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): March 25, 2003
NEWELL RUBBERMAID INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 1-9608 36-3514169
-------- ------ ----------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
29 East Stephenson Street, Freeport, Illinois 61032-0943
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (815) 235-4171
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(c) Exhibits.
Exhibit
Number Description
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99.1 Summary Annual Report of Newell Rubbermaid Inc.
for the year ended December 31, 2002
ITEM 9. REGULATION FD DISCLOSURE
The Registrant has begun to distribute copies of its Summary Annual
Report for the year ended December 31, 2002. The Summary Annual
Report will be mailed to the Registrant's stockholders along with the
Registrant's 2003 Proxy Statement in connection with the Registrant's
annual meeting of stockholders to be held May 7, 2003. The proxy
statement will include the Registrant's audited financial statements
for fiscal year 2002, Management's Discussion and Analysis of Results
of Operations and Financial Condition and other related information.
A copy of the Summary Annual Report is attached hereto as Exhibit 99.1
and incorporated herein by reference.
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: March 25, 2003 By: /s/ Andrea L. Horne
------------------------------
Andrea L. Horne
Vice President - Corporate
Development and Corporate
Secretary
EXHIBIT INDEX
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Exhibit No. Description
----------- -----------
99.1 Summary Annual Report of Newell Rubbermaid Inc.
for the year ended December 31, 2002
EXHIBIT 99.1
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NEWELL RUBBERMAID 2002 ANNUAL REPORT
[Graphics of Newell Rubbermaid products omitted]
OUR 24 POWER BRANDS are valuable, pervasive, extendable brands that
touch every retail channel and every consumer's life.
Sharpie{R} [Logo]
Paper Mate{R} [Logo]
Calphalon{R} [Logo]
Vise-Grip{R} [Logo]
Irwin{R} [Logo]
StainSheild{TM} [Logo]
Blue Ice{R} [Logo]
Levolor{R} [Logo]
Shur-Line{R} [Logo]
TakeAlongs{R} [Logo]
Goody{R} [Logo]
Rubbermaid{R} [Logo]
Kirsch{R} [Logo]
Parker{R} [Logo]
Little Tikes{R} [Logo]
Waterman{R} [Logo]
Lenox{R} [Logo]
Brute{R} [Logo]
Graco{R} [Logo]
Marathon{R} [Logo]
BernzOmatic{R} [Logo]
Quick-Grip{R} [Logo]
Colorific{R} [Logo]
Roughneck{R} [Logo]
THIS ANNUAL REPORT SHOULD BE READ IN CONJUNCTION WITH NEWELL
RUBBERMAID'S PROXY STATEMENT, DATED MARCH 24, 2003, AND THE 2002 FORM
10-K. COPIES OF THE PROXY STATEMENT AND FORM 10-K MAY BE OBTAINED
ONLINE AT WWW.NEWELLRUBBERMAID.COM.
INTERNAL SALES GROWTH 3.3%
OPERATING INCOME 10.4%
WORKING CAPITAL 25.8%
Newell Rubbermaid is a global manufacturer and full-service marketer
of branded consumer products and their commercial extensions, serving
the needs of volume purchasers, including department stores, discount
stores and warehouse clubs, as well as home centers, hardware stores,
commercial distributors, office superstores and contract stationers.
We market a multi-product offering of branded consumer products,
backed by an obsession with customer service excellence and new
product development. Our current portfolio includes 24 power brands,
and we operate under four highly focused business groups: Rubbermaid,
Sharpie, Irwin and Calphalon.
Worldwide Sales % of Total
Power Brands (in millions) % Increase NWL Sales
------------ ------------- ---------- ----------
RUBBERMAID
This group is a world leader in indoor Rubbermaid{R} 2002 1.0% 34.8%
and outdoor organization, storage and StainShield{TM} $2,592.4 [Pie chart
cleaning products. This group also TakeAlongs{R} omitted]
includes juvenile products, such as Roughneck{R} 2001
swings, highchairs, strollers, car Brute{R} $2,565.6
seats, toys and furniture. Blue Ice{R}
Graco{R}
Little Tikes{R}
SHARPIE GROUP
This group is a world leader in Sharpie{R} 2002 6.1 25.6
writing instruments with a product Paper Mate{R} $1,908.7 [Pie chart
offering that includes pens, pencils, Waterman{R} omitted]
markers, juvenile writing instruments Parker{R} 2001
and fine writing instruments. This Colorific{R} $1,799.4
group also includes hair care Goody{R}
accessories.
IRWIN GROUP
This group includes an extensive Irwin{R} 2002 24.9 23.2
global offering of hand tools, power Lenox{R} $1,727.3 [Pie chart
tool accessories, window furnishings, Vise-Grip{R} omitted]
cabinet hardware, decorative trim, Marathon{R} 2001
paint applicators and propane torches. Quick-Grip{R} $1,382.6
BernzOmatic{R}
Shur-Line{R}
Levolor{R}
Kirsch{R}
CALPHALON HOME GROUP
This group showcases a worldwide Calphalon{R} 2002 5.5 16.4
product offering of branded cookware, $1,225.5 [Pie chart
bakeware, cutlery and kitchen omitted]
accessories. Also included is Anchor 2001
Hocking glassware and food service $1,161.7
products, as well as Burnes of Boston
and Connoisseur picture frames and
photo albums.
