<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended DECEMBER 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
RUBBERMAID INCORPORATED
-----------------------
(Exact name of Registrant as specified in its charter)
OHIO 34-0628700
---- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1147 AKRON ROAD, WOOSTER, OHIO 44691-6000
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code - 216-264-6464
------------
Securities registered pursuant to Section 12(b) of the act:
Title of each class Name of each exchange on which registered
COMMON, PAR VALUE $1.00 PER SHARE NEW YORK STOCK EXCHANGE
--------------------------------- -----------------------
Securities registered pursuant to Section 12(g) of the act: NONE
----
Indicate by check mark whether 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
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
Common Shares, Par Value $1.00, Outstanding at January 31, 1995 -- 160,965,042.
Aggregate market value of such shares held by non-affiliates of Registrant as
of that date -- $4,686,567,000.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Proxy Statement for the Annual Meeting of Shareholders
on April 25, 1995 -- Part III
Consolidated financial statements and other data from Registrant's 1994 Annual
Report to Shareholders -- Parts I and II
<PAGE> 2
PART I
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ITEM 1. BUSINESS
-------------------------
General
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Registrant was incorporated under the laws of the State of
Ohio in 1920. Registrant and its subsidiaries operate in one industry segment
which consists of the manufacture, marketing, selling, and distribution of
plastic and rubber products consumed primarily by the end-user in the consumer,
commercial, industrial, agricultural, office, marine, automotive accessories,
contract, and juvenile markets. They include such items as housewares; home
horticulture products; decorative coverings; leisure and recreational products;
infant and children's toys; furniture, office, and industrial products; and
products used in food service, health care, and sanitary maintenance.
Registrant's products are distributed through its own sales personnel and
manufacturers' agents to a variety of retailers and wholesalers, including mass
merchandisers, toy stores, catalog showrooms, and distributors serving
institutional markets.
Registrant's basic philosophy is to offer products of high
value and quality to the user. Value is that best combination of price,
quality, service, timeliness and innovation as perceived by consumers and
customers. The Corporate objectives, since the late-1970's, have been, and
continue to be, to increase sales, earnings, and earnings per share 15% per
year, compounded annually. This growth is expected to come from a combination
of maximizing core businesses through product line and market extensions, new
product introductions, global expansion of the business, and selective
acquisitions.
Registrant's primary focus is to achieve its earnings and
earnings per share growth objective of 15%, compounded annually. Initially,
the sales growth objective was based on certain fundamental assumptions: an
increase of 3-5% in U. S. Gross Domestic Product (GDP); inflation of 2-4% in
Registrant's pricing; and, unit volume growth averaging around 11%. Since
Gross Domestic Product increases have been below this assumption and
Registrant's pricing was essentially flat for the past several years, sales
growth was less than the 15% targeted increase although Registrant was
successful in implementing cost reductions and productivity improvement
programs to leverage the sales growth towards the earnings goals.
In 1994, in recognition of this changed macro-economic
environment, Registrant announced two new strategic initiatives aimed at
achieving above-GDP growth to reach its primary objectives of 15% sales and
earnings growth; this, despite a forecast of price inflation averaging only
1-2% over the next five years. The first initiative is a value improvement
process aimed at increasing value and productivity. The second initiative is
to invest those value improvements and cost savings to accelerate Registrant's
worldwide growth enhancements of accelerated new product introductions, quicker
entry into new markets, increased competitiveness, new business development,
and the globalization of core businesses.
Among the businesses acquired by Registrant are The Little
Tikes Company (1984); Gott Corporation (1985); Seco Industries, Inc. (1986);
MicroComputer Accessories, Inc. (1986); Viking Brush Limited (1987); EWU (AG)
(1990); Eldon Industries, Inc. (1990); CIPSA (1992); Iron Mountain Forge
Corporation (1992); Empire Brushes, Inc. (1994); Carex Inc. (1994); and
Glenwood Systems Pty. Ltd (Ausplay)(1994).
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The companies acquired by Registrant shared many common
characteristics with Registrant including a high-quality image, emphasis on new
product development and customer service, similar materials and/or
manufacturing processes, and similar distribution channels.
CIPSA, the leading plastic housewares manufacturer and
marketer in Mexico operates as Rubbermaid de Mexico and is a part of the Home
Products Division.
Empire Brushes, Inc., now Rubbermaid Cleaning Products Inc.,
which reports to the Home Products Division is a leading manufacturer and
marketer of brushes, brooms, and mops for home and commercial use resulting
from the integration of Empire Brushes' products and facilities with
Registrant's existing household cleaning products business.
In 1994, Registrant sold its 40% interest in the Curver
Rubbermaid European housewares joint venture to DSM who held the remaining 60%.
On March 1, 1995, Registrant acquired Injectaplastic S.A., a French
manufacturer and marketer of plastic housewares and other products which will
provide a vehicle for re-entry into the European housewares market.
Iron Mountain Forge Corporation, which reports to The Little
Tikes Company, is a leading manufacturer and marketer of commercial playground
equipment. Registrant expects that the synergy with Little Tikes will increase
Iron Mountain Forge's strengths in the parks, schools and recreational areas
and accelerate the development of the attractive growing child care market.
Ausplay, a leading marketer and designer of commercial playground equipment in
Australia expands the geographic distribution of commercial play structures and
will enhance future growth capabilities in additional geographic markets and
new products.
Carex is a growing manufacturer and marketer of bath safety
products, personal care accessories, daily living aids, and other products
designed to assist the aging and physically challenged. Registrant expects to
stimulate further sales growth by integrating Carex to enhance product
development and product line offerings.
In April 1994, Registrant completed a joint venture with
Richell Corporation, a leading Japanese housewares manufacturer. The joint
venture, Rubbermaid Japan Inc., develops, markets, and sells housewares,
leisure, and specialty products for the Japanese market. Registrant initially
held a 40% equity interest in the venture and, in October 1994, exercised an
option to increase its equity interest to 51%.
In January, 1995, Registrant formed Royal Rubbermaid
Structures Ltd., a joint venture with Royal Plastics Group Limited of Canada,
for the manufacture and marketing of modular, plastic components, and kits for
small structures, such as storage buildings and sheds, in consumer, industrial,
commercial, and agricultural markets. Each partner owns 50% of the joint
venture. Sale of joint venture products are expected to commence by mid-year
1995.
Additional expansion has come from new operations formed from
existing businesses to focus on specific segments of their markets.
Rubbermaid Specialty Products Inc. was formed in 1988 to
consolidate seasonal products with similar channels of distribution into one
operation. The GOTT line of insulated products and BLUE ICE refreezable ice
substitute were also integrated into this business and rebranded with the
Rubbermaid name. This creates the opportunity to utilize seasonal product
synergies which, coupled with the Rubbermaid brand, increase critical marketing
mass at the trade level. In 1994, the casual outdoor resin furniture business
of Specialty Products, including the
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manufacturing facility in Stanley, North Carolina, was sold. This will allow
Specialty Products to focus its resources and management more effectively on
its core competencies.
During 1988 Registrant established an Office Products Division
which combined the activities of home office products from the Home Products
Division, commercial office products from Rubbermaid Commercial Products Inc.,
and MicroComputer Accessories, Inc. The Division enhanced service for
traditional customers while capitalizing on the emerging distribution trends in
the industry with concentrated marketing and distribution and a complete and
diversified line of products. Early in 1991, the Office Products Division and
Eldon Industries, Inc., were combined to form Rubbermaid Office Products Inc.,
located in Maryville, Tennessee, to capitalize on their many synergies and to
improve support and service to customers. During 1994, Registrant sold the
Davson Division of Rubbermaid Office Products Inc. because the Davson product
line was not considered a long term strategic fit for the business and merged
the MicroComputer Accessories, Inc. company into Rubbermaid Office Products
Inc.
<TABLE>
The percent of net sales contributed by each of the consumer
and institutional classes of products for the three years ended December 31,
1994, was as follows:
NET SALES
---------
<CAPTION>
Consumer Institutional
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<S> <C> <C>
1994 79% 21%
1993 78% 22%
1992 77% 23%
</TABLE>
Raw Materials
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The principal raw materials used in the manufacture of
Registrant's products are various plastic resins and synthetic rubber (all of
which are derivatives of petroleum or natural gas liquids) and color
concentrates. All of these items are available from numerous competitive
sources. Even though a significant portion of Registrant's raw materials are
derivatives of natural gas, the increase in crude oil costs during 1990
resulting from the Persian Gulf crisis was reflected in Registrant's costs of
raw materials. As crude oil costs returned to lower levels, so did resin
prices. From 1990 until 1994, resin costs remained at a more stable
supply/demand level. In 1994, resin costs began to escalate rapidly late in
the year, as demand for resin increased and supply tightened. Registrant
expects to obtain adequate resins for its needs and has accelerated its
continuing program of substituting available or reformulated resins where
practical and consistent with quality considerations.
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Patents and Trademarks
----------------------
There are no patents or licenses considered material to the
business. Registrant is of the opinion that through sustained advertising and
use, the trademark RUBBERMAID has become of value in the identification and
acceptance of its products, especially in North America. In addition,
Registrant has many well-known brands such as CON-TACT (pressure sensitive
decorative coverings), ELDON (office products), LITTLE TIKES (toys), and SECO
(floor maintenance products) that compete in domestic and international
markets.
