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Newell Rubbermaid Issues Revised Fourth Quarter Outlook

^{Published on 2008-12-17 07:11:31 - Market Wire}
 

ATLANTA--([ BUSINESS WIRE ])--Newell Rubbermaid (NYSE: NWL) announced today that in light of the continuing significant deterioration of global economic conditions and the resulting impact on many of its retail customers, particularly in recent weeks, the company is currently estimating 2008 fourth quarter normalized earnings of $0.06 to $0.10 per diluted share, compared with previous guidance of $0.29 to $0.34 per diluted share. For the full year 2008, the company expects normalized earnings of between $1.17 and $1.21 per diluted share, compared with previous guidance of $1.40 to $1.45 per diluted share. Net sales for the fourth quarter are expected to show a year over year decline in the low teens percentage range. The company anticipates it will generate full year operating cash flow of $375 to $400 million, in line with previous guidance.

"We are seeing extraordinary volatility, weaker than expected demand, and customer inventory reductions across virtually all geographies and market segments, with trends worsening as we near the end of our fourth quarter," said Mark Ketchum, president and chief executive officer. "The unprecedented rapidity of the economy's decline makes it difficult to anticipate an economic rebound any time soon. Our expectations are for a more challenging business environment in 2009 than any we've seen to date. Therefore, we will be taking additional measures to better position the company for a prolonged downturn, by further reducing costs and maximizing cash."

The company actions include an 8 to 10 percent reduction of the salaried workforce which began in 2008 and will continue in 2009, and a wage and salary freeze. In addition, the company is implementing temporary shutdowns at a number of manufacturing facilities in order to reduce inventory levels. The company will provide further detail on these and other actions, and discuss 2009, when it conducts its fourth quarter earnings announcement on January 29, 2009.

"Our strategy to drive long-term shareholder value has not changed. We believe that Newell Rubbermaid's consumer brand driven growth strategy and disciplined financial management will enable us to weather the short term storms and emerge from this economic cycle a much stronger competitor, positioned to execute our growth plans and return value to our shareholders," said Ketchum.

A reconciliation of the previous and current fourth quarter 2008 earnings outlook is as follows:

A reconciliation of the previous and current full year 2008 earnings outlook is as follows:

(1) Reflects all known "one-time events". One-time events in the fourth quarter 2008 represent a tax benefit of $26 million or $0.09 per diluted share. One-time events for the full year 2008 include the net of tax impact of the company's purchase of a call option with respect to its $250 million of 6.35% Reset notes due 2028 for approximately $52 million or approximately $0.13 per diluted share, as well as tax benefits of $0.10 per share.

Caution Concerning Forward-Looking Statements

Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking statements relate to information or assumptions about the effects of sales, income/(loss), earnings per share, operating income or gross margin improvements or declines, Project Acceleration, capital and other expenditures, cash flow, dividends, restructuring costs, costs and cost savings, inflation, particularly with respect to commodities such as oil and resin, debt ratings, and management's plans, projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate," "expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail economies in light of the global economic slowdown; competition with other manufacturers and distributors of consumer products; major retailers' strong bargaining power; changes in the prices of raw materials and sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to develop innovative new products and to develop, maintain and strengthen our end-user brands; our ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; our ability to implement successfully information technology solutions throughout our organization; our ability to improve productivity and streamline operations; our ability to refinance short term debt on terms acceptable to us, particularly given the recent turmoil and uncertainty in the global credit markets; significant increases in the funding obligations related to our pension plans due to declining asset values or otherwise; the risks inherent in our foreign operations and those factors listed in the company's most recent quarterly report on Form 10-Q, and Exhibit 99.1, filed with the Securities and Exchange Commission. Changes in such assumptions or factors could produce significantly different results. The information contained in this news release is as of the date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a result of new information or future events or developments.

Non-GAAP Financial Measures

This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange Commission. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP is therefore provided.

About Newell Rubbermaid

Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of consumer and commercial products with sales of over $6 billion and a strong portfolio of brands, including Rubbermaid®, Sharpie®, Graco®, Calphalon®, Irwin®, Lenox®, Levolor®, Paper Mate®, Dymo®, Waterman®, Parker®, Goody®, BernzOmatic® and Amerock®. The company is headquartered in Atlanta, Ga.

This press release and additional information about Newell Rubbermaid are available on the company's Web site, [ www.newellrubbermaid.com ].