FREE CASH FLOW $392 MILLION ROIC 10.5%
Our five key measures and goals:
-------------------------------
INTERNAL SALES - MINIMUM GROWTH LEVEL OF 5%
Net sales growth for businesses we have owned longer than one year,
including minor acquisitions and divestitures.
OPERATING INCOME - 15%
Operating income, excluding restructuring and other non-recurring
charges, as a percentage of sales.
WORKING CAPITAL - MAXIMUM OF 20%
Five-quarter average of accounts receivable plus inventory, net of
accounts payable, divided by trailing 12-month sales.
FREE CASH FLOW - GROW FREE CASH FLOW IN LINE WITH EARNINGS GROWTH
Cash flow provided by operations, net of dividends and capital
expenditures.
RETURN ON INVESTED CAPITAL - MINIMUM OF 15%
Trailing 12-month after-tax operating income divided by a five-
quarter average of debt and equity.
____________________________________________________________________
2000 2001 2002
---- ---- ----
INTERNAL SALES GROWTH
(percent increase) .5 (7.6) 3.3
OPERATING INCOME
(percent of net sales) 12.9 9.5 10.4
[Bar graphs omitted]
____________________________________________________________________
2000 2001 2002
---- ---- ----
WORKING CAPITAL
(percent of net sales) 28.9 29.6 25.8
FREE CASH FLOW
(in millions of dollars) 82 392 392
RETURN ON INVESTED CAPITAL
(percent) 10.7 7.9 10.5
[Bar graphs omitted]
[Picture of Joseph Galli, Chief Executive officer, omitted]
TO OUR SHAREHOLDERS:
THESE ARE EXCITING TIMES AT NEWELL RUBBERMAID as we continue to
transform into a consumer-focused, new product driven company. We are
encouraged by our substantial progress. In 2002, we achieved strong
internal sales growth of 3.3%, the highest in over four years, and
earnings per share grew 15% to $1.58, excluding charges. Just as
important, we demonstrated meaningful improvement in all five of our
key financial measures.
We achieved these results by controlling our destiny in a
difficult macroeconomic environment. Today, our focus remains fixed on
what is strategically vital to us - organic growth through New Product
Development, Marketing and Strategic Account Management. In addition,
we have made broad-based improvements in our cost structure that are
providing the resources for these growth strategies.
We are also encouraged by the enormous potential we see for our
brands. We estimate that our sales account for only 2% of a $370
billion worldwide marketplace for consumer products and their
commercial extensions. By executing our strategic initiatives and
controlling our destiny, we will capture a larger share of this
enormous market. Our results to date provide early evidence that we
are right on track.
To further strengthen our presence in the worldwide marketplace,
we acquired two outstanding hardware companies, American Tool in April
2002, and American Saw in January 2003. These hardware companies
bring us five power brands: Lenox{R}, Irwin{R}, Marathon{R}, Vise-
Grip{R} and Quick-Grip{R}, and position us as a strong player in the
global hand tool and power tool accessories market.
HOW WE WIN. At Newell Rubbermaid we have formulated a thoughtful,
comprehensive plan to maximize our company's long-term results. We
call this our "How We Win" roadmap. It keeps us focused on the right
measures, the right strategy, the right organization, the right
operating cycle and the right culture. In short, our roadmap provides
the direction we need to win in the marketplace and create
value for our shareholders.
THE RIGHT MEASURES. All of our businesses measure their performance
by the same yardstick, using five key measures: INTERNAL SALES
GROWTH, OPERATING INCOME, WORKING CAPITAL, FREE CASH FLOW AND RETURN
ON INVESTED CAPITAL (ROIC). Collectively, they indicate how well we
are executing our strategies.
"... there are no boundaries for
Newell Rubbermaid and our powerful
portfolio of brands, only immense opportunities."
INTERNAL SALES GROWTH was 3.3% in 2002, versus a 7.6% sales decline in
2001. This significant sales growth was accomplished despite reducing
sales to certain high-risk customers. Historically, we struggled to
grow our existing businesses, and instead, relied on acquisitions for
sales growth. Today, we are focusing on growing sales organically. We
believe we will reach a minimum 5% sustainable annual internal sales
growth rate by 2004.
OPERATING INCOME as a percentage of sales, excluding restructuring and
other non-recurring charges, rose to 10.4% in 2002, versus 9.5% in
2001. Our plan is to grow operating income to 15% by improving our
gross margin through a combination of increased productivity, high-
margin new products and better product mix management. As operating
margins begin to exceed 15%, we will invest more heavily in new
product and marketing initiatives to ensure an even higher future
growth rate.
WORKING CAPITAL as a percentage of sales improved to 26% in 2002,
versus 30% in 2001. Working capital improvement is vital to providing
cash flow and allows us to further strengthen our balance sheet. We
made good progress on reducing our working capital, and believe we
have significant opportunities to further reduce inventory and to
increase payables.
FREE CASH FLOW reached $392 million in 2002, equaling our record
performance in 2001. Our free cash flow during 2002 is an important
reflection of the quality of our earnings. Essentially, it enabled us
to purchase American Tool. Over the next 12 to 18 months, our priority
will be to reduce debt rather than invest in significant acquisitions.
