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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
_
|x| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended March 31, 1994
OR
_
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from _________________ to __________________
Commission File Number 1-4188
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RUBBERMAID INCORPORATED
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(Exact name of registrant as specified in its charter)
OHIO 34-0628700
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1147 AKRON ROAD, WOOSTER, OHIO 44691
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(Address of principal executive offices and zip code)
216-264-6464
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Common Shares, Par Value $1.00, Outstanding at March 31, 1994 -- 160,452,268
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PART I. FINANCIAL INFORMATION
<TABLE>
Item 1. Financial Statements
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
(Dollars in thousands except per share amounts)
<CAPTION>
Three Months Ended
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March 31, 1994 March 31, 1993
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<S> <C> <C>
Net sales $491,648 $483,677
Cost of sales 327,261 325,795
Selling, general, and administrative expenses 81,697 79,597
Other charges (credits), net:
Interest expense 1,862 2,036
Interest income (1,333) (1,352)
Miscellaneous, net (163) (1,898)
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366 (1,214)
-------- --------
Earnings before income taxes 82,324 79,499
Income taxes 31,703 29,883
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Net earnings $ 50,621 $ 49,616
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Net earnings per Common Share (note 2) $ .32 $ .31
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Dividends paid per Common Share (note 3) $ .1125 $ .0975
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<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<TABLE>
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share amounts)
<CAPTION>
March 31, 1994 Dec. 31, 1993
-------------- -------------
(Unaudited)
Assets
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<S> <C> <C>
Current assets:
Cash and cash equivalents $ 72,460 $ 127,802
Marketable securities (note 5) 40,854 66,260
Receivables, less allowance for doubtful accounts
of $12,530 in 1994 and $13,886 in 1993 410,125 322,284
Inventories (note 4) 304,559 303,437
Prepaid expenses 9,698 9,961
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Total current assets 837,696 829,744
Property, plant, and equipment, net 567,528 572,136
Intangible and other assets, net 115,689 111,244
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Total Assets $1,520,913 $1,513,124
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(Continued)
</TABLE>
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<TABLE>
RUBBERMAID INCORPORATED AND SUBSIDIARIES (Continued)
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share amounts)
<CAPTION>
March 31, 1994 Dec. 31, 1993
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(Unaudited)
Liabilities and Shareholders' Equity
------------------------------------
<S> <C> <C>
Current liabilities:
Notes payable $ 12,321 $ 12,783
Long-term debt, current 2,385 2,519
Payables 82,683 116,401
Accrued liabilities 125,890 127,611
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Total current liabilities 223,279 259,314
Other deferred liabilities 108,041 103,914
Long-term debt, non-current 20,844 19,414
Shareholders' equity :
Preferred stock, without par value.
Authorized 20,000,000 shares; none issued - -
Common Shares of $1 par value.
Authorized 400,000,000 shares; issued
160,485,997 shares in 1994 and 160,357,090
shares in 1993 160,486 160,357
Paid-in capital 13,889 7,810
Retained earnings 999,500 966,928
Foreign currency translation adjustment (5,126) (4,613)
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Total shareholders' equity 1,168,749 1,130,482
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Total Liabilities and Shareholders' Equity $1,520,913 $1,513,124
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<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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RUBBERMAID INCORPORATED AND SUBSIDIARIES
<TABLE>
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
( ) Denotes decrease in cash and cash equivalents
<CAPTION>
Three Months Ended
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March 31, 1994 March 31, 1993
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<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 50,621 $ 49,616
Adjustments to reconcile net earnings to net
cash from operating activities:
Depreciation 25,171 21,138
Changes in accounts receivable (88,814) (92,261)
Changes in inventories (1,122) 7,690
Changes in payables (33,718) 2,413
Changes in accrued liabilities (1,838) 25,896
Other, net 7,046 (604)
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Net cash from operating activities (42,654) 13,888
Cash flows from investing activities:
Purchase of marketable securities (51,107) -
Proceeds from sale of marketable securities 76,510 -
Additions to property, plant, and equipment (20,465) (19,182)
Other, net (411) (252)
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Net cash from investing activities 4,527 (19,434)
Cash flows from financing activities:
Cash dividends paid (18,049) (15,634)
Proceeds from long-term borrowings 1,863 -
Repayment of long-term debt (567) (3,831)
Other, net (462) (2,399)
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Net cash from financing activities (17,215) (21,864)
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Net change in cash and cash equivalent (55,342) (27,410)
Cash and cash equivalents at beginning of year 127,802 122,494
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Cash and cash equivalents at March 31 $ 72,460 $ 95,084
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Supplemental cash flow information:
Income taxes paid $ 7,368 $ 4,072
Interest paid $ 2,286 $ 2,067
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<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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RUBBERMAID INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
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(Dollars in thousands except per share amounts)
(1) In the opinion of management the information furnished herein
includes all the adjustments necessary for a fair presentation of the
results for the interim periods and all such adjustments are of a
normal recurring nature.
(2) Earnings per Common Share is computed based on average shares
outstanding of 160,413,253 and 160,281,347 for the respective 1994
and 1993 three-month periods.