Seasonality
-----------
Historically, the year-end holiday season records the highest
sales volume for the toy industry; however, the Little Tikes spring and summer
products have served to more evenly balance monthly shipments. Rubbermaid
Specialty Products concentrates its efforts on product categories of a seasonal
nature, including insulated products, planters, and bird feeders. Insulated
product sales are highest during the first six months of the year, and
inventories are built during the other periods of the year in order to more
easily accommodate demand. No material portion of Registrant's other
businesses is of a highly seasonal nature.
Working Capital
---------------
Working capital requirements of the business increase
generally as sales volumes increase. There are normally no unusual working
capital needs existent at any one time in the ordinary course of business.
Dating programs offering extended terms are carried on by the various operating
companies as part of their normal marketing activities.
Customers
---------
Sales are made to a broad range of customers, one of which
accounted for 15%, 14%, and 13% of net sales in 1994, 1993, and 1992,
respectively. Due in part to Registrant's perception that consumers are loyal
to Registrant's brand names, Registrant does not believe that the loss of any
one customer would have a materially adverse effect on its business.
Backlog
-------
Registrant produces to and sells from inventory for the
majority of its products. The amount of backlog existent at any one time is
not a significant factor in the business.
Competition
-----------
All markets served by Registrant and its subsidiaries are
competitive as to price, service, and product performance. Most of
Registrant's products compete not only with those of other manufacturers using
similar raw materials but also with products manufactured from other materials.
Many of the competitor companies are either closely held or are divisions of
larger entities. Registrant is recognized as a strong competitive factor in
the marketplace, but there is no reliable quantitative manner in which the
aggregate competitive position of Registrant can be determined.
4
<PAGE> 6
Research and Development
------------------------
Registrant expended approximately $27,747,000, $28,202,000,
and $25,951,000 during 1994, 1993, and 1992, respectively, on research
activities related to product, process and materials development, and mold
design. These costs are charged to operations as incurred.
Environmental Matters
---------------------
Compliance with Federal, State, and local provisions, which
have been enacted or adopted regulating the discharge of materials into the
environment, or otherwise relating to the protection of the environment, is not
expected to have an adverse effect upon the capital expenditures, earnings, or
competitive position of Registrant and its subsidiaries. Reference is made to
page 35 of the 1994 Annual Report to Shareholders, which is contained in
Exhibit 13 hereof, concerning further information regarding Registrant's
Environmental Program.
Employees
---------
The average number of persons employed by Registrant and its
subsidiaries during 1994 was 12,939.
Foreign Operations
------------------
Reference is made to page 33 of the 1994 Annual Report to
Shareholders, which is contained in Exhibit 13 hereof, for information
concerning Registrant's operations in different geographical areas. Export
sales are not material and are, therefore, not separately stated.
To accelerate international growth, foreign businesses were
repositioned in January 1990 to provide direct line reporting relationships
with their counterpart domestic operation. The management of Rubbermaid
businesses around the world, plus the coordination of sales in foreign markets,
are the responsibility of the respective core operating companies. The
Corporate role is to develop and coordinate with the core businesses strategic
plans, priorities, and global operations. To improve efficiencies in the new
regions being developed, staff functions are centralized, while the line
functions are decentralized to each core business.
Registrant uses a variety of approaches to expand and develop
international markets. To initiate market development in certain geographic
areas, particularly new and developing markets, emphasis is placed on exporting
from existing manufacturing facilities. Where market size and economics
justify, manufacturing facilities are established - for example, Canada, Europe
and Mexico. In markets where it is deemed appropriate to gain immediate access
to manufacturing facilities or distribution, Registrant may make selective
acquisitions. Licensing arrangements are used in those markets where the costs
of importing are prohibitive and where Company-owned manufacturing is not
economically justified. In addition, Registrant may use a combination of any
or all of these approaches. Today, Rubbermaid products are distributed
worldwide.
No greater known significant risk is attendant to the foreign
business than to the domestic business conducted by Registrant and its
subsidiaries.
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<PAGE> 7
ITEM 2. PROPERTIES
---------------------------
Registrant and its subsidiaries have manufacturing and/or
warehousing locations in 14 states and 9 foreign countries.
Major plant and warehouse locations of Registrant are as
follows:
Home Products Division - Wooster and Akron, Ohio;
Phoenix, Arizona; Sparks, Nevada (leased); Cortland,
New York; Greenville, Robersonville, and Statesville,
North Carolina; Cleburne and Greenville, Texas;
Suffolk, Virginia (leased); Mississauga, Ontario and
Montreal, Quebec (leased), Canada; Toyama, Japan; and
Mexico City, Mexico.
Rubbermaid Specialty Products Inc. - Goddard and
Winfield, Kansas.
The Little Tikes Company - Hudson and Sebring, Ohio;
City of Industry, California (leased); Aurora and
Farmington, Missouri; Shippensburg, Pennsylvania;
Melbourne, Australia (leased); Guelph, Ontario,
Canada (leased); Dublin, Ireland; and Differdange,
Luxembourg.
Rubbermaid Commercial Products Inc. - Winchester,
Virginia; Phoenix, Arizona (leased); Centerville,
Iowa; Cleveland, Tennessee; Birmingham, England
(leased); and Dietzenbach, Germany (leased).
Rubbermaid Office Products Inc. - Maryville,
Tennessee; Carson, California (leased); Silverwater,
Australia (leased); Markham, Ontario, Canada
(leased); Shefford, England (leased); and Coignieres,
France (leased).
Carex Inc. - Newark, New Jersey (leased)
Certain portions of the Cortland, New York facility are leased
from Industrial Development Authorities pursuant to industrial development bond
financing; however, Registrant will own the facilities upon repayment of such
financing. Certain other facilities are subject to mortgages securing
industrial revenue bond financing.
The properties and facilities of Registrant and its
subsidiaries are modern and suitable to the requirements of the business. On
an overall basis, these facilities, with certain exceptions due primarily to
general economic slowdowns, have been operated near capacity. As a general
rule, continuing capital expenditures are required each year to provide the
necessary plant, equipment, and tooling to support the growth of the business.
To supplement its own facilities, Registrant has followed a practice of
sourcing a portion of its production and warehousing requirements from third
parties.
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<PAGE> 8
ITEM 3. LEGAL PROCEEDINGS
----------------------------------
There are no material pending legal proceedings to which
Registrant or any of its subsidiaries is a party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
--------------------------------------------------------------------
During the fourth quarter of the fiscal year covered by this
Form 10-K, no matter was submitted to a vote of Registrant's shareholders,
through the solicitation of proxies or otherwise.
<TABLE>
Executive Officers of Registrant
--------------------------------
<CAPTION>
Employed By
-----------
Registrant
----------
Name Age Since Positions and Offices Held
---- --- ----- --------------------------
<S> <C> <C> <C>
Wolfgang R. Schmitt 51 1966 Chairman of the Board and
Chief Executive Officer
Mr. Schmitt has been Chairman since September 1993
and Chief Executive Officer since November 1992;
previously from November 1992, Co-Chairman. From May
1991, President and Chief Operating Officer,
Executive Vice President (1987-1991) and President of
the Home Products Division (1984-1990). Employed by
Registrant in various marketing and research and
development assignments since 1966.
Charles A. Carroll 45 1971 President and
Chief Operating Officer
Mr. Carroll was elected President and Chief Operating
Officer of Registrant in September 1993. From 1990,
he served as President and General Manager of the
Home Products Division and previously from 1988,
President and General Manager of Rubbermaid Specialty
Products. He has been employed by Registrant in
various sales and management capacities since 1971.
</TABLE>
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<PAGE> 9
<TABLE>
Executive Officers of Registrant
--------------------------------
<CAPTION>
Employed By
-----------
Registrant
----------
Name Age Since Positions and Offices Held
---- --- ----- --------------------------
<S> <C> <C> <C>
Richard D. Gates 52 1973 Senior Vice President,
Business Development and Investor Relations
Mr. Gates joined Registrant as Assistant Controller
in 1973 and was elected Assistant Treasurer in 1977,
Treasurer in 1979, and Vice President in 1980. He
was named Senior Vice President, Investor Relations
and Corporate Communications in 1991 and to his
present position in 1992.
Lucius W. Hoffa, Jr. 51 1967 Senior Vice President,
Information Services
Mr. Hoffa was named Senior Vice President,
Information Services in January 1995 and was
previously Vice President of Management Information
Services of the Home Products Division from 1988. He
has been employed by Registrant since 1967 in a
variety of management information positions.
James A. Morgan 59 1974 Senior Vice President,
General Counsel and Secretary
Mr. Morgan joined Registrant as Assistant Secretary
and Counsel in February 1974 and was elected
Secretary in 1977, Vice President in 1979, Senior
Vice President in 1983, and General Counsel in 1988.
Michael E. Naylor 56 1992 Senior Vice President,
Operations
Mr. Naylor joined Registrant as Senior Vice
President, Technology and Environment in August 1992,
and was named Senior Vice President, Operations in
1994. He was previously with General Motors
Corporation for 25 years and most recently served as
General Director of the Military Vehicle Business.
In previous assignments he was Executive in charge of
Corporate Strategic Planning and Manager of Research
and Development for the Transportation Systems
Division.
</TABLE>
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<TABLE>
Executive Officers of Registrant
--------------------------------
<CAPTION>
Employed By
-----------
Registrant
----------
Name Age Since Positions and Offices Held
---- --- ----- --------------------------
<S> <C> <C> <C>
David L. Robertson 49 1994 Senior Vice President,
Human Resources
Mr. Robertson joined Registrant in April, 1994, as
Senior Vice President, Human Resources. Previously
and from 1982, he was Vice President, Human Resources
for Hillenbrand Industries.
George C. Weigand 43 1984 Senior Vice President
and Chief Financial Officer
Mr. Weigand became Senior Vice President and Chief
Financial Officer in March, 1994, having previously
served as Vice President and Corporate controller
since 1992, and Vice President, Auditing and Taxes
from 1990. Previously, he was Manager of Auditing
and Taxes from 1987 and prior, thereto, Manager of
Auditing.
John W. Dean, III 39 1988 Vice President and
Treasurer
Mr. Dean joined Registrant as Assistant Treasurer in
1988 and was elected Vice President and Treasurer in
1991. He was previously Director of Banking and
Finance with The Uniroyal Goodrich Tire Company.
John L. Theler 47 1992 Vice President and
Corporate Controller
Mr. Theler joined Registrant in 1992 as Vice
President of Finance and Controller for the Home
Products Division and was named Vice President and
Corporate Controller in 1994. He was previously with
the General Electric Company from 1971, where he
served in a number of senior financial management
positions.
</TABLE>
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<TABLE>
Executive Officers of Registrant
--------------------------------
<CAPTION>
Employed By
-----------
Registrant
----------
Name Age Since Positions and Offices Held
---- --- ----- --------------------------
<S> <C> <C> <C>
Fred S. Grunewald 44 1994 President and General Manager,
Home Products Division
Mr. Grunewald joined Registrant in May 1994 as
President and General Manager of the Home Products
Division. He was previously, from 1992, Vice
President of Marketing and Engineering of the
Household Products Division of Black & Decker
Corporation which he joined in 1988 as Vice President
Marketing for its International Group and was named
President and General Manager of the Global Cordless
Group in 1990.
Gary E. Kleinjan 46 1980 President and General Manager,
The Little Tikes Company
Mr. Kleinjan was appointed President and General
Manager of The Little Tikes Company in September 1994
having previously served as President and General
Manager of Rubbermaid Office Products Inc. from March
1994. Prior thereto and from August 1992, he was
Vice President and General Manager of MicroComputer
Accessories, Inc. Previously and from 1988, he was
Vice President, Sales of the Home Products Division
where he held various sales assignments since joining
Registrant in 1980.
Gary F. Mattison 54 1967 President and General Manager,
Rubbermaid Specialty Products Inc.
Mr. Mattison was appointed President and General
Manager of Rubbermaid Specialty Products in June
1993. Prior thereto and from 1979, he was Vice
President, Manufacturing for the Home Products
Division. He has been employed by Registrant in
various manufacturing assignments since 1967.
</TABLE>
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<TABLE>
Executive Officers of Registrant
--------------------------------
<CAPTION>
Employed By
-----------
Registrant
----------
Name Age Since Positions and Offices Held
---- --- ----- --------------------------
<S> <C> <C> <C>
Joseph M. Ramos 53 1992 President and General Manager,
Rubbermaid Commercial Products Inc.
Mr. Ramos joined Rubbermaid Commercial Products on
January 1, 1992 as President and General Manager. He
was previously employed with 3M Company for 25 years
in various domestic and international sales,
marketing, and general management assignments.
Carol S. Troyer 51 1962 President and General Manager,
Rubbermaid Office Products Inc.
Ms. Troyer was named President and General Manager of
Rubbermaid Office Products Inc. in 1994 having served
previously from 1992 as President and General Manager
of Rubbermaid Canada Inc. From 1991, she was Vice
President Invincible Customer Services of the Home
Products Division and prior thereto Eastern Regional
Sales Vice President for the Division.
</TABLE>
All executive officers who are officers of Registrant are elected for a
one-year term.
PART II
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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
------------------------------------------------------------------------------
MATTERS
-------
Registrant's Common Shares are traded on the New York Stock
Exchange under the symbol RBD. As of January 31, 1995, Registrant had
approximately 31,000 shareholders of record. Reference is made to page 33 of
the 1994 Annual Report to Shareholders, which is contained in Exhibit 13
hereof, for information concerning sales prices for and dividends paid on
Registrant's Common Shares during 1994 and 1993.
ITEM 6. SELECTED FINANCIAL DATA
----------------------------------------
Reference is made to pages 36 and 37 of the 1994 Annual Report
to Shareholders, which are contained in Exhibit 13 hereof, which pages include
the selected financial data for the five years ended December 31, 1994 as part
of Registrant's "Consolidated Financial Summary", which information is
incorporated by reference herein.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
----------------------------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
Reference is made to pages 34 and 35 of the 1994 Annual Report
to Shareholders, which are contained in Exhibit 13 hereto, which include
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" for the years 1994, 1993, and 1992, which information is
incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
------------------------------------------------------------
Reference is made to pages 25 through 33 of the 1994 Annual
Report to Shareholders, which are contained in Exhibit 13 hereto, which include
the consolidated financial statements and the notes thereto as of December 31,
1994 and 1993, and for each of the years in the three year period ended
December 31, 1994, together with the independent auditors' report thereon of
KPMG Peat Marwick LLP dated January 31, 1995, which information is incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
----------------------------------------------------------------------------
AND FINANCIAL DISCLOSURE
------------------------
Registrant has not changed its independent auditors, and there
have been no reportable disagreements with such auditors regarding accounting
principles or practices or financial disclosure matters.
PART III
--------
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
---------------------------------------------------------------
Information regarding the directors of Registrant is included
under the caption "Information as to Board of Directors and Nominees" in
Registrant's proxy statement dated March 10, 1995, and is incorporated herein
by reference. Information regarding the executive officers of Registrant is
included under a separate caption in Part I hereof and is incorporated by
reference, in accordance with General Instruction G(3) to Form 10-K and
Instruction 3 to Item 401(b) of Regulation S-K.
ITEM 11. EXECUTIVE COMPENSATION
---------------------------------------
Information regarding the above is included under the caption
"Executive Compensation" in Registrant's proxy statement dated March 10, 1995,
and is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
-------------------------------------------------------------------------------
Information regarding the above is included under the captions
"Security Ownership of Certain Beneficial Owners" and "Ownership By Management"
in Registrant's proxy statement dated March 10, 1995, and is incorporated
herein by reference.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
---------------------------------------------------------------
Information regarding the above is included under the caption
"Security Ownership of Certain Beneficial Owners" in Registrant's proxy
statement dated March 10, 1995, and is incorporated herein by reference.
PART IV
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
-----------------------------------------------------------------------------
8-K
---
(a) The following documents are filed as part of this Form 10-K
Report.
(1) The financial statements referred to in Item 8 above
which are contained in Exhibit 13 hereto and which
are incorporated by reference thereto.
(2) Exhibits 10(a) through 10(f) to this Item 14
constitute each executive compensation plan and
arrangement of Registrant.
All schedules have been omitted because the material is not
applicable, or is not required, or because the required information is shown in
the consolidated financial statements or in the notes thereto, or is not
otherwise material to the consolidated financial statements.
(b) There were no reports on Form 8-K filed for the quarter ended
December 31, 1994.
(c) Exhibits (numbered in accordance with Item 601 of Regulation
S-K).
(3a, 4a) Amended Articles of Incorporation of Rubbermaid
Incorporated. Incorporated by reference from
Exhibits 3a and 4a to Form 10-K for the year ended
December 31, 1992.
(3b, 4b) Regulations of Rubbermaid Incorporated.
Incorporated by reference from Exhibits 3b and 4b
to Form 10-K for the year ended December 31, 1992.
(4c) Amended and Restated Rights Agreement between
Rubbermaid Incorporated and The First National
Bank of Boston. Incorporated by reference from
Exhibit 4 to Form 8 filed with the Commission on
October 26, 1989.
(10a) Rubbermaid Incorporated Management Incentive Plan.
Incorporated by reference from Exhibit 10a to Form
10-K for the year ended December 31, 1992.
(10b) Rubbermaid Incorporated Amended 1989 Restricted
Stock Incentive and Option Plan. Incorporated by
reference from Exhibit A to Proxy Statement for
April 26, 1994 Annual Meeting of Shareholders.
(10c) Rubbermaid Incorporated Supplemental Executive
Retirement Plan, as amended. Incorporated by
reference from Exhibit 10(d) to Form 10-K for the
year ended December 31, 1993.
13
<PAGE> 15
(10d) Rubbermaid Incorporated Supplemental Retirement
Plan. Incorporated by reference from Exhibit
10(e) to Form 10-K for the year ended December 31,
1991.
(10e) Change-Of-Control Employment Agreements -
Identical agreements have been entered into with
Charles A. Carroll, Richard D. Gates, Fred S.
Grunewald, Lucius W. Hoffa, Jr., Gary E. Kleinjan,
Gary F. Mattison, James A. Morgan, Michael E.
Naylor, Joseph M. Ramos, David L. Robertson,
Wolfgang R. Schmitt, Carol S. Troyer, and George
C. Weigand. Incorporated by reference from
Exhibit 10(i) to Form 10-K for the year ended
December 31, 1991.
