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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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): April 29, 2003
NEWELL RUBBERMAID INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-9608 36-3514169
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(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
Deerfield Corporate Centre One
13010 Morris Road, Suite 100
Alpharetta, Georgia 30004
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(Address of Principal Executive (Zip Code)
Offices)
Registrant's telephone number, including area code: (770) 670-2232
29 East Stephenson Street, Freeport, Illinois 61032-0943
(Former name or former address, if changed since last report)
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits.
Exhibit
Number Description
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99.1 Press Release, dated April 29, 2003, issued
by Newell Rubbermaid Inc.
ITEM 9. REGULATION FD DISCLOSURE (ALSO BEING PROVIDED UNDER NEW
ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION).
The information in this Report, including the Exhibit attached hereto,
is furnished pursuant to Item 9 and 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 April 29, 2003, Newell Rubbermaid Inc. (the "Company") reported its
results for the first fiscal quarter ended March 31, 2003. The
Company's press release, dated April 29, 2003, 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
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stockholders and the investment community and in its internal
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, excluding restructuring and other charges, as a
percentage of sales. This measure is also useful to investors
because it provides information with respect to operating income
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 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.
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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: April 29, 2003 By: /s/ Andrea L. Horne
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Andrea L. Horne
Vice President - Corporate
Development and Corporate Secretary
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EXHIBIT INDEX
Exhibit No. Description
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99.1 Press Release, dated April 29, 2003, issued by
Newell Rubbermaid Inc.
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EXHIBIT 99.1
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PRESS RELEASE
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NEWELL RUBBERMAID REPORTS RECORD REVENUES OF $1.7 BILLION,
UP 9% FROM 2002
EARNINGS IN LINE WITH CONSENSUS
ATLANTA, April 29 (PRNewswire) -- Newell Rubbermaid Inc. (NYSE: NWL)
today announced its first quarter 2003 results, reporting record net
sales of $1,736.4 million, an increase of 8.7% compared to the first
quarter 2002.
FIRST QUARTER RESULTS
Net income in the quarter was $16.0 million, or $0.06 per share in
2003, compared to a net loss of $464.0 million, or $1.73 loss per
share in 2002. Excluding restructuring, acquisition and divestiture
related charges and the impact of the company's adoption of SFAS No.
142 in the first quarter of 2002, net income increased 15% to $73.5
million in 2003, versus $63.9 million in 2002. Diluted earnings per
share, calculated on the same basis, increased 12% to $0.27 in 2003,
versus $0.24 in 2002. A reconciliation of the results "as reported"
to results "excluding charges" is attached to this press release.
"We are encouraged by the overall progress made through our
transformational strategies. We continue to build momentum in new
product development and marketing initiatives, and acquisition
integration is ahead of plan for our Lenox and Irwin hand tools and
power tool accessories businesses. We remain committed to strategic
investment in our company to achieve our long term financial goals,"
said Joseph Galli, Newell Rubbermaid's chief executive officer.
Galli added: "Additionally, we continue to drive productivity gains
across our businesses. These cost savings enable us to invest in our
product categories and brands that have the most attractive growth
prospects. During the quarter, we delivered $24 million of
productivity improvements, despite some raw material price increases,
and continued on our path of pruning non-strategic businesses by
divesting the Cosmolab cosmetics business. I am confident we remain
on-track in reaching our current year earnings estimate and our long-
term financial goals to maximize value for our shareholders."
Internal sales, which exclude the impact of material acquisitions and
divestitures made in the past year, declined 0.8%. The planned exit
from high-risk customers reduced internal sales by 2.7% in the
quarter, and foreign currency translation favorably impacted sales by
2.8%. Strong power brand sales were reported in the quarter from the
Calphalon{R} brand (up 27%), the Sharpie{R} brand (up 18%) and the
Rubbermaid{R} brand (up 8%) principally from additional retail shelf
space as a result of new product introductions and account review wins
over the past year. The Levolor window furnishings and Burnes picture
frame businesses reported double-digit sales declines due to planned
exits from low margin product lines. Additionally, Burnes sales were
particularly impacted by the exit from high-risk customers.
The company added that its continued focus on productivity measures
and the 2003 acquisition of American Saw contributed to the expansion
of gross margins by 44 basis points to 26.7% in 2003 versus 26.2% in
2002. Excluding charges, gross margins improved 26 basis points to
26.9% in 2003 versus 26.7% in 2002.
Operating income decreased to $81.1, or 4.7% of sales, in 2003 versus
$110.2 million, or 6.9% of sales, in 2002 due primarily to increased
restructuring charges. Excluding charges, operating income increased
12% to $145.2 million, or 8.4% of sales, versus $129.9 million, or
8.1% of sales, in 2002.
As part of its previously announced restructuring plan, the company
recorded first quarter pre-tax restructuring charges of $59.7 million
and other restructuring and related charges of $4.4 million. During
the quarter the company exited 5 facilities in connection with the
movement of production to lower cost facilities and countries, and to
date 62 facilities have been or are in process of being exited under
the plan. The company also recorded a one-time non-cash loss of $21.2
million, pre-tax, in 2003 as a result of its divestiture of its
Cosmolab business.
The company consumed free cash flow of $110 million versus generating
$31 million in the first quarter 2002. The company defines free cash
flow as cash generated from operations, net of capital expenditures
and dividends. The company pointed to increased strategic investments
in capital for new product development and productivity initiatives,
increased cash restructuring charges and increased inventory levels as
the primary factors for the decrease in free cash flow. The increased
inventory levels were the result of increased safety stock levels
related to restructuring programs and new product launches, and
softness in sales at our Burnes picture frame division. A
reconciliation of free cash flow to cash flow provided by operating
activities is attached to this press release.
OTHER ITEMS OF NOTE IN THE QUARTER
* The company acquired American Saw & Mfg. Company, a leading
manufacturer of linear edge power tool accessories, hand
tools and band saw blades marketed under the Lenox{R} brand.
The combination of American Saw with the company's American
Tool business strengthens and enhances the company's product
lines and customer base in the estimated $12 billion global
power tool accessories and hand tools market. The
acquisition integration continues on schedule as evidenced
by strong sales performances from both businesses.
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* In January 2003, the company appointed Dr. Thomas E. Clarke,
president new business ventures for Nike Inc., to its board
of directors.
* The company announced it selected Atlanta, Georgia as the
location for its new corporate headquarters and training
center. The new headquarters will be centrally located to
several of the company's strategic customers, and the
training center will be an important element of the
company's vision to promote a collaborative culture and its
commitment to excellence in training and leadership
development.
2003 OUTLOOK
The company reiterated that it expects full year 2003 internal sales
growth of 2% - 4% and diluted earnings per share of $1.77 - $1.87,
excluding restructuring charges of $125 - $150 million and other non-
recurring charges related to product line exit costs, acquisition and
divestiture related charges of $40 - $50 million.
For the second quarter 2003, the company expects diluted earnings per
share of $0.40 - $0.44, excluding restructuring charges of $40 - $60
million, and other non-recurring charges related to product line exit
costs and acquisition related charges of $4 - $6 million.
A reconciliation of the 2003 earnings outlook is as follows: