Newell Rubbermaid Inc. (NWL, Financial) filed Quarterly Report for the period ended 2009-03-31.
Newell Rubbermaid Inc. is a global manufacturer and full-service marketer of name-brand consumer products serving the needs of volume purchasersincluding discount stores and warehouse clubs home centers and hardware stores and office superstores and contract stationers. The company's multi-product offering consists of name-brand consumer products in six business segments: Storage Organization & Cleaning; Home Decor; Office Products; Infant/Juvenile Care & Play; Food Preparation Cooking & Serving and Hardware & Tools. Newell Rubbermaid Inc. has a market cap of $2.98 billion; its shares were traded at around $10.74 with a P/E ratio of 9.3 and P/S ratio of 0.5. The dividend yield of Newell Rubbermaid Inc. stocks is 3.9%. Newell Rubbermaid Inc. had an annual average earning growth of 4.1% over the past 5 years.
Net sales for the three months ended March 31, 2009 were $1,203.9 million, representing a decrease of $229.8 million, or 16.0%, from $1,433.7 million for the three months ended March 31, 2008. Core sales declined 10.3% compared to the prior year resulting from lower consumer foot traffic and corresponding lower product demand as well as inventory destocking at the retail level. Planned product line exits and foreign currency contributed an additional 4.5% and 4.8% to the year-over-year sales decline, respectively. The Technical Concepts and Aprica acquisitions increased sales by $52.0 million, or 3.6%, over the prior year. Excluding acquisitions and foreign currency, sales of the Companys domestic and international businesses declined approximately 15% and 14%, respectively, versus the prior year.
The Company recorded restructuring costs of $30.5 million and $18.4 million for the three months ended March 31, 2009 and 2008, respectively. The 2009 restructuring costs included $4.6 million of facility and other exit costs, $20.9 million of employee severance, termination benefits and employee relocation costs, and $5.0 million of exited contractual commitments and other restructuring costs. The first quarter 2008 restructuring costs included $(3.8) million of facility and other exit costs, $18.0 million of employee severance, termination benefits and employee relocation costs and $4.2 million of exited contractual commitments and other restructuring costs, of which $1.4 million relates to the Companys 2001 Plan. The year-over-year increase in restructuring costs was largely attributable to restructuring programs focused on streamlining the organizational structure to reduce structural SG&A costs. See Footnote 3 of the Notes to Condensed Consolidated Financial Statements for further information.
Operating income for the three months ended March 31, 2009 was $60.3 million, or 10.8% of sales, an increase of $6.9 million, or 12.9%, from $53.4 million, or 8.8% of sales, for the three months ended March 31, 2008. Management of SG&A spending, which contributed approximately $14.0 million to the year-over-year improvement in operating income, was the primary driver of the increase. The remainder of the change in operating income was driven by favorable input costs offset by the impact of lower production volumes and unfavorable product mix.
Net sales for the three months ended March 31, 2009 were $328.0 million, a decrease of $79.2 million, or 19.4%, from $407.2 million for the three months ended March 31, 2008. Core sales declines accounted for approximately 20% of the overall deterioration in year-over-year sales as the impact of retailer inventory management, continued softness in the U.S. residential construction market, and increased weakness in industrial and commercial channels negatively impacted sales volumes. Unfavorable foreign currency caused an additional 4.6% decline, and the Technical Concepts acquisition increased sales $26.2 million, or 6.4%, versus the prior year.
In the three months ended March 31, 2009, the Company received proceeds of $758.0 million from the issuance of debt compared to $747.3 million in the three months ended March 31, 2008. In March 2009, the Company completed the offering and sale of $300.0 million unsecured and unsubordinated notes and $345.0 million convertible senior notes. Proceeds from these note issuances were used to complete the convertible note hedge transactions and will be used to repay debt maturing in 2009 and 2010 and for general corporate purposes. Also related to the issuance of the convertible senior notes, the Company entered into warrant transactions in which the Company sold warrants to third parties for approximately $32.7 million. See Footnotes 5 and 6 of the Notes to Condensed Consolidated Financial Statements for additional information on these transactions. In the first quarter of 2009, the Company also borrowed $125.0 million under its syndicated revolving credit facility (the Revolver) and repaid the amount during the first quarter of 2009. In March 2008, the Company completed the issuance of $500.0 million of senior notes due 2013 and $250.0 million of senior notes due 2018.
Read the The complete ReportNWL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Arnold Van Den Berg of Century Management, David Williams of Columbia Value and Restructuring Fund, Brian Rogers of T Rowe Price Equity Income Fund, Kenneth Fisher of Fisher Asset Management, LLC, John Keeley of Keeley Fund Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, David Dreman of Dreman Value Management.
