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NWL : NEWELL RUBBERMAID (NYSE)
All Headlines
Newell Rubbermaid Reports First Quarter Results
* EPS of $0.24, Up 33% Versus Prior Year, Beats First Call Estimate * Free Cash Flow of $30 Million Up $22 Million From Q1 2001
FREEPORT, Ill., May 1, 2002 /PRNewswire-FirstCall via COMTEX/ -- Newell Rubbermaid Inc. (NYSE: NWL chart, msgs) today announced that its earnings for the first quarter exceeded Wall Street expectations and were in line with the company's previous guidance.
First Quarter Results
Net sales in the first quarter of 2002 were $1.60 billion, down 0.9% from $1.61 billion in the first quarter 2001 and in line with company expectations. This represents a five-and-a-half-point trend improvement in internal growth versus the fourth quarter of 2001. The company cited solid performance in its Rubbermaid Home Products business, which grew revenue by 5% in the quarter and is gaining additional retail shelf space as a result of new product introductions and account reviews won over the last year. The company also said that its Parker/Eldon writing instruments and office products business grew solidly in the quarter, with sales up five percent.
Excluding restructuring and other non-recurring items, diluted earnings per share were $0.24 in the first quarter of 2002 versus $0.18 in the fourth quarter of 2001, a 33% improvement. The First Call consensus estimate was $0.22.
As part of its previously announced restructuring plan, the company recorded first quarter pre-tax restructuring and other non-recurring items of $19.8 million ($13.1 million after taxes) related primarily to severance and facility exit costs in connection with the company's streamlining initiative. Including these restructuring and other non-recurring items, diluted earnings per share were $0.19 in the first quarter of 2002 versus $0.14 in the first quarter of 2001, a 36% improvement.
As previously disclosed, during the first quarter the company adopted the new accounting standard for "Goodwill and Other Intangible Assets" (SFAS Rule No. 142). As a result, the company recorded a $514.9 million one-time, after-tax, non-cash charge in its first quarter income statement. During the quarter, the company also adopted the non-amortization provision of SFAS Rule No. 142. This accounting change resulted in a first quarter earnings improvement of $0.03 per diluted share.
Including all charges and the impact of the previously announced accounting change, the company reported a diluted loss per share of a $1.74 in the first quarter of 2002. Diluted earnings per share were $0.14 in the first quarter of 2001.
The quarter was highlighted by a continued improvement in free cash flow, up $22 million from the first quarter of 2001, building on the significant progress made in 2001. For the quarter, the company generated free cash flow of $30.4 million versus $8.3 million generated in the first quarter of 2001. The company defines free cash flow as cash generated from operations, net of capital expenditures and dividends.
The company pointed to a continued trend in improved year-over-year inventory levels and better management of accounts payable as major contributors to cash flow. For the quarter, inventory levels were $1.15 billion, down $162.6 million from the first quarter of 2001, and accounts payable were $525.8 million, up $159.3 million from the first quarter of 2001.
The company added that its continued focus on productivity measures contributed to the expansion of gross margin by over two points, excluding charges, to 26.7% in the quarter from 24.5% in the first quarter of 2001.
"We continued to build momentum during the first quarter and feel we are extremely well positioned to achieve our sales and earnings targets for the year," said Joseph Galli, Newell Rubbermaid's Chief Executive Officer. "The company is making significant progress in new product development, key account management and building a world class management team. We are transforming Newell Rubbermaid strategically and organizationally into a company capable of continuous sales and earnings growth."
Among the operating highlights of the first quarter:
* On April 30, the company acquired American Tool Companies, a leading
manufacturer of hand tools and power tool accessories. This marks an
important expansion and enhancement of the company's product lines and
customer base and gives the company significant scale in the "do-it
-yourself" retailing market. The hand tool and power tool accessories
portfolio includes branded hand tools such as Vise-Grip(R) pliers,
Quick-Grip(R) hand clamps, Record(R) vises, Straight-Line(TM) marking
tools and Prosnip(R) snips, in addition to power tool accessories such
as Irwin(R) and Speedbor(R) wood boring bits, Hanson(R) drill bits,
Marathon(TM) saw blades, Joran(R) masonry drill bits and Unibit(TM)
step drills.
* During the quarter, the company continued to strengthen its management
ranks, with 21 new hires and promotions at the vice president and
president levels.
