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): August 2, 2019

NEWELL BRANDS INC.

(Exact name of registrant as specified in its charter)

221 River Street

Hoboken, New Jersey 07030

(Address of principal executive offices including zip code)

(201) 610-6600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act: None

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

On August 2, 2019, Newell Brands Inc. (the “Company”) issued a press release to report the Company’s earnings for the fiscal quarter ended June 30, 2019, which is attached to this report as Exhibit 99.1.

The information in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, regardless of any general incorporation language in such filing.

(d) Exhibits

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

3

Exhibit 99.1

Newell Brands Announces Second Quarter 2019 Results

Delivers Significant Improvements in Operating Margin and Operating Cash Flow

Raises Guidance for 2019 Operating Cash Flow

Announces Intention to Retain Rubbermaid Commercial Products Business

HOBOKEN, NJ – August 2, 2019 – Newell Brands (NASDAQ: NWL) today announced its second quarter 2019 financial results.

“The financial results we announced this morning represent another quarter of progress, with disciplined cost management and focused execution behind working capital initiatives driving better than expected margin and cash flow progression in the second quarter,” said Chris Peterson, Newell Brands Interim Chief Executive Officer and Chief Financial Officer. “Encouraging first half results and the green shoots of progress we are driving across the business give us the confidence to reiterate our outlook for full year core sales, operating margin and earnings per share and to raise our full year outlook for operating cash flow to between $600 and $800 million. While still early in the organization’s turnaround, we believe our decisive and strategic actions to strengthen our performance will drive further improvement going forward, as we work to transform Newell Brands into a leading next-generation consumer products company.”

Second Quarter 2019 Executive Summary

Second Quarter 2019 Operating Results

Net sales were $2.1 billion, a 3.9 percent decline compared to the prior year period, attributable to the impact of foreign exchange and a 1.1 percent decline in core sales.

Reported gross margin was 35.3 percent compared with 35.2 percent in the prior year period, as pricing, productivity and positive mix offset headwinds from foreign exchange, tariffs and inflation. Normalized gross margin was 35.6 percent compared with 35.1 percent in the prior year period.

Reported operating income was $178 million compared with $83.9 million in the prior year period, due to gross margin expansion and a reduction in overhead costs. Normalized operating income was $240 million compared with $214 million in the prior year period. Reported operating margin was 8.4 percent compared with 3.8 percent in the prior year. Normalized operating margin was 11.3 percent compared to 9.7 percent in the prior year period.

Reported tax expense was $16.7 million, or 16.8 percent, compared with $53.0 million in the prior year period. Normalized tax expense was $41.1 million, or 25.4 percent, compared with a benefit of $0.7 million in the prior year period.    

The company reported net income of $89.8 million compared with $132 million in the prior year period. Reported diluted earnings per share for the total company were $0.21 compared with $0.27 in the prior year period.

Normalized net income for the total company was $190 million, or $0.45 diluted earnings per share, compared with $379 million, or $0.78 diluted earnings per share, in the prior year period.

Operating cash flow was $191 million compared with $11.2 million in the prior year period, primarily enabled by strategic actions taken to improve cash conversion cycles on receivables and payables.

An explanation of non-GAAP measures and a reconciliation of these non-GAAP results to comparable GAAP measures is included in the tables attached to this release.

Second Quarter 2019 Operating Segment Results

The Learning & Development segment generated net sales of $849 million compared with $839 million in the prior year period, as core sales growth more than offset the headwind from foreign exchange. Core sales increased 3.5 percent, driven by increases in both Baby and Writing. Reported operating income was $217 million compared with $196 million in the prior year period. Reported operating margin was 25.6 percent compared with 23.3 percent in the prior year period. Normalized operating income was $221 million versus $207 million in the year-ago period. Normalized operating margin was 26.1 percent compared with 24.7 percent in the prior year period.