ROIC improved to 10.5% in 2002, versus 7.9% in 2001. Results in 2002
demonstrate that we are more effectively using our capital by
improving our earnings, reducing our working capital and better
utilizing our fixed capital. Our intermediate goal is to reach 15%
ROIC, and long-term, we will target 20% ROIC or greater.
THE RIGHT STRATEGY. At Newell Rubbermaid, our six strategic
initiatives provide us with a consistent template for driving
operating improvements to achieve our long-term financial goals.
Two initiatives, Productivity and Streamlining, target cost
reductions to provide funds for our growth initiatives. We're not
looking to be pioneers here; we only need to implement best practices
already established by other world-class companies.
The remaining four initiatives drive growth: New Product
Development, Marketing, Strategic Account Management and
Collaboration. They make up our "special sauce" because we believe
they will provide us with an unassailable competitive advantage.
The pages that follow this letter will further describe the six
strategic initiatives, along with a discussion of our Power Brands and
Phoenix Program.
THE RIGHT ORGANIZATION. We are aligning our organizational structure
to support our strategic plan. We have been extremely fortunate in
attracting outstanding people and infusing their talent into strategic
functions. In 2002, we enhanced our senior management team by adding
55 external hires and promoting 51 internal employees to the vice
president level and above. Bottom line: We now have one of the most
highly talented, passionate and results-oriented teams in the consumer
products industry.
2000 2001 2002
---- ---- ----
NET SALES
(in billions of dollars) 6.9 6.9 7.5
Q1 Q2 Q3 Q4
-- -- -- --
STRATEGIC ACCOUNT SALES
GROWTH 2002 (percent increase) 11 12 19 16
[Bar graphs omitted]
Our Phoenix Program, a network of over 500 recent college
graduates serves as our in-store sales force, focusing on our
strategic customers. We have hired over 1,000 Phoenicians from 128
universities since this program was established in 2001. Their impact
has been substantial - sales to our eight largest strategic accounts
are up 15% for the year and our relationships with these retailers are
stronger than ever. The Phoenix Program continues to be a source of
future company leaders and we have already promoted 255 high-potential
Phoenicians.
We concentrate heavily on training and developing the leadership
talent we identify within our organization. Our training hits every
level in the company, from newly hired Phoenicians to senior
executives. Our senior executives attend "Breakthrough Leadership", an
intensive week-long session of training taught by our company
executives and board members. The subjects: HOW TO DEVELOP OUT-
STANDING LEADERSHIP SKILLS AND HOW TO DRIVE BREAKTHROUGH
IMPROVEMENTS AT NEWELL RUBBERMAID.
Our strong commitment to developing our people will be further
amplified at our new global corporate headquarters in Atlanta,
Georgia, which will include a sophisticated world-class training
center.
THE RIGHT OPERATING CYCLE. Our operating cycle is a series of
monthly, quarterly and annual reviews. Previously, our businesses were
fiercely independent, operating with their own strategies, metrics and
timetables. Today, consistency is our operating standard. A consistent
company-wide operating cycle now ensures that we are collaborating on
the right things at the right time using a common language.
THE RIGHT CULTURE. We are changing our company from the top down and
the bottom up - driving a new way of thinking across all levels of our
organization. We are creating a collaborative, responsive
organization that is, above all, results-oriented. And while we
recognize that culture cannot change overnight, there is clearly a
growing esprit de corps in our organization.
WHERE WE GO FROM HERE. We are encouraged by our performance in 2002
and we believe we are on the right track. Nevertheless, we recognize
that there is still more to be done. How we grow from this point is
spelled out in our six strategic initiatives and five key measures.
What follows in the narrative is a look at those strategies in action,
and how they are reshaping our company.
As we see it, there are no boundaries for Newell Rubbermaid and
our powerful portfolio of brands, only immense opportunities. We
believe that we have the right strategy and people in place to deliver
consistent, long-term results.
Above all, we have the right attitude. Our culture centers on
the passion we all have for our business. Our people are a critical
part of making Newell Rubbermaid one of the great companies of the
world. In fact, the changes you will read about in this annual report
could not have happened without the singular focus and dedication
of Newell Rubbermaid's 47,000 employees.
Together, we control our destiny.
/s/ Joseph Galli
Joseph Galli
Chief Executive Officer
POWER BRANDS
[Pictures of products being used omitted]
OUR BRANDS TOUCH EVERY RETAIL CHANNEL - AND EVERY CONSUMER'S LIFE. At
Newell Rubbermaid, we make every-day products - things people need to
make everyday living easier, more comfortable and more enjoyable. But
our competitors make these types of products, too. So what sets
Newell Rubbermaid apart? Quite simply, the power of our brands.
OUR BRANDS ARE VALUABLE. Newell Rubbermaid offers some of the most
demanded retail brands in the market-place. Our portfolio includes 24
prominent, consumer-focused power brands that we streamlined from over
260 trade-focused brands. They are established market leaders that
have top-of-mind presence with virtually every consumer. When people
think of home storage and organization, they think Rubbermaid{R}. For
cooking, they trust Calphalon{R}. For building projects, Irwin{R}
tools get the job done. And for something as personal as an autograph,
they reach for a Sharpie{R} marker.
OUR BRANDS ARE PERVASIVE. They touch every retail sales channel, from
grocery stores and discount stores to warehouse clubs and home
centers. From office superstores and department stores to web-based
retailers. Wherever consumers work, live and play, you'll find our
products.