Newell Rubbermaid Inc. is a global manufacturer and full-service marketer of name-brand consumer products serving the needs of volume purchasersincluding discount stores and warehouse clubs home centers and hardware stores and office superstores and contract stationers. The company's multi-product offering consists of name-brand consumer products in six business segments: Storage Organization & Cleaning; Home Decor; Office Products; Infant/Juvenile Care & Play; Food Preparation Cooking & Serving and Hardware & Tools. Newell Rubbermaid Inc. has a market cap of $2.98 billion; its shares were traded at around $10.74 with a P/E ratio of 9.3 and P/S ratio of 0.5. The dividend yield of Newell Rubbermaid Inc. stocks is 3.9%. Newell Rubbermaid Inc. had an annual average earning growth of 4.1% over the past 5 years.
Highlight of Business Operations:
The Company expects to incur restructuring costs between $100 and $150 million ($80 and $120 million after-tax) in 2009. The Company expects to have completed implementation of its Project Acceleration restructuring initiative by the end of 2010, and the total costs expected to be incurred over the life of the initiative are expected to be between $475 and $500 million. As of March 31, 2009, the remaining costs expected to be incurred to complete Project Acceleration are between $125 and $150 million. Cumulative annualized savings expected to be realized from the implementation of Project Acceleration are between $175 and $200 million once completed, with more than $100 million in annualized savings realized to date.Net sales for the three months ended March 31, 2009 were $1,203.9 million, representing a decrease of $229.8 million, or 16.0%, from $1,433.7 million for the three months ended March 31, 2008. Core sales declined 10.3% compared to the prior year resulting from lower consumer foot traffic and corresponding lower product demand as well as inventory destocking at the retail level. Planned product line exits and foreign currency contributed an additional 4.5% and 4.8% to the year-over-year sales decline, respectively. The Technical Concepts and Aprica acquisitions increased sales by $52.0 million, or 3.6%, over the prior year. Excluding acquisitions and foreign currency, sales of the Companys domestic and international businesses declined approximately 15% and 14%, respectively, versus the prior year.
The Company recorded restructuring costs of $30.5 million and $18.4 million for the three months ended March 31, 2009 and 2008, respectively. The 2009 restructuring costs included $4.6 million of facility and other exit costs, $20.9 million of employee severance, termination benefits and employee relocation costs, and $5.0 million of exited contractual commitments and other restructuring costs. The first quarter 2008 restructuring costs included $(3.8) million of facility and other exit costs, $18.0 million of employee severance, termination benefits and employee relocation costs and $4.2 million of exited contractual commitments and other restructuring costs, of which $1.4 million relates to the Companys 2001 Plan. The year-over-year increase in restructuring costs was largely attributable to restructuring programs focused on streamlining the organizational structure to reduce structural SG&A costs. See Footnote 3 of the Notes to Condensed Consolidated Financial Statements for further information.
Operating income for the three months ended March 31, 2009 was $60.3 million, or 10.8% of sales, an increase of $6.9 million, or 12.9%, from $53.4 million, or 8.8% of sales, for the three months ended March 31, 2008. Management of SG&A spending, which contributed approximately $14.0 million to the year-over-year improvement in operating income, was the primary driver of the increase. The remainder of the change in operating income was driven by favorable input costs offset by the impact of lower production volumes and unfavorable product mix.
Net sales for the three months ended March 31, 2009 were $328.0 million, a decrease of $79.2 million, or 19.4%, from $407.2 million for the three months ended March 31, 2008. Core sales declines accounted for approximately 20% of the overall deterioration in year-over-year sales as the impact of retailer inventory management, continued softness in the U.S. residential construction market, and increased weakness in industrial and commercial channels negatively impacted sales volumes. Unfavorable foreign currency caused an additional 4.6% decline, and the Technical Concepts acquisition increased sales $26.2 million, or 6.4%, versus the prior year.
In the three months ended March 31, 2009, the Company received proceeds of $758.0 million from the issuance of debt compared to $747.3 million in the three months ended March 31, 2008. In March 2009, the Company completed the offering and sale of $300.0 million unsecured and unsubordinated notes and $345.0 million convertible senior notes. Proceeds from these note issuances were used to complete the convertible note hedge transactions and will be used to repay debt maturing in 2009 and 2010 and for general corporate purposes. Also related to the issuance of the convertible senior notes, the Company entered into warrant transactions in which the Company sold warrants to third parties for approximately $32.7 million. See Footnotes 5 and 6 of the Notes to Condensed Consolidated Financial Statements for additional information on these transactions. In the first quarter of 2009, the Company also borrowed $125.0 million under its syndicated revolving credit facility (the Revolver) and repaid the amount during the first quarter of 2009. In March 2008, the Company completed the issuance of $500.0 million of senior notes due 2013 and $250.0 million of senior notes due 2018.
Read the The complete ReportNWL is in the portfolios of John Rogers of ARIEL CAPITAL MANAGEMENT LLC, Arnold Van Den Berg of Century Management, David Williams of Columbia Value and Restructuring Fund, Brian Rogers of T Rowe Price Equity Income Fund, Kenneth Fisher of Fisher Asset Management, LLC, John Keeley of Keeley Fund Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, David Dreman of Dreman Value Management.