* The company nominated Raymond G. Viault, vice chairman of General
Mills, Inc., an executive with broad experience in the consumer
products industry, to Newell Rubbermaid's board of directors. The
company added that Mr. Viault's global brand building and general
management experience, international expertise and contributions as a
board member of other organizations would add enormously to the
company's strategic direction.
2002 Outlook
The company reiterated that for the full year 2002 it expects diluted earnings per share, excluding charges, to be in the range of $1.48 - $1.58. For the second quarter 2002, the company expects diluted earnings per share to be in the range of $0.34 - $0.39.
Conference Call
The company's first quarter 2002 conference call is scheduled for today, May 1 at 10:00 a.m. CT. To participate on the call, please RSVP at (402) 220- 0820. A dial-in number will be provided at that time. The call also may be accessed live by listening to an audio cast. To listen to the audio cast, use the link provided under Investor Relations on Newell Rubbermaid's corporate home page at www.newellco.com .
A replay of the call will be available approximately two hours following the conclusion of the call through May 31, 2002 by dialing (402) 220-0820.
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 2001 Form 10-K, Exhibit 99, filed with the Securities and Exchange Commission.
This press release and additional financial information about the company's first quarter results are also available at the Company's Web site at www.newellco.com .
Newell Rubbermaid Inc. is a global marketer of consumer products with 2001 sales of nearly $7 billion and a powerful brand family including Sharpie(R), Paper Mate(R), Parker(R), Waterman(R), Colorific(R), Rubbermaid(R), Blue Ice(R), Calphalon(R), Little Tikes(R), Graco(R), Levolor(R), Kirsch(R), Shur- Line(R), BernzOmatic(R), Eldon(R), Goody(R), Vise-Grip(R), Quick-Grip(R) and Irwin(R). The company is headquartered in Freeport, Illinois and employs 49,000 people worldwide.
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in millions, except per share data)
As reported
Three Months Ended March 31,
2002 2001 % Change
Net sales $1,597.0 $1,610.7 (0.9)%
Cost of products sold 1,177.9 1,218.9
GROSS MARGIN 419.1 391.8 7.0%
% of sales 26.2% 24.3%
Selling, general &
administrative expense 299.1 264.6 13.0%
% of sales 18.7% 16.4%
Restructuring costs 9.8 10.0 (2.0)%
Goodwill amortization
and other 0.0 14.1
OPERATING INCOME 110.2 103.1 6.9%
% of sales 6.9% 6.4 %
Nonoperating expenses:
Interest expense 25.1 39.3
Interest income (0.7) (1.3)
Other 8.6 4.1
33.0 42.1 (21.6)%
INCOME BEFORE TAXES AND
CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 77.2 61.0 26.6%
% of sales 4.8% 3.8 %
Income taxes 26.2 22.6
Effective rate 34.0% 37.0 %
NET INCOME BEFORE CUMULATIVE
EFFECT
OF ACCOUNTING CHANGE $51.0 $38.4 32.6%
% of sales 3.2% 2.4 %
Cumulative effect of accounting
change ($514.9) $0.0
NET INCOME / (LOSS) ($463.9) $38.4
% of sales -29.1% 2.4 %
EARNINGS PER SHARE BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE:
Basic $0.19 $0.14 35.7%
Diluted $0.19 $0.14 35.7%
EARNINGS PER SHARE CUMULATIVE EFFECT OF
ACCOUNTING CHANGE:
Basic $(1.93) $- NA
Diluted $(1.93) $- NA
EARNINGS PER SHARE:
Basic $(1.74) $0.14 NA
Diluted $(1.74) $0.14 NA
Average shares outstanding:
Basic 266.8 266.6 0.1%
Diluted 266.8 266.6 0.1%
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(in millions, except per share data)
Excluding non-recurring items
Three Months Ended
March 31,
2002 2001 % Change
Net sales $1,597.0 $1,610.7 (0.9)%
Cost of products sold 1,171.2 1,215.8
GROSS MARGIN 425.8 394.9 7.8%
% of sales 26.7% 24.5%
Selling, general &
administrative expense 295.8 263.5 12.3%
% of sales 18.5% 16.4%
Restructuring costs 0.0 0.0
Goodwill amortization
and other 0.0 14.1
OPERATING INCOME 130.0 117.3 10.8%
% of sales 8.1% 7.3%
Nonoperating expenses:
Interest expense 25.1 39.3
Interest income (0.7) (1.3)
Other 8.6 4.1
33.0 42.1
INCOME BEFORE TAXES 97.0 75.2 29.0%
% of sales 6.1% 4.7%
Income taxes 33.0 27.8
Effective rate 34.0% 37.0%
NET INCOME $64.0 $47.4 35.1%
% of sales 4.0% 2.9%
EARNINGS PER SHARE:
Basic $0.24 $0.18 33.3%
Diluted $0.24 $0.18 33.3%
Average shares outstanding:
Basic 266.8 266.6 0.1%
Diluted 266.8 266.6 0.1%
Newell Rubbermaid Inc.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(in millions)
March 31, March 31,
2002 2001
Assets:
Cash and cash equivalents $10.2 $19.9
Accounts receivable, net 1,191.3 1,131.5
Inventories, net 1,147.4 1,310.0
Other current assets 428.0 411.5
Total Current Assets 2,776.9 2,872.9
Marketable Equity Securities - 7.9
Other Long-Term Investments 80.1 74.9
Other Assets 363.3 342.8
Property, Plant and Equipment 1,645.4 1,719.5
Trade Names and Goodwill 1,744.6 2,150.1
Total Assets $6,610.3 $7,168.1
Liabilities and Stockholders'
Equity:
Notes payable $29.7 $13.8
Accounts payable 525.8 366.5
Accrued liabilities and other 1,102.1 951.7
Current portion of long-term debt 553.0 214.3
Total Current Liabilities 2,210.6 1,546.3
Long-Term Debt 1,565.2 2,318.3
Company-Obligated Mandatorily
Redeemable
Convertible Securities of a
Subsidiary Trust 500.0 500.0
Other Long-Term Liabilities 449.1 459.1
Stockholders' Equity 1,885.4 2,344.4
Total Liabilities and
Stockholders' Equity $6,610.3 $7,168.1
Newell Rubbermaid Inc.
CONSOLIDATED STATEMENTS OF CASH FLOW (UNAUDITED)
(in millions)
For The Three Months Ended March 31,
2002 2001
Operating Activities:
Net income $(463.9) $38.4
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 68.0 87.6
Cumulative effect of change
in accounting 514.9
Deferred taxes and other 45.2 19.6
Changes in current accounts,
excluding the effects of
acquisitions:
Accounts receivable 95.7 45.9
Inventories (50.0) (56.1)
Other current assets (12.6) 7.7
Accounts payable 28.7 24.5
Accrued liabilities and other (103.5) (43.5)
Net cash provided by (used in)
operating activities $122.5 $124.1
Investing activities:
Acquisitions, net $11.3 $(15.4)
Expenditures for property, plant
and equipment (36.0) (59.7)
Disposals of non-current assets
and other 3.4 4.7
Net cash provided by (used in )
investing activities $(21.3) $(70.4)
Financing Activities:
Proceeds from issuance of debt $515.1 $19.1
Payments on notes payable and
long-term debt (561.1) (18.7)
Proceeds from exercised stock
options and other 3.9 0.8
Stock repurchase - -
Cash dividends (56.0) (56.0)
Net cash provided by (used in )
financing activities $(98.1) $(54.8)
Exchange rate effect on cash $0.3 $(1.5)
Increase (decrease) in cash and
cash equivalents 3.4 (2.6)
Cash and cash equivalents at
beginning of year 6.8 22.5
Cash and cash equivalents at end
of period $10.2 $19.9
Supplemental cash flow disclosures -
Cash paid during the period
for:
Income taxes $13.0 $(40.8)
Interest 24.3 52.5
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tbutton.prnewswire.com 
Source: Newell Rubbermaid Inc.
Contact:
Jesse Herron, Director - Investor Relations, +1-815-381-8150,
fax, +1-815-381-8155; Ken Ross, VP Corp. Communications, +1-815-381-8151, fax,
+1-815-381-8176; or Victoria Gilbert, Mgr. Corp. Communications,
+1-815-381-8151, fax, +1-815-381-8176, all of Newell Rubbermaid Inc.
/Company News On-Call: prnewswire.com
URL: newellco.com
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