OUR BRANDS ARE EXTENDABLE. This gives us the advantage of re-branding
existing products to strengthen their marketability. Or in the case
of Rubbermaid{R} TakeAlongs{R} containers, using the recognized
Rubbermaid{R} brand to enter a new product category. These are just
two of the many ways we unlock the power of our brands.
[Picture of woman holding TakeAlongs{R} omitted]
RUBBERMAID{R} TAKEALONGS{R} ARE SEMI-DISPOSABLE FOOD STORAGE
CONTAINERS INTRODUCED IN 2002. LEVERAGING THE POWERFUL
RUBBERMAID{R} BRAND WITH A SUPERIOR NEW PRODUCT,
TAKEALONGS{R} HAVE CAPTURED A SIGNIFICANT POSITION OF THIS
KEY MARKET SEGMENT IN LESS THAN ONE YEAR. AN EXPANDED LINE
OF TAKEALONGS{R} WILL LAUNCH IN 2003.
[Picture of man using equipment omitted]
IRWIN IS INVESTING IN TECHNOLOGY TO DRIVE PRODUCTIVITY ON
THE FACTORY FLOOR. THIS GRINDER AUTOMATES MULTIPLE STEPS OF
THE MANUFACTURING PROCESS OF DRILL BITS INTO A SINGLE STEP -
IMPROVING THROUGHPUT AND REDUCING LABOR AND MATERIAL
HANDLING COSTS.
PRODUCTIVITY
OUR STRATEGY FOR PRODUCTIVITY IS DRIVEN BY A SIMPLE IDEA - CHALLENGE
EVERY COST. At Newell Rubbermaid we have a continuous improvement
mindset, or as we like to call it, a "raise the bar" culture, that is
at the heart of our productivity initiative. Our objective is to
become the best-cost supplier to our customers. To accomplish that,
we're challenging every component of our cost of production and
transportation. Our annual objective is to reduce total cost 5% year
over year.
Our Irwin group leads the company in driving productivity
breakthroughs. Irwin began by addressing their greatest opportunity
for savings - purchasing. Purchased materials represent more than 50%
of total cost of goods sold. Irwin was able to leverage Newell
Rubbermaid's consolidated purchasing power to drive lower cost and
reduce complexity in their supply chain.
Irwin also reduced the number of their suppliers by over 16% in
2002, and expects another 25% reduction in 2003. In addition, they
introduced a "supplier scorecard" to measure supplier productivity and
promote operational excellence in their supply chain. In purchasing
alone, Irwin achieved over 5% productivity in 2002.
Next, the Irwin group looked at manufacturing costs, closing 18
manufacturing facilities, streamlining excess capacity and shifting
production to lower-cost countries. This shift to lower-cost
countries positions Irwin for future global expansion.
Distribution and transportation is another source for
productivity. Irwin's early progress in this area includes
establishing a core North American freight carrier program that
reduced the number of carriers from roughly 1,200 to 200. Not only
has that significantly decreased complexity, but it also reduced the
cost of shipping.
On the factory floor, Irwin is focusing on operational excellence
to boost manufacturing productivity, quality and safety. Irwin uses
value stream mapping, Kaizen and other lean manufacturing principles
to improve material flow, reduce scrap, minimize down time and achieve
continuous improvement in cost, quality and service levels. And to
improve their process capabilities, Irwin is making high-return
investments in new equipment, technology and preventive maintenance
programs. The result for Newell Rubbermaid: world-class operations
that will support our future growth.
RIGHT: AFTER 25 YEARS OF EXCELLENCE IN PRODUCT DESIGN, CALPHALON
TAKES THEIR MARKETING TO THE NEXT LEVEL WITH THE CALPHALON CULINARY
CENTER IN CHICAGO, ILLINOIS. [Picture omitted]
BELOW: CALPHALON LAUNCHED AN EXCITING NEW LINE OF PRODUCTS IN 2002
CALLED COOKING WITH CALPHALON{R}, AN EXCLUSIVE LINE AT KOHL'S.
[Picture omitted.]
STREAMLINING
THE SG&A SAVINGS FROM STREAMLINING OPERATIONS DON'T GO DIRECTLY TO THE
BOTTOM LINE - WE USE THEM TO INVEST IN AND GROW OUR TOP LINE.
Streamlining goes hand in hand with improving productivity. We are
focused on reducing non-strategic and non-value-added SG&A activities
across our organization. We're centralizing administrative functions,
reducing excess layers and eliminating non-strategic spending. We're
creating a leaner, more flexible organization.
Streamlining isn't just about savings, it's about investing those
savings into strategic SG&A activities. Our Calphalon Home group is a
great example of streamlining success. In 2002, Calphalon used their
streamlining savings to launch the new Calphalon Culinary Center in
Chicago. This is one of our many new grass roots marketing programs.
In addition to generating valuable media publicity for the
Calphalon{R} brand, the center is putting our products in the hands of
consumers. Chefs at the Culinary Center conduct lectures,
demonstrations and hands-on cooking classes with the seamless
integration of Calphalon{R}products.
The results have been so successful that we're opening a Culinary
Center in Toronto in 2003 and up to 30 other schools over the next 5
years.
Calphalon also invested their SG&A savings into a dedicated
Phoenix team to support its launch of Cooking with Calphalon{R}. This
is an exclusive line of cookware for Kohl's, one of our strategic
customers.