(3) The actual number of shares outstanding on the respective record
dates is as follows:
<TABLE>
<CAPTION>
1994 1993
------------------------------------ -----------------------------------
Record Date No. Shares Record Date No. Shares
----------- ---------- ----------- ----------
<S> <C> <C> <C>
February 11 160,440,356 February 12 160,346,461
</TABLE>
<TABLE>
<CAPTION>
(4) A summary of inventories follows:
March 31, 1994 December 31, 1993
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<S> <C> <C>
FIFO Cost:
Raw materials $ 78,807 $ 75,978
Work-in-process 17,252 15,964
Finished goods 220,732 224,023
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316,791 315,965
Excess of FIFO over LIFO cost (12,232) (12,528)
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$304,559 $303,437
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</TABLE>
(5) Effective January 1, 1994, the Company adopted FAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."
There was no significant impact resulting from the adoption of the
statement. Management determines the appropriate classification of
debt securities at the time of purchase and reevaluates such
designation as of each balance sheet date.
The Company's marketable securities are classified as
available-for-sale and are carried at fair value which approximates
cost. The Company's portfolio at March 31, 1994, consists of debt
securities ($10,004), all of which mature in less than one year, and
equity securities ($30,850). In addition, at March 31, 1994, cash
equivalents include commercial paper ($38,827) maturing generally in
60 days or less.
(6) On April 4, 1994, the Company completed a previously announced joint
venture with Richell Corporation, a leading Japanese housewares
manufacturer. The Company holds a 40% equity interest in the
venture and intends to increase its holding to a majority position
by the end of 1994.
LIMITED REVIEW
--------------
The Company's independent public accountants have made a limited review of the
financial information furnished herein, in accordance with standards
established by the American Institute of Certified Public Accountants. See
Exhibit 15.
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RUBBERMAID INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- - ---------------------
Net sales for the three-month period ended March 31, 1994, increased 2% over
the first quarter of 1993. Unit sales were up 3% while price realization
decreased 1% as promotions were continued on certain key products. Sales were
adversely affected in January and February by the unusually harsh weather
conditions that prevailed across most of the country. The sales growth was
also restrained as several retailers delayed orders in an effort to minimize
inventories at their fiscal year-end in addition to their ongoing efforts to
control total inventory investment.
Net earnings for the first quarter of 1994 were 2% over the comparable 1993
period reflective of the lower-than-normal sales volume increase offset by
prudent cost control measures and productivity improvements.
Cost of sales as a percent of net sales for the first quarter of 1994 was lower
than the first quarter of 1993 by about one percentage point. Tight cost
controls, strong productivity improvements, and reduced LIFO expense more than
offset unabsorbed fixed manufacturing costs from manufacturing and distribution
facilities that were unable to be fully utilized due to the harsh weather
conditions.
Selling, general, and administrative expenses for the first quarter as a
percent to net sales were slightly higher than the same quarter last year.
Despite the restrained sales growth, expenditures for both research and
development and advertising and sales promotion were continued at planned
levels as an investment in future business. The increase in these
expenditures, however, was partially offset by the results of contingency cost
controls over discretionary operating expenses.
As a result of the Omnibus Budget Reconciliation Act of 1993 signed into law in
August 1993, the effective tax rate rose to 38.5% for the first quarter of 1994
compared with 37.6% in 1993.
Changes in Financial Condition
- - ------------------------------
During the first quarter of 1994, cash and cash equivalents decreased by $55.3
million as cash used by operations of $42.6 million and cash used for financing
activities of $17.2 million exceeded cash generated from investing activities
of $4.5 million. Cash used by operations included net income and non-cash
depreciation charges that were more than offset by cash used for higher
receivables and reduced payables. The increase in receivables was primarily
due to a larger portion of the quarter's sales coming in March because of
weather related issues earlier in the quarter. The cash generated from
investing activities was the result of proceeds from the sale of marketable
securities exceeding cash used for the purchase of marketable securities and
new investments in property, plant, and equipment. Cash used for financing
activities was primarily cash dividends paid to shareholders.
Other
- - -----
On April 4, 1994, the Company completed a previously announced joint venture
with Richell Corporation, a leading Japanese housewares manufacturer. The
Company holds a 40% equity interest in the venture and intends to increase its
holding to a majority position by the end of 1994.
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<PAGE> 8
PART II. OTHER INFORMATION
Item 6. Exhibit and Reports on Form 8-K.
(a) Exhibit 15. Letter regarding unaudited interim financial
information.
(b) There were no reports on Form 8-K for the three months ended
March 31, 1994.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RUBBERMAID INCORPORATED
DATE: May 10, 1994 /s/ James A. Morgan
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James A. Morgan
Senior Vice President
General Counsel and Secretary
DATE: May 10, 1994 /s/ John L. Theler
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John L. Theler
Vice President & Corporate Controller
(Chief Accounting Officer)
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Exhibit 15
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Rubbermaid Incorporated
We have reviewed the accompanying condensed consolidated balance sheet of
Rubbermaid Incorporated and subsidiaries as of March 31, 1994, and the related
condensed consolidated statements of earnings and cash flows for the
three-month periods ended March 31, 1994 and 1993. These condensed consolidated
financial statements are the responsibility of the company's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Rubbermaid Incorporated and
subsidiaries as of December 31, 1993 and the related consolidated statements of
earnings, cash flows and shareholders' equity for the year then ended (not
presented herein); and in our report dated February 1, 1994, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1993, is fairly presented in all material
respects in relation to the consolidated balance sheet from which it has been
derived.
/s/ KPMG Peat Marwick
Cleveland, Ohio
April 12, 1994
