ex- Ex Opera- Opera- Ex- Ex Opera- Net Sales Operating Income
Net ported cluded Charges ting Net ting cluded Charges ting --------------- ----------------
Sales OI Charges OI Margin Sales OI charges OI Margin $ % $ %
----- ------ ------- ------- ------ ----- ------ ------- ------- ------ ------- ------ ------ -------
Q1:
Rubbermaid $ 718.0 $ 67.4 $ 0.5 $ 67.9 9.5% $ 710.1 $ 61.0 $ 5.0 $ 66.0 9.3% $ 7.9 1.1% $ 1.9 2.9%
Sharpie 294.4 29.8 1.1 30.9 10.5% 301.9 25.8 2.5 28.3 9.4% (7.5) (2.5)% 2.6 9.2%
Irwin 482.1 39.6 2.7 42.3 8.8% 331.1 20.0 2.4 22.4 6.8% 151.0 45.6% 19.9 88.8%
Calphalon Home 241.9 11.2 0.1 11.3 4.7% 253.9 20.6 0.1 20.7 8.2% (12.0) (4.7)% (9.4) (45.4)%
Restructuring
Costs (59.7) 59.7 (9.7) 9.7 -
Corporate (7.2) - (7.2) (7.5) - (7.5) 0.3
-------- ------ ----- ----- -------- ------ ----- ------ ------ ------ -----
Total $1,736.4 $ 81.1 $64.1 145.2 8.4% $1,597.0 $110.2 $19.7 $129.9 8.1% $139.4 8.7% $15.3 11.8%
======== ====== ===== ===== ======== ====== ===== ====== ====== =====
Core businesses 1,573.4 66.2 64.1 130.3 8.3% 1,586.7 111.5 $19.7 $131.2 8.3% (13.3) (0.8)% (0.9) (0.7)%
Acquisition/
Divestitures 163.0 14.9 - 14.9 10.3 (1.3) - (1.3) 152.7 16.2
-------- ------ ----- ----- -------- ------ ----- ------ ------ ------ ----- ------
Total $1,736.4 $ 81.1 $64.1 $145.2 8.4% $1,597.0 $110.2 $19.7 $129.9 8.1% $139.4 8.7% $15.3 11.8%
======== ====== ===== ===== ======== ====== ===== ====== ====== ====== ===== ======
2003 2002
------------------------------------- -------------------------------------
Excluding Charges Excluding Charges
Reconciliation (1) Reconciliation (1) Year-over-year changes
---------------------- ---------------------- ---------------------------------
Re- Ex- Ex Opera- Opera- Ex- Ex Opera- Net Sales Operating Income
Net ported cluded Charges ting Net ting cluded Charges ting --------------- ----------------
Sales OI Charges OI Margin Sales OI charges OI Margin $ % $ %
----- ------ ------- ------- ------ ----- ------ ------- ------- ------ ------- ------ ------ -------
Q2:
Rubbermaid $ 751.2 $ 39.9 $ 0.3 $40.2 5.4% $ 738.3 $51.8 $0.7 $ 52.5 7.1% $ 12.9 1.8% $(12.3) (23.4)%
Sharpie 485.2 107.6 0.1 107.7 22.2% 464.0 96.5 0.0 96.5 20.8% 21.2 4.6% 11.2 11.6%
Irwin 520.5 55.6 1.1 56.7 10.9% 447.2 41.2 0.4 41.6 9.3% 73.3 16.4% 15.1 36.3%
Calphalon Home 219.2 1.6 0.8 2.4 1.1% 245.5 8.8 (0.3) 8.5 3.5% (26.3) (10.7)% (6.1) (71.8)%
Restructuring
Costs (57.9) 57.9 - (8.9) 8.9 - -
Corporate (6.3) - (6.3) (7.7) - (7.7) 1.4
-------- ------ ----- ------ -------- ------ ----- ------ ------ ------ ----- ------
Total $1,976.1 $140.5 $60.2 200.7 10.2% $1,895.0 $181.7 $9.7 $191.4 10.1% $ 81.1 4.3% $9.3 4.9%
======== ====== ===== ====== ======== ====== ===== ====== ====== ====== ===== ======
Core businesses $1,888.7 $124.5 $60.2 $184.7 9.8% $1,882.9 $180.9 $9.7 $190.6 10.1% 5.8 0.3% (5.9) (3.1)%
Acquisitions/
Divestitures 87.4 16.0 - 16.0 12.1 0.8 - 0.8 75.3 15.2
-------- ------ ----- ------ -------- ------ ----- ------ ------ ------ ----- ------
Total $1,976.1 $140.5 $60.2 $200.7 10.2% $1,895.0 $181.7 $9.7 $191.4 10.1% $ 81.1 4.3% $ 9.3 4.9%
======== ====== ===== ====== ======== ====== ===== ====== ====== ====== ===== ======
______________
(1) Excludes charges for restructuring and acquisition related charges, the loss on the sale of Cosmolab, and in the first
quarter of 2002, the adoption of SFAS No. 142. See the reconciliation of these charges to "as reported" earnings on the
Statements of Operations - Excluding Charges.