Calphalon's success is one of many examples of effective
streamlining by Newell Rubbermaid in 2002. Further streamling
initiatives will provide the funds for even more exciting marketing
programs in the future.
[Pictures of culinary school omitted]
NEW PRODUCT DEVELOPMENT
[Background graphic of drawing omitted]
LEFT: EARLY PROTOTYPES ARE "FRANKENSTEINS" - ROUGH "CUT-AND-PASTE"
MODELS THAT DISPLAY FUNCTIONAL ATTRIBUTES. [Picture omitted]
CENTER: LATER MODELS INCORPORATE FUNCTIONAL DESIGN WITH AESTHETICS.
[Picture omitted]
RIGHT: FINAL PROTO-TYPES USE STEREOLITHOGRAPHY TECHNOLOGY FOR A HIGH-
QUALITY ATTRACTIVE MODEL TO SHOW TO OUR RETAIL CUSTOMERS. [Picture
omitted.]
AS SHOWN ABOVE, WE DEVELOP NUMEROUS PROTOTYPES THROUGHOUT OUR NEW
PRODUCT DEVELOPMENT PROCESS. USING THESE MODELS, WE SOLICIT FEEDBACK
FROM CONSUMERS AND FROM OUR RETAIL PARTNERS TO DEVELOP INNOVATIVE NEW
PRODUCTS.
NEW IDEAS YOU ASKED FOR
RUBBERMAID{R} STAIN SHIELD{TM} FOOD STORAGE CONTAINERS RESIST TOMATO
STAINS - EVEN IN MICROWAVES GRACO{R} TURBOBOOSTER{TM} A CAR SEAT THAT
GROWS WITH YOUR CHILD RUBBERMAID{R} CORNER DECK BOX MAKES USE OF
UNUSED SPACE LITTLE TIKES{R} GOOFY GIGGLES{TM} THE GROW-WITH-ME REMOTE
CONTROL
[Pictures of above products omitted]
OUR NEW PRODUCT DEVELOPMENT PROCESS IS DRIVEN BY A STRONG POINT OF
VIEW - THE CONSUMER'S. Keeping ahead of the competition means
differentiating our brands - not with commodity products, but with
impactful, innovative and patentable new products to meet consumer
needs. We've done this by developing an aggressive new product
development program - one in which the consumer now plays a pivotal
role.
The Rubbermaid group has taken the lead in our new product
development model, taking it from an engineering-driven process to a
consumer-driven process. Their best practices have been shared across
the company and the results have been remarkable. In fact, we
introduced more new products in 2002 than we had in the last three
years combined. More than just new, the products we develop are unique
in their categories. They offer patentable features, fashion-forward
styling and satisfy unmet consumer needs. Most importantly, this type
of product differentiation warrants higher margins for both Newell
Rubbermaid and our retailers.
In 2002, the launch of the revolutionary Stain Shield{TM} food
storage containers was the largest single new product launch in our
100-year history. Consumers asked for a food storage container that
would resist tomato sauce stains, even in the microwave. In the end,
we not only had a highly profitable new product, but a proven
technology for use in other new products company wide.
And in the youth booster seat market, the new sporty Graco{R}
TurboBooster{TM} car seat has redefined child safety and comfort. The
TurboBooster{TM} has safety features like energy-absorbing foam that
provide added side impact protection and it has a head support for
comfort that can be easily adjusted as a child grows.
The Corner Deck Box is another exciting new product from
Rubbermaid that will launch in early 2003. The water-proof Corner Deck
Box helps the consumer stay organized and its unique design makes use
of space in the corner of the deck. Another winner for 2003 is the
Goofy Giggles{TM} Remote Control from Little Tikes. This toy creates a
fun and unique learning environment for children. When touched, it
giggles and scoots away, encouraging crawling. As children develop,
they can use the remote control ring, which aids in the development of
their motor skills.
Rubbermaid will also launch a new family of coolers in 2003.
Consumers demanded large coolers that are easy to transport during
family activities. Rubbermaid responded by applying their new product
development model involving end-users in every step of the process.
The result is a functional and fashionable cooler with innovative
features such as a split lid with deep cupholders, a retractable
"luggage like" pull handle, and dual material wheels - another example
of our commitment to a full new product pipeline.
KURT BUSCH WON HIS FIRST CAREER WINSTON CUP RACE AT THE BRISTOL MOTOR
SPEEDWAY. WE LOVE TO SEE THE RUBBERMAID CAR IN VICTORY LANE, BUT OUR
SPONSORSHIP OF NASCAR IS REALLY ABOUT GRASS ROOTS MARKETING. NASCAR IS
AMERICA'S FASTEST GROWING SPECTATOR SPORT, DRAWING OVER 10 MILLION
FANS PER YEAR IN ATTENDANCE AND 250 MILLION TELEVISION VIEWERS.
NASCAR FANS HAVE THE HIGHEST BRAND LOYALTY OF ANY SPORT, AND WE
BELIEVE OUR SPONSORSHIP IS A HIGH-RETURN INVESTMENT.
