As expected, gross margin of 36.5 percent represented a decline of 70 basis points versus prior year. Normalized gross margin decreased 50 basis points versus prior year to 36.7 percent as the company made incremental investments in customer programs associated with fourth quarter events and stronger 2013 new item sell-in.
Operating margin for the quarter was 10.1 percent, an increase of 170 basis points compared to the prior year. Normalized operating margin was 11.7 percent, a decrease of 10 basis points to the prior year. Lower structural SG&A costs reflecting the benefits of Project Renewal initiatives were offset by higher incentive compensation, customer programs and strategic SG&A spending on sales force expansion in Tools and Commercial Products in Latin America and Rubbermaid Healthcare in North America, and on increased advertising and promotion expenses in Writing.
Fourth quarter reported operating income was $153.8 million versus $125.5 million in the prior year period, and normalized operating income was $177.8 million compared with $176.8 million in the prior year period. Fourth quarter normalized operating income excludes $24.0 million of restructuring and restructuring-related costs incurred primarily in connection with Project Renewal and the European Transformation Plan. In 2011, normalized operating income excluded $49.4 million of restructuring and restructuring-related costs incurred in connection with the European Transformation Plan and Project Renewal and $1.9 million in incremental costs associated with the company’s CEO transition.
The reported tax rate for the quarter was 23.1 percent compared with 19.6 percent in the prior year. The normalized tax rate was 20.7 percent compared with 23.0 percent in the prior year. The year-over-year change in the normalized tax rate was primarily driven by the geographic mix of earnings and utilization of tax attributes.Net income, as reported, was $101.9 million, or $0.35 per diluted share, for the fourth quarter. This compares with $80.4 million, or $0.27 per diluted share, in the prior year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV