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Newell Rubbermaid Reports Solid Second Quarter 2013 Results

Stocks in this article: NWL

Newell Rubbermaid (NYSE: NWL) today announced solid second quarter 2013 results.

“Our second quarter was another quarter of steady progress,” said Michael Polk, President and Chief Executive Officer. “Underlying core sales grew 2.5 percent and normalized EPS grew 11.1 percent to $0.50. We are well positioned to accelerate core growth in the back half of the year fueled by new item launches in Commercial Products, Tools, Writing and Baby and strengthened brand investment. We are confident in our full year 2013 guidance on core sales growth, margin and cash flow and given our strong EPS performance year to date, we are raising the low end of our normalized earnings per share guidance by $0.02, narrowing our guidance range to $1.80 to $1.84, a year-over-year increase of 8 to 10 percent.”

Second Quarter Executive Summary

  • Second quarter 2013 net sales were $1.47 billion, a 3.5 percent increase versus prior year results.
  • Excluding the impact of changes in foreign currency translation, core sales grew 4.5 percent, or 2.5 percent when adjusted for the 2012 timing shift of approximately $28 million in sales from the second quarter to the first quarter related to the company’s European SAP conversion.
  • Normalized operating margin of 14.9 percent increased 100 basis points, compared with prior year. Reported operating margin grew by 20 basis points.
  • Normalized diluted earnings per share were $0.50, a year-over-year increase of 11.1 percent due primarily to improved operating performance and lower interest expense.
  • Reported diluted earnings per share were $0.37 compared with $0.38 in the year-ago period, as improved operating performance from continuing businesses and lower interest expense were offset by increased restructuring costs and losses associated with discontinued operations.
  • Operating cash flow was $63.3 million versus $103.1 million in the prior year. The timing of Back-To-School sell-in on Writing in North America impacted accounts receivable negatively in the quarter as did the inventory build associated with a significant Tools new product platform launch in Brazil in the third quarter and new merchandising initiatives in Home Solutions. These impacts are expected to reverse in the third quarter.
  • The company paid dividends of $43.6 million and repurchased 1.45 million shares at a cost of $38.6 million, for a total of $82.2 million returned to shareholders, up 52 percent versus prior year.
  • 2013 guidance for core sales growth, normalized operating margin and operating cash flow is unchanged at 2 to 4 percent, improvement of up to 20 basis points and $575 to $625 million, respectively. The company raised the low end of its normalized EPS guidance by $0.02, for a revised normalized EPS guidance range of $1.80 to $1.84, or 8 to 10 percent improvement compared with prior year.

Second Quarter 2013 Operating Results

Net sales in the second quarter were $1.47 billion, an increase of 3.5 percent compared with the prior year. Core sales, which exclude 100 basis points of negative foreign currency translation, grew 4.5 percent, or 2.5 percent if adjusted for the 2012 timing shift of approximately $28 million from the second quarter to the first quarter related to the company’s European SAP conversion.

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