[Picture of Kurt Busch omitted]
LEFT: SHARPIE{R} "TERRELL OWENS" HOLIDAY PRINT AD [PICTURE OMITTED]
CENTER: "HOW DO YOU USE YOUR SHARPIE{R}?" TELEVISION AND PRINT AD
CAMPAIGN [PICTURE OMITTED]
RIGHT: GOODY SPONSORS THE NATIONAL SPIRIT GROUP [PICTURE OMITTED]
MARKETING
WE FOCUSED OUR MARKETING EFFORTS ON THE CONSUMER TO INCREASE DEMAND
FOR OUR HIGH-IMPACT NEW PRODUCTS. Zero to $40 million in two years.
For a company's advertising budget, it's a phenomenal growth pace.
It's money well spent - both to reinforce our power brands and to
promote our impactful, high-margin new products.
Increased advertising is just one part of our marketing strategy.
We're also reaching out to consumers in a variety of hands-on ways -
creating heightened consumer demand for our products through grass
roots marketing. It includes innovative concepts such as the Phoenix
Program, our aggressive in-store sales force, NASCAR and other event
marketing. These programs put Newell Rubbermaid products directly into
the hands of consumers, generating brand loyalty and building a
strong, word-of-mouth following.
Our Sharpie{R} marker sales grew 23% during 2002, driven, in
part, by our marketing campaigns. For television advertising, the
"How do you use your Sharpie{R}" campaign highlighted the diverse and
creative ways people use the world's most popular marker. For print
advertising, Sharpie ran a holiday ad that was inspired by San
Francisco 49ers Terrell Owens's spontaneous use of a Sharpie{R}. On a
nationally televised NFL game, he ceremoniously pulled a Sharpie{R}
marker out of his sock and used it to sign his touchdown football.
The value of the media coverage generated by that single action is
immeasurable.
In collaboration with Newell Rubbermaid's overall sponsorship of
NASCAR, Sharpie sponsors the Sharpie{R} 500. The televised Bristol,
TN night race is one of the most popular, highly rated races in the
circuit, and, after two years of sponsorship, has energized the
Sharpie{R} brand. The Sharpie{R} 500 is not just a race, but an
entire weekend of activities, featuring the Newell Rubbermaid Block
Party. The Block Party includes product demos and interactive
displays that reach tens of thousands of consumers over the course of
the weekend.
The Sharpie group's Goody division is also driving demand through
grass roots marketing efforts. This year, Goody announced its
sponsorship of the National Spirit Group, an organization that reaches
more than three million cheerleaders and dancers across the nation.
This sponsorship leverages the Goody{R} brand and heightens its
visibility as a fashion leader in hair care accessories. Their focus
on this extremely influential segment of the teen market helped drive
their double-digit sales increase in 2002.
Television and print advertising campaigns, combined with
powerful grass roots marketing events will continue to play an
integral role in strengthening consumers' preference for Newell
Rubbermaid brands.
STRATEGIC
ACCOUNT MANAGEMENT
WE'RE GROWING OUR COMPANY WITH THE RIGHT RETAILERS. Not all retailers
are the same. Some are growing at an accelerated rate that offers us
greater opportunity. At Newell Rubbermaid, we have a name for those
customers: Strategic Accounts.
For Strategic Accounts, we focus our resources and efforts on new
ways to grow their business as well as our own. Our strategic
customers have priority for new product introductions like
Rubbermaid{R} TakeAlongs{R} containers and Calphalon{R} cutlery. They
also have priority for marketing investments such as support from our
Phoenix Program. We commit our time and best talent to partner with
these customers, and, as a result, they see as much opportunity in
Newell Rubbermaid as we see in them.
Strategic Account Management also drives our Key Account program. This
program, launched in 2001, established three distinct sales
organizations, each headed by its own president, to address the
specific needs of Wal*Mart, The Home Depot and Lowe's. Each Key
Account also has a dedicated team of Phoenicians driving sales at the
store level. Working closely with these Strategic Accounts, we're able
to customize services, enhance our response time, and most
importantly, build stronger relationships.
In 2002, Strategic Accounts represented 40% of our domestic
business and sales to our top eight Strategic Accounts grew 15%. These
are strong results and we are just beginning to tap the enormous
potential of all our Strategic Accounts.
MIKE SCHUMAKER, A WAL*MART PHOENICIAN, GETS AN EARLY START AT THE
NILES, ILLINOIS STORE. A DEDICATED PHOENIX TEAM IS ONE OF THE WAYS WE
INVEST IN OUR STRATEGIC ACCOUNTS LIKE WAL*MART. OUR PHOENICIANS
HELPED DRIVE OUR 9% SALES INCREASE TO WAL*MART IN 2002
[Picture of Mike Schumaker omitted]
SHARPIE{R} SALES AT THE HOME DEPOT HAVE IMPROVED SIGNIFI-
CANTLY DUE TO THE EFFORTS OF OUR PHOENICIANS, LIKE KEVIN
GLADSTONE. BECAUSE OF SHARPIE'S MANY USES, CREATIVE
MERCHANDISING CAN HAVE A TREMENDOUS IMPACT ON SALES.
[Picture of Kevin Gladstone omitted]
[Phoenix Program Logo Omitted]
PHOENIX PROGRAM
[Pictures Omitted]
MOST CONSUMER PRODUCTS COMPANIES HAVE A MERCHANDISING GROUP - WE HAVE
A SMALL ARMY. Today's retail environment is contentious, with our
competitors vying for shelf space, brand presence, product placement
and sales. Meet Newell Rubbermaid's frontline force - the 542 team
members of our Phoenix Program. They're no ordinary group of
merchandisers. They're the most powerful in-store sales force in the
industry.