(10f) Rubbermaid Incorporated 1993 Deferred Compensation
Plan. Incorporated by reference to Exhibit A
to Proxy Statement for April 27, 1993 Annual
Meeting of Shareholders.
(13) Consolidated financial statements and other data
from pages 25 to 37 of 1994 Annual Report to
Shareholders.
(21) Subsidiaries of Registrant.
(23) Consent of KPMG Peat Marwick LLP.
(24) Power of Attorney.
(27) Financial Data Schedule.
14
<PAGE> 16
SIGNATURE
---------
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: March 24, 1995 RUBBERMAID INCORPORATED
By: /s/Wolfgang R. Schmitt
-------------------------------
Wolfgang R. Schmitt
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
Registrant and in the capacities indicated on March 24, 1995.
/s/ Wolfgang R. Schmitt Director, Chairman of the Board and
---------------------------------- Chief Executive Officer
Wolfgang R. Schmitt
/s/ George C. Weigand Senior Vice President and
---------------------------------- Chief Financial Officer
George C. Weigand
/s/ John L. Theler Vice President and Corporate
---------------------------------- Controller
John L. Theler (Principal Accounting Officer)
Tom H. Barrett Director
Charles A. Carroll Director
Zoe Coulson Director
Robert O. Ebert Director
Stanley C. Gault Director
Robert M. Gerrity Director By: /s/ James A. Morgan
--------------------------
Karen N. Horn Director James A. Morgan
Attorney-in-Fact
William D. Marohn Director
Steven A. Minter Director
Jan Nicholson Director
Paul G. Schloemer Director
15
<PAGE> 17
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit Number Exhibit Description
-------------- -------------------
<S> <C>
(3a, 4a) Amended Articles of Incorporation of Rubbermaid Incorporated. Incorporated by
reference from Exhibits 3a and 4a to Form 10-K for the year ended December 31, 1992.
(3b, 4b) Regulations of Rubbermaid Incorporated. Incorporated by reference from Exhibits 3b
and 4b to Form 10-K for the year ended December 31, 1992.
(4c) Amended and Restated Rights Agreement between Rubbermaid Incorporated and The First
National Bank of Boston. Incorporated by reference from Exhibit 4 to Form 8 filed
with the Commission on October 26, 1989.
(10a) Rubbermaid Incorporated Management Incentive Plan. Incorporated by reference from
Exhibit 10(a) to Form 10-K for the year ended December 31, 1992.
(10b) Rubbermaid Incorporated Amended 1989 Restricted Stock Incentive and Option Plan.
Incorporated by reference from Exhibit A to Proxy Statement for April 26, 1994 Annual
Meeting of Shareholders.
(10c) Rubbermaid Incorporated Supplemental Executive Retirement Plan, as amended.
Incorporated by reference from Exhibit 10(d) to Form 10-K for the year ended December
31, 1993.
(10d) Rubbermaid Incorporated Supplemental Retirement Plan. Incorporated by reference from
Exhibit 10(e) to Form 10-K for the year ended December 31, 1991.
(10e) Change-Of-Control Employment Agreements - Identical agreements have been entered into
with Charles A. Carroll, Richard D. Gates, Fred S. Grunewald, Lucius W. Hoffa, Jr.,
Gary E. Kleinjan, Gary F. Mattison, James A. Morgan, Michael E. Naylor, Joseph M.
Ramos, David L. Robertson, Wolfgang R. Schmitt, Carol S. Troyer, and George C.
Weigand. Incorporated by reference from Exhibit 10(i) to Form 10-K for the year ended
December 31, 1991.
</TABLE>
<PAGE> 18
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
Exhibit Number Exhibit Description
-------------- -------------------
<S> <C>
(10f) Rubbermaid Incorporated 1993 Deferred Compensation Plan. Incorporated by reference to
Exhibit A to Proxy Statement for April 27, 1993 Annual Meeting of Shareholders.
(13) Consolidated financial statements and other data from pages 25 to 37 of 1994 Annual
Report to Shareholders.
(21) Subsidiaries of Registrant.
(23) Consent of KPMG Peat Marwick LLP.
(24) Power of Attorney.
(27) Financial Data Schedule.
</TABLE>
<PAGE> 1
Exhibit 13
----------
MANAGEMENT'S REPORT
The integrity and objectivity of the consolidated financial statements and
other data included in this Annual Report are the responsibility of Rubbermaid
management and the Board of Directors. The consolidated financial statements
are prepared in accordance with generally accepted accounting principles and,
where necessary, include estimates based on management's judgment. Our external
auditors conducted an audit of the consolidated financial statements and
reported that the statements present fairly, in all material respects, the
Company's financial position, results of operations, and cash flows.
Management has established a system of internal controls to provide reasonable
assurance that financial information is reliable and assets are properly
safeguarded. The system of internal controls is maintained by selecting and
training qualified associates and by establishing and implementing sound
accounting and business policies, and procedures. Rubbermaid utilizes internal
auditors to monitor and evaluate the effectiveness of such internal controls,
policies, and procedures.
The Audit and Environmental Committee of the Board of Directors, comprised
entirely of outside directors, monitors and reviews the Company's financial
reporting and accounting practices by meeting with management, the internal
auditors, and the external auditors. The internal and external auditors have
unrestricted access to the Committee.
/s/Wolfgang R. Schmitt
WOLFGANG R. SCHMITT
Chairman of the Board and
Chief Executive Officer
/s/George C. Weigand
GEORGE C. WEIGAND
Senior Vice President and
Chief Financial Officer
/s/John L. Theler
JOHN L. THELER
Vice President and
Corporate Controller
INDEPENDENT AUDITORS' REPORT
SHAREHOLDERS AND BOARD OF DIRECTORS
RUBBERMAID INCORPORATED:
We have audited the accompanying consolidated balance sheets of Rubbermaid
Incorporated and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of earnings, cash flows, and shareholders' equity for
each of the years in the three-year period ended December 31, 1994. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Rubbermaid
Incorporated and subsidiaries as of December 31, 1994 and 1993, and the results
of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1994, in conformity with generally
accepted accounting principles.
/s/ KPMG Peat Marwick LLP
KPMG PEAT MARWICK LLP
Cleveland, Ohio
January 31, 1995
25
<PAGE> 2
<TABLE>
CONSOLIDATED STATEMENT OF EARNINGS
(Dollars in thousands except per share amounts)
<CAPTION>
Years Ended December 31 1994 1993 1992
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $2,169,354 $1,960,207 $1,805,332
Cost of sales 1,465,586 1,285,949 1,200,651
Selling, general, and administrative expenses 347,915 328,741 310,410
Realignment costs (note 3) - - 27,500
Other charges (credits), net:
Interest expense 7,198 7,787 7,561
Interest income (5,066) (4,921) (4,923)
Miscellaneous, net (13,430) 768 (2,700)
------------------------------------------------------------------------------------------
(11,298) 3,634 (62)
------------------------------------------------------------------------------------------
Earnings before income taxes and
cumulative effect of changes in
accounting principles 367,151 341,883 266,833
------------------------------------------------------------------------------------------
Income taxes (note 12) 139,025 130,470 99,907
------------------------------------------------------------------------------------------
Earnings before cumulative effect of
changes in accounting principles 228,126 211,413 166,926
Cumulative effect of changes in accounting
principles (note 2):
Postretirement benefits - - (20,112)
Other - - 17,281
------------------------------------------------------------------------------------------
NET EARNINGS $ 228,126 $ 211,413 $ 164,095
==========================================================================================
Earnings per Common Share before
cumulative effect of changes in
accounting principles $ 1.42 $ 1.32 $ 1.04
Cumulative effect of changes in accounting
principles:
Postretirement benefits - - (.13)
Other - - .11
------------------------------------------------------------------------------------------
NET EARNINGS PER COMMON SHARE $ 1.42 $ 1.32 $ 1.02
==========================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
26
<PAGE> 3
<TABLE>
CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share amounts)
<CAPTION>
At December 31 1994 1993
<S> <C> <C>
----------------------------------------------------------------------------------
ASSETS
----------------------------------------------------------------------------------
CURRENT ASSETS:
Cash and cash equivalents $ 92,249 $ 127,802
Marketable securities 59,049 66,260
Receivables, less allowance for doubtful accounts
of $11,062 in 1994 and $13,886 in 1993 471,384 322,284
Inventories (note 5) 295,180 303,437
Prepaid expenses 8,804 9,961
----------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 926,666 829,744
----------------------------------------------------------------------------------
Property, plant, and equipment, net (note 6) 607,628 572,136
Intangible and other assets, net (notes 4 and 12) 174,886 111,244
----------------------------------------------------------------------------------
TOTAL ASSETS $1,709,180 $1,513,124
==================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------------------------
CURRENT LIABILITIES:
Notes payable (note 7) $ 20,374 $ 12,783
Long-term debt, current (note 7) 1,783 2,519
Payables 102,681 116,401
Accrued liabilities (note 8) 170,759 127,611
----------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 295,597 259,314
----------------------------------------------------------------------------------
Other deferred liabilities (notes 9 and 10) 116,181 103,914
Long-term debt, non-current (note 7) 11,576 19,414
----------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (NOTES 9 AND 13):
Preferred stock, without par value.
Authorized 20,000,000 shares; none issued - -
Common Shares of $1 par value.
Authorized 400,000,000 shares; issued
162,677,082 shares in 1994 and 160,357,090
shares in 1993 162,677 160,357
Paid-in capital 69,795 10,515
Retained earnings 1,120,629 966,928
Foreign currency translation adjustment (16,583) (4,613)
Treasury shares, at cost (1,875,830 shares in
1994 and 89,826 shares in 1993) (50,692) (2,705)
----------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 1,285,826 1,130,482
----------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,709,180 $1,513,124
==================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
27
<PAGE> 4
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
( ) Denotes decrease in cash and cash equivalents
<CAPTION>
Years Ended December 31 1994 1993 1992
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $228,126 $211,413 $164,095
Adjustments to reconcile net earnings to
net cash from operating activities:
Cumulative effect of changes in
accounting principles (note 2):
Postretirement benefits - - 20,112
Other - - (17,281)
Depreciation and amortization 93,724 85,415 73,836
Employee benefits 13,887 14,204 16,049
Other (2,137) 7,170 (9,383)
Changes in:
Receivables (117,716) (31,949) (24,896)
Inventories 18,462 (31,520) (28,605)
Prepaid expenses and other assets 964 (10,533) 2,503
Payables (45,012) 16,783 (18,221)
Accrued liabilities 21,895 28,426 (1,313)
------------------------------------------------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES 212,193 289,409 176,896
------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (277,312) (66,260) -
Proceeds from sale of marketable securities 284,535 - -
Capital expenditures (118,000) (141,697) (134,528)
Other, net (6,792) 87 (3,558)
------------------------------------------------------------------------------------------------
NET CASH FROM INVESTING ACTIVITIES (117,569) (207,870) (138,086)
------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in notes payable 6,961 (5,630) 2,972
Proceeds from long-term debt 1,736 2,000 3,233
Repayment of long-term debt (15,766) (5,650) (16,432)
Cash dividends paid (74,425) (64,938) (56,477)
Common Shares repurchased (48,683) (2,013) -
Other, net - - (2,933)
------------------------------------------------------------------------------------------------
NET CASH FROM FINANCING ACTIVITIES (130,177) (76,231) (69,637)
------------------------------------------------------------------------------------------------
NET CHANGE IN CASH AND CASH EQUIVALENTS (35,553) 5,308 (30,827)
Cash and cash equivalents at beginning of year 127,802 122,494 153,321
------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of year $ 92,249 $127,802 $122,494
================================================================================================
SUPPLEMENTAL CASH FLOW INFORMATION:
Income taxes paid $123,673 $112,423 $128,501
Interest paid $ 7,346 $ 8,182 $ 7,507
================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
28
<PAGE> 5
<TABLE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(Dollars in thousands except per share amounts)
<CAPTION>
Foreign
Currency Total
Common Paid-in Retained Translation Treasury Shareholders'
Shares Capital Earnings Adjustment Shares Equity
<S> <C> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
TRANSACTIONS FOR 1992:
Opening balance $ 160,189 $ 1,411 $ 712,933 $ 12,559 $ (1,352) $ 885,740
Net earnings - - 164,095 - - 164,095
Cash dividends, $.3525
per share - - (56,477) - - (56,477)
Employee stock plans 50 4,209 - - 735 4,994
Foreign currency translation
adjustment - - - (10,605) - (10,605)
Other, net - - (98) - - (98)
-----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 160,239 5,620 820,453 1,954 (617) 987,649
TRANSACTIONS FOR 1993:
Net earnings - - 211,413 - - 211,413
Cash dividends, $.405
per share - - (64,938) - - (64,938)
Employee stock plans 118 4,895 - - (75) 4,938
Common Shares repurchased - - - - (2,013) (2,013)
Foreign currency translation
adjustment - - - (6,567) - (6,567)
-----------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 160,357 10,515 966,928 (4,613) (2,705) 1,130,482
TRANSACTIONS FOR 1994:
NET EARNINGS - - 228,126 - - 228,126
CASH DIVIDENDS, $.4625
PER SHARE - - (74,425) - - (74,425)
EMPLOYEE STOCK PLANS 139 4,833 - - 696 5,668
COMMON SHARES
REPURCHASED - - - - (48,683) (48,683)
COMMON SHARES ISSUED
FOR AN ACQUISITION 2,181 54,447 - - - 56,628
FOREIGN CURRENCY
TRANSLATION ADJUSTMENT - - - (11,970) - (11,970)
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1994 $ 162,677 $ 69,795 $ 1,120,629 $ (16,583) $ (50,692) $ 1,285,826
===================================================================================================================================
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
29
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Rubbermaid
Incorporated and its subsidiary companies, all of which are wholly owned except
for Rubbermaid Japan Inc. (see note 4). All significant intercompany profits,
transactions, and balances have been eliminated in consolidation.
INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined using
the last-in, first-out (LIFO) method for 83% of inventories in both 1994 and
1993. Cost of the remaining inventories is determined using the first-in,
first-out (FIFO) method.
PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment is stated at cost less depreciation and
amortization accumulated to date. Depreciation and amortization are computed on
the straight-line method over the estimated useful lives of the assets.
INTANGIBLE ASSETS
The excess of cost over net assets of businesses acquired at December 31, 1994
and 1993, of $118,579 and $44,862, respectively, net of accumulated
amortization of $16,768 and $15,367, respectively, is amortized on a
straight-line basis over periods ranging from 20 to 40 years.
The Company utilizes the undiscounted cash flow method to determine whether a
permanent impairment in the carrying value of its long-lived assets has
occurred, at which time a write-down to fair value would be recorded.
FINANCIAL INSTRUMENTS
Investments with maturities at date of purchase of three months or less are
considered cash equivalents. At December 31, 1994 and 1993, cash equivalents
include commercial paper ($49,453 and $70,240, respectively) maturing generally
in 60 days or less.
The fair value of financial instruments consisting of investments in cash, cash
equivalents, receivables, obligations under accounts payable, and debt
instruments is based on interest rates available to the Company and comparisons
to quoted prices. At December 31, 1994 and 1993, the fair value of these
financial instruments approximated their carrying value.
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 December 31,
1994 and 1993, consists of debt securities ($26,050 and $12,910, respectively),
all of which mature in less than one year, and equity securities ($32,999 and
$53,350, respectively).
The Company uses a limited number of foreign exchange agreements to hedge firm
and anticipated commitments as well as dividends denominated in foreign
currencies and net investments in foreign subsidiaries. Agreements have
included forward contracts, currency swaps, and foreign currency options. Gains
and losses incurred on foreign exchange instruments identified as hedges are
deferred and recognized in income in the same period as the hedged transaction.
The fair value of these foreign currency agreements is estimated using current
market prices provided by an outside quotation service. The net unrealized
gains or losses from hedging anticipated transactions were not material at
December 31, 1994.
NET EARNINGS PER COMMON SHARE
Net earnings per Common Share are based on the average number of Common Shares
outstanding during each year. Average shares used in the calculations were
160,893,465, 160,318,196, and 160,207,099 in 1994, 1993, and 1992,
respectively.
2. ACCOUNTING CHANGES
Effective January 1, 1992, the Company adopted FAS No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions." The Company
elected to immediately recognize the obligation for these benefits, resulting
in a cumulative effect charge to 1992 net earnings of $20,112 (net of $12,015
of income taxes) or $.13 per share.
Effective January 1, 1992, the Company modified its inventory accounting
practices to include additional costs as part of inventoriable overhead. The
Company believes this change is preferable because it improves the matching of
revenues and costs and improves comparability of operating results and
financial position with those of other companies. The cumulative effect of this
change was $11,203 (net of $6,866 of income taxes) or $.07 per share.
Effective January 1, 1992, the Company adopted FAS No. 109, "Accounting For
Income Taxes." The cumulative effect of this change was $6,078 or $.04 per
share.
The effect of these changes on 1992's results, after recording the cumulative
effect, and the pro forma effect on the prior year results were not
significant.
3. REALIGNMENT COSTS
During 1992, the Company provided $27,500 ($17,050 after tax or $.11 per share)
for the cost of actions to realign and integrate certain operations.
30
<PAGE> 7
4. BUSINESS DEVELOPMENT
ACQUISITIONS
In June 1994, the Company acquired Carex Inc., a manufacturer and marketer of
bath safety products, personal care accessories, and other products designed to
assist the aging and physically challenged, in a cash transaction accounted for
as a purchase, and Empire Brushes, Inc., a manufacturer and marketer of brushes,
brooms, and mops for home and commercial use, in a stock transaction accounted
for as a purchase. In October 1994, the Company acquired the assets of Glenwood
Systems Pty. Ltd. and related companies, well known in Australia as Ausplay, an
innovative designer and marketer of high-quality commercial playground
equipment, in a cash transaction accounted for as a purchase.
DIVESTITURES
During 1994, the Company sold its casual outdoor resin furniture business, as
well as the assets of the Davson Division of Rubbermaid Office Products.
JOINT VENTURES
In April 1994, the Company completed a joint venture with Richell Corporation,
a leading Japanese housewares manufacturer. The joint venture, Rubbermaid Japan
Inc., develops, markets, and sells housewares, leisure, and seasonal products
for the Japanese market. The Company initially held a 40% equity interest in
the venture and, in October 1994, exercised an option to increase its equity
interest to 51%.
In May 1994, the Company ended its European housewares joint venture with DSM,
the Dutch chemical group. Prior to its termination, the Company's 40% interest
in the joint venture was accounted for by the equity method.
