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Newell Rubbermaid Reports Solid Fourth Quarter 2012 Results And Provides 2013 Guidance

Stocks in this article: NWL

Newell Rubbermaid (NYSE: NWL) today announced solid fourth quarter 2012 results.

“We are pleased with our quarterly and full year 2012 performance,” said President and Chief Executive Officer Michael Polk. “Our solid fourth quarter financial results represent the sixth consecutive quarter of consistent delivery in line with or better than expectations. Full year normalized EPS and operating cash flow both came in above the high end of our guidance range. We increased core sales by 2.2%, a sequential improvement versus last year, and a solid outcome in the face of tough economic conditions in Europe and challenges in our Décor business. Our Win Bigger brands have healthy share momentum and we are generating strong core sales growth in emerging markets, particularly in Latin America. We also returned significant levels of cash to shareholders through our dividend, which nearly doubled in 2012 to the current annualized rate of $0.60, and our ongoing share repurchase program.”

Polk added, “Looking ahead, we continue to be sharply focused on driving structural costs out and accelerating growth through the execution of our Growth Game Plan. The strategic changes we are making to invest behind our Win Bigger businesses will drive accelerated performance and enable us to build a bigger, faster-growing, more global and more profitable Newell Rubbermaid.”

Executive Summary

  • Fourth quarter 2012 net sales were $1.52 billion, an increase of 1.6 percent versus prior year results.
  • Core sales, which exclude the impact of changes in foreign currency translation, grew 2.2 percent.
  • Normalized diluted earnings per share were $0.43 compared with $0.40 in the prior year period; reported diluted earnings per share were $0.35 compared with $0.27 in the year-ago period.
  • Operating cash flow in the quarter was $261.3 million. Full year 2012 operating cash flow was $618.5 million, an improvement of $57.2 million versus prior year.
  • The company returned $67.8 million to shareholders in the fourth quarter through dividends of $43.5 million and the repurchase of 1.1 million shares at a cost of $24.3 million.
  • The company strengthened its balance sheet and reduced ongoing interest expense through the early repayment of $500 million in 5.5% notes due April 2013. The debt was refinanced through the issuance of $350 million in 2.05% notes due 2017, cash on hand and short-term borrowings.
  • The company provided 2013 guidance for core sales growth in a range from 2 to 4 percent, normalized operating margin improvement of up to 20 basis points, normalized earnings per share of $1.78 to $1.84 and operating cash flow of $575 to $625 million, which includes an incremental pension plan contribution of $50 million.

Fourth Quarter 2012 Operating Results

Net sales in the fourth quarter were $1.52 billion, an increase of 1.6 percent compared with the prior year. Core sales, which exclude 60 basis points of adverse foreign currency translation, grew 2.2 percent. Sales growth was largely attributable to the Tools, Baby & Parenting and Writing segments and to robust growth in Latin America.

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