Phoenix team members work exclusively in the field with dedicated
teams for Wal*Mart, The Home Depot and Lowe's, as well as other
Strategic Accounts. Their mission: build rock-solid relationships
with retailers at the store level. It's a mutually beneficial
arrangement. We help the retailer merchandise more effectively,
increasing sales for them and Newell Rubbermaid.
Our Phoenicians are recent university graduates, high achievers
with a visible passion for the business. They are not traditional
merchandising reps. Sure, they perform product demonstrations and
restock shelves, but their real talent lies in inventing profitable
new retail marketing tactics on the fly that drive incremental sales
for our products. Like cross-merchandising Sharpie{R} markers in the
lumber department and other key contractor areas in The Home Depot; or
training Lowe's associates on their innovative Size-in-Store Levolor
window blind program; or securing high-velocity front register space
for Rubbermaid{R} Stain Shield{TM} at Wal*Mart.
Our Phoenicians are a source of future company leaders. Since we
began, 255 Phoenicians have been promoted to mid-level sales and
marketing positions, infusing a valuable store-level and consumer
perspective into our organization. Hundreds of new graduates have
replaced them, committed to making further inroads into our Strategic
Accounts.
COLLABORATION
OUR BUSINESS UNITS ARE DIVERSE, YET THEY SHARE MANY THINGS. TAKE BEST
PRACTICES, FOR INSTANCE. Don't reinvent the wheel. An excellent
strategy to follow for an enterprise as large and diverse as Newell
Rubbermaid. That's why we continue to put such a heavy emphasis on
sharing knowledge and resources. It's a focus that is paying off, not
only in cost synergies from centralizing functions like purchasing,
distribution and transportation, but also in the way that our people
communicate and work together.
A new collaborative spirit is emerging at Newell Rubbermaid as we
continue to drive strategic and cultural change throughout the
company. Put simply, we are reshaping ourselves from the top down and
the bottom up. An example: we train all Phoenicians together as a
group, regardless of their ultimate Strategic Account assignments. As
a result, they have a collaborative mindset from day one, and they
take that mindset with them as they move through the ranks.
Collaboration has a positive impact on our new product
development teams. Our new product development process is cross-
functional, involving Marketing, R&D, Engineering, Purchasing,
Manufacturing and Logistics. We also consistently gather input from
external sources like our consumers and our retail partners. This
level of collaboration makes us extremely efficient, reducing the time
it takes to get to market with a new product. In fact, our
Rubbermaid{R} Tough Tools{TM} program, which will launch in mid-
2003, will be brought to market in less than 10 months.
The Rubbermaid{R} Tough Tools{TM} program was defined through
collaborative efforts between Rubbermaid and our hardware business.
This program targets the beginner to intermediate do-it-yourself
consumer for the most common household projects such as hanging a
picture or installing a shelf. Combining the quality of our hand
tools with the highly recognized Rubbermaid{R} brand, consumers who
look to Rubbermaid for storage solutions will now look to Rubbermaid
for project solutions.
At Newell Rubbermaid we are more powerful acting as one. By
combining our knowledge and expertise and leveraging our brands, we're
creating an organization that responds more effectively and
efficiently to changes in our competitive landscape.
[Picture Omitted]
THE RUBBERMAID{R} TOUGH TOOLS{TM} PROGRAM IS A COLLABORATIVE
EFFORT BETWEEN RUBBERMAID AND OUR HARDWARE BUSINESS.
TARGETING THE BEGINNER TO INTERMEDIATE DO-IT-YOURSELF
CONSUMERS, THESE ATTRACTIVE HIGH-QUALITY TOOLS HAVE A
COMFORTABLE ERGONOMIC RUBBERIZED GRIP THAT WE BELIEVE IS
DESTINED FOR SUCCESS WITH RETAILERS AS WELL AS END USERS.
[Pictures of tools omitted]
NEWELL RUBBERMAID DIRECTORS
WILLIAM P. SOVEY
Chairman of the Board
of the Company
Age 69
Director since 1986
JOSEPH GALLI
Chief Executive Officer
of the Company
Age 44
Director since 2001
SCOTT S. COWEN
President, Tulane University
Age 56
Director since 1999
ALTON F. DOODY
President & Chief Executive
Officer, Alton F. Doody Co., a
Marketing Consulting Company
Age 68
Director since 1976
ROBERT L. KATZ
President, Robert L. Katz & Associates,
Consultants in Corporate Strategy
Age 76
Director since 1975
WILLIAM D. MAROHN
Retired Vice Chairman of the Board,
Whirlpool Corporation
Age 62
Director since 1999
ELIZABETH CUTHBERT MILLETT
Private Investor
Age 46
Director since 1995
CYNTHIA A. MONTGOMERY
Professor, Graduate School of Business
Administration, Harvard University
Age 50
Director since 1995
ALLAN P. NEWELL
Private Investor
Age 56
Director since 1982
GORDON R. SULLIVAN
President, Association of the
United States Army
Age 65
Director since 1999
RAYMOND G. VIAULT
Vice Chairman, General Mills, Inc.
Age 58
Director since 2002
THOMAS E. CLARKE
President, New Business Ventures
Nike, Inc.