In January 1995, the Company formed a joint venture, Royal Rubbermaid
Structures Ltd., with Royal Plastics Group Limited of Canada. The joint venture
will manufacture and market modular plastic components and kits for small
structures, such as storage buildings and sheds. Each partner owns 50% of the
joint venture.
The business development activities described above had no material effect on
the 1994 financial statements.
5. INVENTORIES
A summary of inventories follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
--------------------------------------------------------
FIFO cost:
Raw materials $ 93,960 $ 75,978
Work-in-process 16,555 15,964
Finished goods 209,140 224,023
--------------------------------------------------------
319,655 315,965
Excess of FIFO over LIFO cost (24,475) (12,528)
--------------------------------------------------------
$295,180 $303,437
========================================================
</TABLE>
6. PROPERTY, PLANT, AND EQUIPMENT, NET
The components of property, plant, and equipment are summarized below:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
--------------------------------------------------------
Land and land improvements $ 27,185 $ 26,984
Buildings 256,271 242,531
Machinery and equipment 763,629 702,092
--------------------------------------------------------
1,047,085 971,607
Accumulated depreciation (555,555) (508,944)
--------------------------------------------------------
491,530 462,663
Additions in progress 116,098 109,473
--------------------------------------------------------
$ 607,628 $ 572,136
========================================================
</TABLE>
7. NOTES PAYABLE AND LONG-TERM DEBT
Notes payable includes $8,500 of variable rate industrial revenue bonds at
December 31, 1994 and 1993. Although the bonds mature in 2009, they are
classified as short-term debt since annually the bondholders may elect to
continue their investment or return the bonds, at which time they can be
redeemed or resold.
Long-term debt at December 31, 1994 and 1993, is summarized as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
--------------------------------------------------------
Industrial revenue bonds $ 5,286 $ 15,073
Other 8,073 6,860
--------------------------------------------------------
13,359 21,933
Less current portion 1,783 2,519
--------------------------------------------------------
$ 11,576 $ 19,414
========================================================
</TABLE>
The aggregate principal payments due on the long-term debt for the five years
subsequent to December 31, 1994 are as follows:
<TABLE>
<CAPTION>
1995 1996 1997 1998 1999
<S> <C> <C> <C> <C>
--------------------------------------------------------
$1,783 $2,604 $3,265 $1,406 $290
========================================================
</TABLE>
8. ACCRUED LIABILITIES
Accrued liabilities at December 31, 1994 and 1993, consist of the following:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
--------------------------------------------------------
Compensation and commissions $ 30,420 $ 28,060
Retirement plans 26,759 23,338
Other 113,580 76,213
--------------------------------------------------------
$ 170,759 $ 127,611
========================================================
</TABLE>
9. EMPLOYEE BENEFIT AND RETIREMENT PLANS
The Company provides retirement benefits primarily through noncontributory
defined contribution plans. The cost of these plans aggregated $22,178,
$21,185, and $20,189 in 1994, 1993, and 1992, respectively.
31
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share amounts)
9. EMPLOYEE BENEFIT AND RETIREMENT PLANS (CONT'D.)
The Company's Restricted Stock Incentive and Option Plan provides for Common
Share awards to be made to key management associates with restrictions as to
disposition and subject to forfeiture upon termination of employment or if
certain performance goals are not achieved. The plan provides for supplemental
cash awards in the event performance goals are exceeded. During 1994, 1993, and
1992, 139,341, 143,844, and 139,268 Common Shares were awarded and 53,758,
23,852, and 29,128 shares were forfeited, respectively. The plan also provides
for the granting of incentive stock options as well as non-qualified options.
The Company maintains an incentive plan and an unfunded deferred compensation
plan for participating officers and key management associates. The liability
related to the deferred compensation plan ($26,350 and $22,010 at December 31,
1994 and 1993, respectively) is included in other deferred liabilities. The
Company also maintains a Voluntary Employee Beneficiary Association (VEBA).
10. OTHER POSTRETIREMENT BENEFIT PLANS
The Company sponsors defined benefit health care plans that provide medical
benefits to retired associates meeting certain eligibility requirements. The
plans generally contain cost-sharing features such as deductibles and
coinsurance, and some plans are contributory. During 1993, certain plans were
amended to limit the Company's annual per capita contributions. The plans are
unfunded.
At December 31, 1994 and 1993, the actuarially determined status of these plans
was as follows:
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
---------------------------------------------------------
Accumulated postretirement benefit
obligation:
Retirees $25,399 $29,472
Other fully eligible participants 8,527 10,355
Other active participants 10,929 14,630
---------------------------------------------------------
44,855 54,457
Unrecognized net reduction in prior
service costs 5,448 6,039
Unrecognized net gain 16,463 3,765
---------------------------------------------------------
Amount included in other deferred
liabilities $66,766 $64,261
=========================================================
</TABLE>
The expense related to the plans was as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------
1994 1993 1992
<S> <C> <C> <C>
--------------------------------------------------------
Service cost $1,317 $1,865 $2,013
Interest cost 3,872 4,607 4,778
Amortization (591) (197) -
--------------------------------------------------------
$4,598 $6,275 $6,791
========================================================
</TABLE>
In estimating the Company's December 31, 1994 obligation under these plans, the
per capita cost of covered benefits is assumed to increase by 11% in 1995, with
that percentage decreasing one percentage point per year to an ultimate rate of
6% in 2000. Adjusting the assumed annual increase in the per capita cost of
covered benefits upward by one percentage point each year would increase the
accumulated postretirement benefit obligation and the expense related to these
plans by approximately 10%. The discount rate used in determining the
accumulated postretirement benefit obligation was 8.5%.
The obligation at December 31, 1993 was estimated assuming the per capita cost
of covered benefits would increase 12% in 1994, with that percentage decreasing
one percentage point per year to an ultimate rate of 6%. The discount rate used
was 7.25%.
11. RESEARCH AND DEVELOPMENT COSTS
Research and development costs relating to both future and present products are
charged to selling, general, and administrative expenses as incurred. These
costs aggregated $27,747, $28,202, and $25,951 in 1994, 1993, and 1992,
respectively.
12. INCOME TAXES
Income taxes are summarized as follows:
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
----------------------------------------------------------------
Current:
Federal $112,704 $108,712 $ 87,290
State and local 16,430 17,306 14,294
Foreign 13,825 7,802 5,148
----------------------------------------------------------------
142,959 133,820 106,732
Deferred:
Federal (3,625) (3,019) (6,277)
State and local (390) (504) (831)
Foreign 81 173 283
----------------------------------------------------------------
(3,934) (3,350) (6,825)
----------------------------------------------------------------
$139,025 $130,470 $ 99,907
================================================================
</TABLE>
Earnings before income taxes aggregated $336,798, $316,655, and $247,348 for
domestic operations and $30,353, $25,228, and $19,485 for foreign operations in
1994, 1993, and 1992, respectively. Total tax expense as a percent of pretax
income differs from the amounts computed by applying the U.S. federal income
tax rate of 35% in 1994 and 1993, and 34% in 1992, to earnings before income
taxes primarily due to the effect of state and local income tax expense.
As of December 31, 1994 and 1993, the Company had aggregate deferred tax assets
of $87,032 and $78,973, respectively, including $25,482 and $24,419,
respectively, related to postretirement benefits, and deferred tax liabilities
of $49,881 and $45,756, respectively, including $47,916 and $44,561,
respectively, related to property, plant, and equipment.
32
<PAGE> 9
13. COMMON SHARES
SHARE REPURCHASE PROGRAM
As part of a program previously authorized by the Board of Directors, the
Company purchased approximately 1.8 million common shares for its treasury
during 1994 at an aggregate cost of $48,683.
SHAREHOLDER RIGHTS PLAN
Under the Company's Rights Agreement, each shareholder has the right to
purchase from the Company one Common Share at a price that is currently $62.50
per share. The rights are only exercisable in the event a person acquires or
commences a tender offer or exchange offer for 20% or more of the Company's
outstanding Common Shares.
In the event that a person who owns 20% or more of the Company's outstanding
Common Shares merges into the Company, engages in one of a number of
self-dealing transactions, or increases ownership to 25% or more, each right
would entitle its holder to purchase the Company's Common Shares having a
market value equal to twice the right's exercise price. In the event that the
Company engages in a merger or other business transaction in which the Company
is not the surviving corporation, engages in a merger or other business
combination transaction in which its Common Shares are changed or exchanged, or
50% or more of the Company's assets or earning power are sold, each right would
entitle its holder to purchase common shares of the acquiring, surviving, or
resulting person having a market value equal to twice the right's exercise
price.
The rights expire June 24, 1996, and may be redeemed by the Company at a cost
that is currently $.0125 per right, prior to the occurrence of the events
described in the preceding two paragraphs.
--------------------------------------------------------------------------------
14. SEGMENT REPORTING DATA
The Company operates exclusively in one industry which is the manufacture and
distribution of plastic and rubber products and sells to a broad range of
customers, one of which accounted for 15%, 14%, and 13% of net sales in 1994,
1993, and 1992, respectively.
At December 31, 1994, 1993, and 1992, the Company's equity in foreign
subsidiaries was $123,855, $105,485, and $100,085, respectively.
Revenues from non-U.S. customers, including foreign net sales and exports from
U.S. operations, represented 16%, 14%, and 13% of total net sales in 1994,
1993, and 1992, respectively.