NEWELL RUBBERMAID INC. FINANCIAL WORKSHEET
2003 2002
------------------------------------- -------------------------------------
Excluding Charges Excluding Charges
Reconciliation (1) Reconciliation (1) Year-over-year changes
---------------------- ---------------------- ---------------------------------
Re- Ex- Ex Opera- Opera- Ex- Ex Opera- Net Sales Operating Income
Net ported cluded Charges ting Net ting cluded Charges ting --------------- ----------------
Sales OI Charges OI Margin Sales OI charges OI Margin $ % $ %
----- ------ ------- ------- ------ ----- ------ ------- ------- ------ ------- ------ ------ -------
Q3
Rubbermaid $767.8 $58.8 $0.6 $59.4 7.7% $ 759.3 $ 77.6 $ 1.5 $ 79.1 10.4% $ 8.5 1.1% $(19.7) (24.9)%
Sharpie 389.1 62.8 - 62.8 16.1% 412.1 74.4 1.0 75.4 18.3% (23.0) (5.6)% (12.6) (16.7)%
Irwin 521.2 71.0 0.6 71.6 13.7% 479.3 32.8 5.1 37.9 7.9% 41.9 8.7% 33.7 88.9%
Calphalon Home 266.6 12.2 0.9 13.1 4.9% 297.6 31.3 0.7 32.0 10.8% (31.0) (10.4)% (18.9) (59.1)%
Restructuring
Costs (48.4) 48.4 (51.2) 51.2 -
Corporate (10.9) - (10.9) (7.5) - (7.5) (3.4)
-------- ------ ----- ------ -------- ------ ----- ------ ------ ------ ------ ------
Total $1,944.7 $145.5 $50.5 $196.0 10.1% $1,948.3 $157.4 $59.5 216.9 11.1% $(3.6) (0.2)% $(20.9) (9.6)%
======== ====== ===== ====== ======== ====== ===== ====== ====== ====== ====== ======
Core businesses $1,895.1 $130.2 $50.5 $180.7 9.5% $1,937.2 $158.4 $59.5 $217.9 11.2% (42.1) (2.2)% (37.2) (16.7)%
Acquisitions/
Divestitures 49.6 15.3 - 15.3 11.1 (1.0) - (1.0) 38.5 16.3
-------- ------ ----- ------ -------- ------ ----- ------ ------ ------ ----- ------
Total $1,944.7 $145.5 $50.5 $196.0 10.1% $1,948.3 $157.4 $59.5 $216.9 11.1% $(3.6) (0.2)% $(20.9) (9.6)%
======== ====== ===== ====== ======== ====== ===== ====== ====== ====== ====== ======
2003 2002
------------------------------------- -------------------------------------
Excluding Charges Excluding Charges
Reconciliation (1) Reconciliation (1) Year-over-year changes
---------------------- ---------------------- ---------------------------------
Re- Ex- Ex Opera- Opera- Ex- Ex Opera- Net Sales Operating Income
Net ported cluded Charges ting Net ting cluded Charges ting --------------- ----------------
Sales OI Charges OI Margin Sales OI charges OI Margin $ % $ %
----- ------ ------- ------- ------ ----- ------ ------- ------- ------ ------- ------ ------ -------
Q4:
Rubbermaid $786.4 $30.2 $ - $ 30.2 3.8% $738.8 $ 69.8 $(0.4) $69.4 9.4% $47.6 6.4% $(39.2) (56.5)%
Sharpie 404.2 75.9 1.1 77.0 19.0% 415.0 81.2 (0.3) 80.9 19.5% (10.8) (2.6)% (3.9) (4.8)%
Irwin 567.7 59.5 5.9 65.4 11.5% 469.7 33.3 2.1 35.4 7.5% 98.0 20.9% 30.0 84.7%
Calphalon Home 334.5 21.6 2.5 24.1 7.2% 390.1 57.4 0.6 58.0 14.9% (55.6) (14.2)% (33.9) (58.4)%
Restructuring
Costs (79.0) 79.0 (52.9) 52.9 -
Corporate (295.3) 289.5 (5.8) (8.4) - (8.4) 2.6 (31.0)%
-------- ------- ------ ------ -------- ------ ----- ------ ------ ------ ----- ------
Total $2,092.8 $(187.1) $378.0 $190.9 9.1% $2,013.6 $180.4 $54.9 $235.3 11.7% $79.2 3.9% $(44.4) (18.9)%
======== ======= ====== ====== ======== ====== ===== ====== ====== ====== ====== ======
Core businesses $2,043.6 $(201.9) $378.0 $176.1 8.6% $1,997.3 $178.6 $54.9 $233.5 11.7% $46.3 2.3% $(57.4) (24.6)%
Acquisitions/
Divestitures 49.2 14.8 - 14.8 16.3 1.8 - 1.8 32.9 13.0
-------- ------- ------ ------ -------- ------ ----- ------ ------ ------ ----- ------
Total $2,092.8 $(187.1) $378.0 $190.9 9.1% $2,013.6 $180.4 $54.9 $235.3 11.7% $79.2 3.9% $(44.4) (18.9)%
======== ======= ====== ====== ======== ====== ===== ====== ====== ====== ====== =======
______________
(1) Excludes charges for restructuring and acquisition related charges, the loss on the sale of Cosmolab, and in the first
quarter of 2002, the adoption of SFAS No. 142. See the reconciliation of these charges to "as reported" earnings on the
Statements of Operations - Excluding Charges.
2003 2002
------------------------------------- -------------------------------------
Excluding Charges Excluding Charges
Reconciliation (1) Reconciliation (1) Year-over-year changes
---------------------- ---------------------- ---------------------------------
Re- Ex- Ex Opera- Opera- Ex- Ex Opera- Net Sales Operating Income
Net ported cluded Charges ting Net ting cluded Charges ting --------------- ----------------
Sales OI Charges OI Margin Sales OI charges OI Margin $ % $ %
----- ------ ------- ------- ------ ----- ------ ------- ------- ------ ------- ------ ------ -------
YTD:
Rubbermaid $3,023.4 $196.3 $ 1.4 $197.7 6.5% $2,946.5 $260.2 $6.9 $267.1 9.1% $ 76.9 1.3% $(69.4) (26.0)%
Sharpie 1,572.8 276.0 2.3 278.4 17.7% 1,593.0 277.9 3.2 281.1 17.6% $ (20.1) (0.8)% $ (2.7) (1.0)%
Irwin 2,091.5 225.7 10.3 236.0 11.3% 1,727.3 127.3 10.0 137.3 7.9% $ 364.2 21.2% $ 98.7 71.9%
Calphalon Home 1,062.3 46.6 4.3 50.8 4.8% 1,187.1 118.1 1.1 119.2 10.0% $(124.9) (8.7)% $(68.4) (57.4)%
Restructuring
Costs - (245.0) 245.0 - - (122.7) 122.7 - $ - $ -
Corporate - (319.7) 289.5 (30.2) - (31.1) - (31.1) $ - $ 0.9
-------- ------ ------ ------ -------- ------ ----- ------ ------ ------ ------ ------
Total $7,750.0 $179.9 $552.8 $732.7 9.5% $7,453.9 $629.7 $143.9 $773.6 10.4% $ 296.1 4.0% $(40.9) (5.3)%
======== ====== ====== ====== ======== ====== ===== ====== ====== ====== ====== ======
Core businesses $7,400.8 $118.9 $552.8 $671.7 9.1% $7,404.1 $629.4 143.9 $773.3 10.4% $ (3.3) (0.0)% $(101.6) (13.1)%
Acquisitions/
Divestitures 349.2 61.0 - 61.0 49.8 0.3 - 0.3 299.4 - 60.7 -
-------- ------ ------ ------ -------- ------ ----- ------ ------ ------ ------ ------
Total $7,750.0 $179.9 $552.8 $732.7 9.5% $7,453.9 $629.7 $143.9 $773.6 10.4% $ 296.1 4.0% $(40.9) (5.3)%
======== ====== ====== ====== ======== ====== ===== ====== ====== ====== ====== ======
______________
(1) Excludes charges for restructuring and acquisition related charges, the loss on the sale of Cosmolab, and in the first
quarter of 2002, the adoption of SFAS No. 142. See the reconciliation of these charges to "as reported" earnings on the
Statements of Operations - Excluding Charges.