Age 51
Director since 2003
Newell Rubbermaid Officers
JOSEPH GALLI
Chief Executive Officer
Age 44
Joined Company 2001
WILLIAM T. ALLDREDGE
President - Corporate Development
& Chief Financial Officer
Age 62
Joined Company 1983
JEFFREY E. COOLEY
Group President - Calphalon Home
Age 49
Joined Company 1998
ANDREA L. HORNE
Vice President - Corporate
Development & Corporate Secretary
Age 37
Joined Company 2000
TIMOTHY J. JAHNKE
Vice President - Human Resources
Age 43
Joined Company 1986
DAVID A. KLATT
Group President - Rubbermaid
Age 38
Joined Company 2001
DOUGLAS L. MARTIN
Vice President - Treasurer
Age 40
Joined Company 1987
DALE L. MATSCHULLAT
Vice President - General Counsel
Age 57
Joined Company 1989
ROBERT S. PARKER
Group President - Sharpie
Age 57
Joined Company 1992
JAMES J. ROBERTS
Group President - Irwin
Age 44
Joined Company 2001
J. PATRICK ROBINSON
Vice President - Controller
Age 47
Joined Company 2001
Key Account Presidents
PAUL G. BOITMANN
President - The Home Depot Division
Age 41
Joined Company 2001
RICHARD L. KERN
President - Lowe's Division
Age 41
Joined Company 2001
STEVEN R. SCHEYER
President - Wal*Mart Division
Age 44
Joined Company 2001.
STOCKHOLDER INFORMATION
Additional copies of this annual report, proxy statement and Form 10-K
filed with the Securities and Exchange Commission, dividend
reinvestment plan information, recent and historical financial data
and other information about Newell Rubbermaid are available without
charge to interested stockholders upon request to:
Investor Relations
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 100
Rockford, IL 61108
(800) 424-1941
investor.relations@newellco.com
or the Company's website at:
www.newellrubbermaid.com
ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of Newell Rubbermaid will be held
May 7, 2003, 10:00 a.m. local time at:
The Northern Trust Company
50 South LaSalle Street
Chicago, Illinois 60675
INVESTOR AND OTHER INQUIRIES
Security analysts, investment professionals, news media and other
inquiries should be directed to:
David J. Honan
Vice President - Investor Relations
Newell Rubbermaid Inc.
6833 Stalter Drive, Suite 100
Rockford, IL 61108
(815) 381-8150
investor.relations@newellco.com
STOCKHOLDER ACCOUNT MAINTENANCE
Communications concerning the transfer of shares, lost certificates,
dividends, dividend reinvestment, receipt of multiple dividend checks,
duplicate mailings or change of address should be directed to the
Transfer Agent and Registrar:
EquiServe
Newell Rubbermaid Inc.
Transfer Agent
PO Box 2500
Jersey City, NJ 07303-2500
(800) 317-4445
www.equiserve.com
Individual account information may be obtained on the Internet at
http://gateway.equiserve.com
RESEARCH COVERAGE
A.G. Edwards & Sons
Robert W. Baird
Banc of America Securities
Barrington Research Associates
CIBC World Markets
Fahnestock
Goldman, Sachs & Co.
Lynch, Jones & Ryan, Inc.
Merrill Lynch
Midwest Research
Prudential Securities
Raymond James & Associates
Saloman Smith Barney
Wachovia Securities
____________________________________________________________________
FORWARD-LOOKING STATEMENTS
The statements contained in this annual report 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 2002 Form 10-K,
Exhibit 99, filed with the Securities and Exchange Commission.
____________________________________________________________________
PRODUCTS SHOWN ON BACK COVER
* Rubbermaid{R} Paint Applicators * Rubbermaid{R} Slim Cooler * Goody{R} Leather Rose Ponytailer
* Expo{R} Dry Erase Marker * Parker{R}51{TM} Special Edition * Calphalon{R} Contemporary
* Strait-Line{R} Laser Level * Sharpie{R} Grip Permanent Marker Cutlery
* Paper Mate{R} Clear Point{R} Pencils * Quick Grip{R} Clamp * BernzOmatic{R} Quickfire{R} Torch
* Graco{R} Quattro Tour{TM} Stroller * Marathon{R} 7 1/4" Saw Blade * Rubbermaid{R} Blue Ice{R} Action-
* Levolor{R} Drapery Hardware * Rubbermaid{R} TakeAlongs{R} Semi- Packer{R} Soft Cooler
* Little Tikes{R} Glitter Flitter{TM} Disposable Food Storage * Waterman{R} Fountain Pen
* Lenox{R} Utility Knife Containers * Connoisseur{R} and Burnes of
* Little Tikes{R} Natural Boston{R} Picture Frames
Interiors{TM} Mission Design
Wooden Table and Chair
THIS ANNUAL REPORT SHOULD BE READ IN CONJUNCTION WITH NEWELL
RUBBERMAID'S PROXY STATEMENT, DATED MARCH 24, 2003, AND THE 2002 FORM
10-K. COPIES OF THE PROXY STATEMENT AND FORM 10-K MAY BE OBTAINED
ONLINE AT WWW.NEWELLRUBBERMAID.COM.
[Pictures of products omitted]
Newell Rubbermaid
29 East Stephenson Street, Freeport Illinois 61032
* 815-235-4171 * www.newellrubbermaid.com