The Food & Appliances segment generated net sales of $562 million compared with $620 million in the prior year period, due primarily to the impact of unfavorable foreign exchange and a core sales decrease of 7.1 percent. The core sales decline largely reflected a timing shift in orders from the second quarter to the first quarter associated with an SAP implementation in Fresh Preserving, and continued challenges in the Appliances business. Reported operating income was $33.5 million compared with $39.5 million in the prior year period. Reported operating margin was 6.0 percent compared with 6.4 percent in the prior year period. Normalized operating income was $43.1 million versus $47.6 million in the prior year period. Normalized operating margin was 7.7 percent, the same as in the prior year period.

The Home & Outdoor Living segment generated net sales of $705 million compared with $742 million in the prior year period, with the change attributed to the impact of unfavorable foreign exchange, the exit of 72 underperforming Yankee Candle retail stores in the first half of 2019 and a core sales decline of 1.1 percent. The Home Fragrance and Connected Home and Security divisions posted positive core sales, which were offset by lower core sales in Outdoor and Recreation largely due to the impact of lost distribution in the prior year. Reported operating income was $19.2 million compared with operating income of $9.4 million in the prior year period. Reported operating margin was 2.7 percent compared with 1.3 percent in the prior year period. Normalized operating income was $39.7 million compared with $48.4 million in the prior year period. Normalized operating margin was 5.6 percent compared with 6.5 percent in the prior year period.

Strategic Changes to Continuing Portfolio

The company announced its intent to retain the Rubbermaid Commercial Products business, including the related Rubbermaid Outdoor, Closet, Refuse and Garage business lines, which has been classified as held for sale and discontinued operations. The decision to keep the business was based on the strength of the Rubbermaid Commercial Products brand, its competitive position in a large and growing category, and its track record of strong cash flow generation, sales growth and strong margins that will further enhance the value creation opportunity for Newell Brands. Beginning in the third quarter, the financial results of the Rubbermaid Commercial Products business will be reflected in continuing operations, rather than recorded in discontinued operations. The retention of Rubbermaid Commercial Products will be accretive to operating margins, normalized earnings per share and operating cash flow in 2020 and future years.

The remaining assets held for sale, which include U.S. Playing Cards, Mapa/Spontex and Quickie (a cleaning tools business that was formerly part of the same disposal group as the Rubbermaid Commercial Products business) will continue to be reflected in discontinued operations. Divestitures of these businesses are expected to be completed by year-end 2019 and to generate between $675 and $775 million in after-tax proceeds. The company now expects to achieve a gross debt to EBITDA leverage ratio of less than 4.0x by the end of 2019, and approximately 3.5x by the end of 2020.

The company’s outlook for full year and third quarter net sales, core sales and normalized operating margin have been updated to reflect the inclusion of Rubbermaid Commercial Products as part of continuing operations beginning in the third quarter. In the interest of comparability, the company has provided an adjusted view of its 2018 and Q3 2018 normalized financial results as they would have appeared had Rubbermaid Commercial Products been part of continuing operations in that period. This adjusted information can be found in the appendix to this press release and in the Investors section of the company’s website, www.newellbrands.com. As a result of the move to continuing operations, the company will resume depreciation expense for the Rubbermaid Commercial Products business, with the annualized impact estimated at approximately $35 million. (Under GAAP, assets held for sale are not depreciated.) Since the company’s previous guidance assumed the Rubbermaid Commercial Products business would be divested at year-end 2019, the incremental depreciation expense is the only incremental impact on the outlook for full year normalized earnings per share; the outlook for operating cash flow is not impacted by this change.

Outlook for Full Year and Third Quarter 2019

The company updated its full year outlook and initiated its third quarter outlook as follows:

The net sales, core sales and normalized operating margin outlooks reflect expected results from continuing operations only. Normalized earnings per share and operating cash flow guidance reflects the total company outlook. Full year operating cash flow guidance assumes approximately $50 million in cash taxes and transaction costs related to divestitures and approximately $200 million of restructuring and related cash costs.

The company has presented forward-looking statements regarding core sales, normalized operating margin, normalized earnings per share and gross debt to EBITDA leverage ratio. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of forward-looking normalized earnings per share for the total company or normalized operating margin to their most directly comparable forward-looking GAAP financial measures because such information is not available and management cannot reliably predict all of the necessary components of such GAAP measures without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the company’s full-year 2019 financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others, changes in connection with quarter-end and year-end adjustments. Any variation between the company’s actual results and preliminary financial data set forth above may be material.