Newell Rubbermaid
Sales and Operating Income
Three Months Ended December 31, 2003
Currency Analysis
Year-over-year
2003 2002 Increase (Decrease)
--------------------------------- -------- ----------------------
By Segment
Sales as Currency Adjusted Sales as Excluding Including Currency
Reported Impact Sales Reported Currency Currency Impact
-------- -------- -------- -------- --------- --------- --------
Rubbermaid $ 786.4 $(20.3) $ 766.1 $ 738.8 3.7% 6.4% 2.6%
Sharpie 404.2 (19.7) 384.5 415.0 (7.3)% (2.6)% 5.1%
Irwin 567.7 (25.3) 542.4 469.7 15.5% 20.9% 4.7%
Calphalon Home 334.5 (9.1) 325.4 390.1 (16.6)% (14.2)% 2.8%
-------- ------- -------- --------
Total Company $2,092.8 $(74.4) $2,018.4 $2,013.6 0.2% 3.9% 3.7%
======== ======= ======== ========
By Geography
United States $1,501.3 $ - $1,501.3 $1,472.4 2.0% 2.0% 0.0%
Canada 105.4 (17.5) 87.9 84.0 4.6% 25.5% 19.9%
-------- ------- -------- --------
North America 1,606.7 (17.5) 1,589.2 1,556.4 2.1% 3.2% 1.1%
Europe 375.8 (48.0) 327.8 363.7 (9.9)% 3.3% 14.6%
Central & South America 61.7 (2.3) 59.4 57.2 3.8% 7.9% 3.9%
All Other 48.7 (6.7) 42.0 36.3 15.7% 34.2% 16.0%
-------- ------- -------- --------
Total Company $2,092.9 $(74.5) $2,018.4 $2,013.6 0.2% 3.9% 3.7%
======== ======= ======== ========
Newell Rubbermaid
Sales and Operating Income
Twelve Months Ended December 31, 2003
Currency Analysis
Year-over-year
2003 2002 Increase (Decrease)
--------------------------------- -------- ----------------------
By Segment
Sales as Currency Adjusted Sales as Excluding Including Currency
Reported Impact Sales Reported Currency Currency Impact
-------- -------- -------- -------- --------- --------- --------
Rubbermaid $ 3,023.4 $ (61.0) $ 2,962.4 $ 2,946.5 0.5% 2.6% 2.1%
Sharpie 1,572.8 (51.1) 1,521.7 1,593.0 (4.5)% (1.3)% 3.4%
Irwin 2,091.5 (88.6) 2,002.9 1,727.3 16.0% 21.1% 4.4%
Calphalon Home 1,062.3 (30.4) 1,031.9 1,187.1 (13.1)% (10.5)% 2.9%
--------- --------- --------- ---------
Total Company $ 7,750.0 $ (231.1) $ 7,518.9 $ 7,453.9 0.9% 4.0% 3.1%
========= ========= ========= =========
By Geography
United States $ 5,505.0 $ - $ 5,505.0 $ 5,454.2 0.9% 0.9% 0.0%
Canada 373.8 (41.7) 332.1 312.5 6.3% 19.6% 12.6%
--------- --------- --------- ---------
North America 5,878.8 (41.7) 5,837.1 5,766.7 1.2% 1.9% 0.7%
Europe 1,466.0 (197.5) 1,268.5 1,331.3 (4.7)% 10.1% 15.6%
Central & South America 248.8 24.8 273.6 247.2 10.7% 0.6% (9.1)%
All Other 156.4 (16.7) 139.7 108.7 28.5% 43.9% 12.0%
--------- --------- --------- ---------
Total Company $ 7,750.0 $ (231.1) $ 7,518.9 $ 7,453.9 0.9% 4.0% 3.1%
========= ========= ========= =========