The following is information about the Company's operations in different
geographic areas. Foreign amounts do not include minority-owned joint ventures
which are accounted for under the equity method.
<TABLE>
<CAPTION>
Net Sales Operating Earnings Total Assets
--------------------------------------------------------------------------------------------------------------------
(in millions) 1994 1993 1992 1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------
United States $1,906.4 $1,753.6 $1,611.3 $330.1 $325.0 $249.1 $1,481.3 $1,342.9 $1,164.3
Foreign 263.0 206.6 194.0 25.8 20.5 17.7 227.9 170.2 162.3
--------------------------------------------------------------------------------------------------------------------
$2,169.4 $1,960.2 $1,805.3 $355.9 $345.5 $266.8 $1,709.2 $1,513.1 $1,326.6
====================================================================================================================
</TABLE>
15. QUARTERLY FINANCIAL INFORMATION - UNAUDITED
<TABLE>
<CAPTION>
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
--------------------------------------------------------------------------------------------------------------------
1994 1993 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------------------------
Net sales $566,337 $472,862 $580,271 $515,208 $531,098 $488,460 $491,648 $483,677
Cost of sales 384,774 301,998 391,119 327,791 362,432 330,365 327,261 325,795
Net earnings 54,601 50,841 66,759 60,381 56,145 50,575 50,621 49,616
--------------------------------------------------------------------------------------------------------------------
Per Common Share:
Net earnings .34 .32 .41 .37 .35 .32 .32 .31
Cash dividends paid .1250 .1125 .1125 .0975 .1125 .0975 .1125 .0975
Market price range:
High 29.25 37.13 28.25 34.50 28.25 34.75 35.00 35.00
Low 25.75 32.50 25.63 28.00 23.75 28.38 27.25 29.63
====================================================================================================================
</TABLE>
33
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
RESULTS OF OPERATIONS
Net sales for 1994 were $2.169 billion - up 11% from $1.960 billion in 1993, a
record performance for the 43rd consecutive year. Volume was up 12%, including
3% from acquisitions, net of divestitures, while pricing was down 1%. Sales
growth was stimulated by a record level of new product introductions and
aggressive marketing and advertising which made consumers conscious of the
value and innovation of those products. Net sales in 1993 were up 9% from
1992, due to increased unit volume.
Emphasis on worldwide opportunities and global expansion in 1994 resulted in
international sales growth outpacing the domestic growth rate. Significant
contributions from operations outside the United States as well as export
activities underscored the Company's expanded presence in international
markets.
In September, the Company announced selling price increases to help offset a
dramatic escalation in resin costs. Selling prices were increased
product-by-product and business-by-business, as necessary, but did not begin to
have an impact on results until late in the fourth quarter.
Net earnings in 1994 were a record $228.1 million, or $1.42 per share, up 8%
from $211.4 million, or $1.32 per share, in 1993. Record 1994 earnings marked
the 57th consecutive year of profitable performance by the Company. The
earnings increase reflects the Company's continued emphasis on strong unit
growth, productivity improvements, vigorous cost control measures, and better
factory utilization.
Before adoption of FAS 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," 1992 net earnings were $184.2 million, or $1.15 per
share. After the FAS 106 accounting change, which resulted in a one-time
after-tax charge of $20.1 million, or $.13 per share, 1992 earnings were $164.1
million, or $1.02 per share.
Cost of sales as a percent of net sales was 67.6%, 65.6%, and 66.5% in 1994,
1993, and 1992, respectively. The 1994 increase reflects escalating materials
costs, particularly sharp resin cost increases which began in the third quarter
and continued rising at high rates in the fourth quarter. By the end of 1994,
resin market prices were 80% above levels earlier in the year. The 1993
improvement versus 1992 primarily reflected favorable manufacturing cost trends
including a more efficient loading of factories and a LIFO reserve reduction.
Resin prices, which were slightly lower on average in 1993 compared with 1992,
were stable throughout 1993.
Selling, general, and administrative expenses as a percent of net sales were
16.0%, 16.8%, and 17.2% in 1994, 1993, and 1992, respectively. These costs as
a percent of net sales continue to decline year-over-year, primarily as a
result of productivity improvements which allow the expense level to be
leveraged over greater volume, partially offset by an increase in advertising
and promotion expense.
Miscellaneous, net includes items such as income from minority interests in
joint ventures, royalty income, foreign exchange gains and losses, amortization
of intangible assets, and gains and losses on the disposal of property, plant,
and equipment. Increased income in 1994 versus 1993 primarily reflects certain
gains recognized from 1994 divestitures and a reduction in the loss on disposal
of equipment.
The effective income tax rate as a percent of earnings before income taxes and
cumulative effect of changes in accounting principles was 37.9%, 38.2%, and
37.4% for 1994, 1993, and 1992, respectively. The increase in the effective
rate in 1993 compared to 1992 is due to the impact of the Omnibus Budget
Reconciliation Act, which increased the corporate federal income tax rate on
domestic income from 34% to 35%.
OUTLOOK FOR 1995
Looking toward 1995, the Company anticipates continued sales growth through new
product introductions, business development activities, and increased price
realization. Earnings growth is expected to trail sales increases due to the
lag in phasing-in selling price increases to recoup escalating resin costs.
Pressure on margins is expected to abate during the year as resin cost
increases start to slow and are more fully offset by higher selling prices.
CAPITAL RESOURCES AND LIQUIDITY
The Company's financial position continues to be solid. Growth has been financed
through a combination of cash provided from operations and new equity issues,
and to a lesser extent through long-term debt financing. Cash provided from
operating activities is the primary source of liquidity and amounted to $212
million in 1994, $289 million in 1993, and $177 million in 1992.
The Company has relationships with commercial banks that informally have
committed to provide approximately $115 million to finance fluctuations in
working capital and, if necessary, to provide other funds for operations until
term financing is secured. Long-term financing is negotiated as necessary to
meet growth requirements. Newly issued equity may be used in the future to
finance acquisitions. Internally generated funds have principally been used to
finance capital expenditures, provide working capital, acquire businesses,
repurchase Common Shares, and pay dividends. During 1994, the Company issued
approximately 2.2 million Common Shares in connection with the
34
<PAGE> 11
acquisition of Empire Brushes, Inc. In addition, as part of a program
authorized by the Board of Directors, the Company purchased approximately 1.8
million Common Shares for its treasury at an aggregate cost of $48.7 million.
Each year for the past 40 years dividends paid per share have increased. The
Company's objective is to pay approximately 30% of current year's earnings as
dividends and retain sufficient capital for future investment opportunities to
grow sales and earnings at the objective annual rate of 15%.
In 1994, the Company invested $118 million in property, plant, and equipment
to expand capacity, improve productivity, and tool new products. Investments
continue to be made in new equipment throughout the Company to support
productivity improvements and cost reduction programs. Tooling was purchased
for a wide variety of new products and to add capacity for existing products.
In addition, the Company made an investment to build and equip a European
production facility at Differdange, Luxembourg, primarily for the Little Tikes
business. For 1995, investments in excess of the 1994 level have been budgeted
to be funded from operations.
Working capital, excluding cash and cash equivalents and marketable securities,
increased $103.4 million in 1994. The net change reflects the incremental
increase arising from business development activities, an increase in
receivables, and a decrease in payables, which were offset by decreases in core
inventory levels as well as an increase in other accrued liabilities.
ACQUISITIONS In June 1994, the Company acquired Carex Inc., a manufacturer and
marketer of bath safety products, personal care accessories, and other products
for the aging and physically challenged, in a cash transaction accounted for as
a purchase, and Empire Brushes, Inc., a manufacturer and marketer of brushes,
brooms, and mops for home and commercial use, in a stock transaction accounted
for as a purchase. In October 1994, the Company acquired the assets of Glenwood
Systems Pty. Ltd. and related companies, well-known in Australia as Ausplay, an
innovative designer and marketer of high-quality commercial playground
equipment, in a cash transaction accounted for as a purchase.
DIVESTITURES In September 1994, the Company sold its casual outdoor resin
furniture business. In November 1994, the Company sold the assets of the Davson
Division of Rubbermaid Office Products.
JOINT VENTURES In April 1994, the Company completed a previously announced
joint venture with Richell Corporation, a leading Japanese housewares
manufacturer. The joint venture, Rubbermaid Japan Inc., develops, markets, and
sells housewares, leisure, and seasonal products for the Japanese market. The
Company initially held a 40% equity interest in the venture and, in October
1994, exercised an option to increase its equity interest to 51%.
In May 1994, the Company ended its European housewares joint venture with DSM,
the Dutch chemical group. Under the terms of the dissolution agreement, the
Company is free to enter the European housewares market on an unrestricted
basis in March 1995. Prior to its termination, the Company's 40% interest in
the joint venture was accounted for by the equity method.
In January 1995, the Company formed Royal Rubbermaid Structures Ltd., a joint
venture with Royal Plastics Group Limited of Canada, for the manufacture and
marketing of modular plastic components and kits for small structures, such as
storage buildings and sheds. Each partner owns 50% of the joint venture.
The business development activities described above had no material effect on
the 1994 financial statements.
ENVIRONMENTAL PROGRAM
The Company is subject to various laws and regulations concerning
environmental matters and employee safety and health in the United States and
other countries. The Occupational Safety and Health Administration, the U.S.