Conference Call

The company’s second quarter 2019 earnings conference call will be held today, August 2, 2019, at 8:30 a.m. ET. A link to the webcast is provided under Events & Presentations in the Investors section of Newell Brands’ website at www.newellbrands.com. A webcast replay will be made available in the Quarterly Earnings section of the company’s website.

Non-GAAP Financial Measures

This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the U.S. Securities and Exchange Commission and includes a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP.

The company uses certain non-GAAP financial measures that are included in this press release and the additional financial information both to explain its results to stockholders and the investment community and in the internal evaluation and management of its businesses. The company’s management believes that these non-GAAP financial measures and the information they provide are useful to investors since these measures (a) permit investors to view the company’s performance and liquidity using the same tools that management uses to evaluate the company’s past performance, reportable business segments, prospects for future performance, and liquidity, and (b) determine certain elements of management’s incentive compensation.

The company’s management believes that core sales provides a more complete understanding of underlying sales trends by providing sales on a consistent basis as it excludes the impacts of acquisitions, planned and completed divestitures, retail store openings and closings, certain market exits, and changes in foreign exchange from year-over-year comparisons. Core sales for the second quarter and projected full year core sales also exclude the impact of returns associated with an expected recall in the Outdoor & Recreation segment. The effect of changes in foreign exchange on 2019 reported sales is calculated by applying the prior year average monthly exchange rates to the current year local currency sales amounts (excluding acquisitions and divestitures), with the difference between the 2019 reported sales and the constant currency sales presented as the foreign exchange impact increase or decrease in core sales. The company’s management believes that “normalized” gross margin, “normalized” SG&A expense, “normalized” operating income, “normalized” operating margin, “normalized” net income, “normalized” diluted earnings per share, “normalized” interest and “normalized” tax rates, which exclude restructuring and restructuring-related expenses and one-time and other events such as costs related to the extinguishment of debt, certain tax benefits and charges, impairment charges, pension settlement charges, divestiture costs, costs related to the acquisition, integration and financing of acquired businesses, amortization of intangible assets associated with acquisitions, expenses related to certain product recalls and certain other items, are useful because they provide investors with a meaningful perspective on the current underlying performance of the company’s core ongoing operations. “Net debt” excludes the impact of cash and cash equivalents, and the company believes it is an important indicator of liquidity and measure of capital structure strategy.

The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting tax benefit, if any, is expected. In situations in which an item excluded from normalized results impacts income tax expense, the company uses a “with” and “without” approach to determine normalized income tax expense.

While the company believes these non-GAAP financial measures are useful in evaluating the company’s performance, this information should be considered as supplemental in nature and not as a substitute for or superior to the related financial information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures presented by other companies.

About Newell Brands

Newell Brands (NASDAQ: NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including Paper Mate^®, Sharpie^®, Dymo^®, EXPO^®, Parker^®, Elmer’s^®, Coleman^®, Marmot^®, Oster^®, Sunbeam^®, FoodSaver^®, Mr. Coffee^®, Rubbermaid Commercial Products^®, Graco^®, Baby Jogger^®, NUK^®, Calphalon^®, Rubbermaid^®, Contigo^®, First Alert^® and Yankee Candle^®. For hundreds of millions of consumers, Newell Brands makes life better every day, where they live, learn, work and play.

This press release and additional information about Newell Brands are available on the company’s website, www.newellbrands.com.

Caution Concerning Forward-Looking Statements

Some of the statements in this press release and its exhibits, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters, are forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements generally can be identified by the use of words and phrases, including, but not limited to, “intend,” “anticipate,” “believe,” “estimate,” “project,” “target,” “plan,” “expect,” “setting up,” beginning to,” “will,” “should,” “would,” “resume” or similar statements. We caution that forward-looking statements are not guarantees because there are inherent difficulties in predicting future results. In addition, there are no assurances that we will complete any or all of the potential transactions or other initiatives referenced above. Actual results may 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:

The information contained in this press release and the tables is as of the date indicated. The company assumes no obligation to update any forward-looking statements as a result of new information, future events or developments.

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