Environmental Protection Agency, and other federal agencies have authority to
promulgate regulations that have an impact on the Company's operations. Many
state and local governments also have adopted environmental and employee safety
and health laws and regulations. Federal and state authorities may seek fines
and penalties for violation of these laws and regulations. As part of its
continuing environmental program, the Company has been able to comply with
regulations and requirements of state and federal agencies without any
materially adverse effect on its business.
The Company is committed to a long-term environmental protection program which
is managed by the Company's environmental council. The council meets regularly
and assesses the impact of environmental laws and regulations on the Company's
operations. In addition, the Company uses outside firms to perform regular
environmental audits of its facilities that have, to date, revealed no
significant environmental problems.
35
<PAGE> 12
<TABLE>
CONSOLIDATED FINANCIAL SUMMARY
(Dollars in thousands except per share amounts)
<CAPTION>
Years ended December 31 1994 1993 1992 1991
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING RESULTS
Net sales $2,169,354 $1,960,207 $1,805,332 $1,667,305
Cost of sales 1,465,586 1,285,949 1,200,651 1,102,685
Selling, general, and administrative expenses 347,915 328,741 310,410 307,780
Net earnings 228,126 211,413 184,207/164,095* 162,650
========================================================================================================================
Per Common Share $ 1.42 $ 1.32 $1.15/1.02* $ 1.02
------------------------------------------------------------------------------------------------------------------------
Percent of net sales 10.5% 10.8% 10.2%/9.1%* 9.8%
------------------------------------------------------------------------------------------------------------------------
Return on average shareholders' equity 18.9% 20.0% 19.5%/17.5%* 19.7%
FINANCIAL POSITION
Current assets $ 926,666 $ 829,744 $ 699,650 $ 663,999
Property, plant, and equipment, net 607,628 572,136 517,096 461,375
Intangible and other assets, net 174,886 111,244 109,823 119,157
------------------------------------------------------------------------------------------------------------------------
Total assets $1,709,180 $1,513,124 $1,326,569 $1,244,531
========================================================================================================================
Current liabilities $ 295,597 $ 259,314 $ 223,246 $ 245,500
Other deferred liabilities 116,181 103,914 95,395 85,479
Long-term debt 11,576 19,414 20,279 27,812
Shareholders' equity 1,285,826 1,130,482 987,649 885,740
------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,709,180 $1,513,124 $1,326,569 $1,244,531
========================================================================================================================
Long-term debt as a percent of capitalization 1% 2% 3% 4%
------------------------------------------------------------------------------------------------------------------------
Working capital $ 631,069 $ 570,430 $ 476,404 $ 418,499
------------------------------------------------------------------------------------------------------------------------
Current ratio 3.13 3.20 3.13 2.70
OTHER DATA
Average Common Shares outstanding (000) 160,893 160,318 160,207 160,126
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid $ 74,425 $ 64,938 $ 56,477 $ 49,643
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid per Common Share $ .4625 $ .405 $ .3525 $ .31
------------------------------------------------------------------------------------------------------------------------
Shareholders' equity per Common Share $ 8.00 $ 7.05 $ 6.16 $ 5.53
------------------------------------------------------------------------------------------------------------------------
Stock price range - NYSE $ 35-24 $ 37-28 $ 37-27 $ 38-19
------------------------------------------------------------------------------------------------------------------------
Capital expenditures $ 118,000 $ 141,697 $ 134,528 $ 122,513
------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 93,724 $ 85,415 $ 73,836 $ 66,686
------------------------------------------------------------------------------------------------------------------------
Number of shareholders - year end 30,889 22,508 20,255 15,429
------------------------------------------------------------------------------------------------------------------------
Average number of associates 12,939 11,978 11,296 9,754
------------------------------------------------------------------------------------------------------------------------
<FN>
*Results before/after the cumulative effect of changing the method of accounting for postretirement benefits other than pensions
(see note 2 to consolidated financial statements).
</TABLE>
36
<PAGE> 13
<TABLE>
<CAPTION>
Years ended December 31 1990 1989 1988 1987
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING RESULTS
Net sales $1,534,013 $1,452,365 $1,291,584 $1,096,055
Cost of sales 1,014,526 967,563 886,850 727,927
Selling, general, and administrative expenses 286,647 268,148 221,497 199,145
Net earnings 143,520 124,984 106,858 90,723
========================================================================================================================
Per Common Share $ .90 $ .78 $ .67 $ .57
------------------------------------------------------------------------------------------------------------------------
Percent of net sales 9.4% 8.6% 8.3% 8.3%
------------------------------------------------------------------------------------------------------------------------
Return on average shareholders' equity 20.2% 20.6% 20.6% 20.8%
FINANCIAL POSITION
Current assets $ 602,697 $ 567,307 $ 452,639 $ 418,563
Property, plant, and equipment, net 405,520 379,107 347,677 310,017
Intangible and other assets, net 106,033 38,591 42,389 45,748
------------------------------------------------------------------------------------------------------------------------
Total assets $1,114,250 $ 985,005 $ 842,705 $ 774,328
========================================================================================================================
Current liabilities $ 235,300 $ 215,121 $ 197,431 $ 209,771
Other deferred liabilities 71,555 67,114 47,471 47,585
Long-term debt 39,191 50,294 39,023 40,042
Shareholders' equity 768,204 652,476 558,780 476,930
------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $1,114,250 $ 985,005 $ 842,705 $ 774,328
========================================================================================================================
Long-term debt as a percent of capitalization 5% 8% 7% 8%
------------------------------------------------------------------------------------------------------------------------
Working capital $ 367,397 $ 352,186 $ 255,208 $ 208,792
------------------------------------------------------------------------------------------------------------------------
Current ratio 2.56 2.64 2.29 2.00
OTHER DATA
Average Common Shares outstanding (000) 159,688 159,250 158,928 158,468
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid $ 42,621 $ 35,975 $ 29,520 $ 24,581
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid per Common Share $ .27 $ .23 $ .19 $ .16
------------------------------------------------------------------------------------------------------------------------
Shareholders' equity per Common Share $ 4.80 $ 4.10 $ 3.52 $ 3.01
------------------------------------------------------------------------------------------------------------------------
Stock price range - NYSE $ 23-16 $ 19-13 $ 14-11 $ 18-10
------------------------------------------------------------------------------------------------------------------------
Capital expenditures $ 103,720 $ 89,787 $ 87,333 $ 104,429
------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 58,586 $ 65,866 $ 50,173 $ 50,032
------------------------------------------------------------------------------------------------------------------------
Number of shareholders - year end 13,305 11,225 10,482 10,104
------------------------------------------------------------------------------------------------------------------------
Average number of associates 9,304 9,098 8,643 7,512
------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Years ended December 31 1986 1985 1984
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS
Net sales $864,721 $747,858 $676,660
Cost of sales 554,421 488,169 458,803
Selling, general, and administrative expenses 166,954 140,203 118,915
Net earnings 75,004 62,288 54,129
========================================================================================================================
Per Common Share $ .47 $ .40 $ .34
------------------------------------------------------------------------------------------------------------------------
Percent of net sales 8.7% 8.3% 8.0%
------------------------------------------------------------------------------------------------------------------------
Return on average shareholders' equity 20.5% 20.0% 20.4%
FINANCIAL POSITION
Current assets $332,655 $309,336 $270,989
Property, plant, and equipment, net 248,224 210,929 171,836
Intangible and other assets, net 45,780 13,041 9,826
------------------------------------------------------------------------------------------------------------------------
Total assets $626,659 $533,306 $452,651
========================================================================================================================
Current liabilities $156,456 $133,116 $114,970
Other deferred liabilities 40,013 28,713 23,172
Long-term debt 35,668 34,071 27,559
Shareholders' equity 394,522 337,406 286,950
------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $626,659 $533,306 $452,651
========================================================================================================================
Long-term debt as a percent of capitalization 9% 10% 9%
------------------------------------------------------------------------------------------------------------------------
Working capital $176,199 $176,220 $156,019
------------------------------------------------------------------------------------------------------------------------
Current ratio 2.13 2.32 2.36
OTHER DATA
Average Common Shares outstanding (000) 158,064 157,588 157,240
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid $ 19,771 $ 15,907 $ 13,224
------------------------------------------------------------------------------------------------------------------------
Cash dividends paid per Common Share $ .13 $ .113 $ .098
------------------------------------------------------------------------------------------------------------------------
Shareholders' equity per Common Share $ 2.50 $ 2.15 $ 1.83
------------------------------------------------------------------------------------------------------------------------
Stock price range - NYSE $ 14-8 $ 9-5 $ 6-4
------------------------------------------------------------------------------------------------------------------------
Capital expenditures $ 71,587 $ 71,665 $ 55,615
------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization $ 35,455 $ 32,515 $ 24,394
------------------------------------------------------------------------------------------------------------------------
Number of shareholders - year end 8,379 6,332 5,722
------------------------------------------------------------------------------------------------------------------------
Average number of associates 6,509 5,934 5,374
------------------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE> 1
Exhibit 21
----------
<TABLE>
SUBSIDIARIES OF REGISTRANT*
---------------------------
<CAPTION>
STATE OR
JURISDICTION OF PERCENT OF
NAME** INCORPORATION OWNERSHIP
---- ------------- ---------
<S> <C> <C>
Rubbermaid Commercial Products Inc. Delaware 100%
The Little Tikes Company Ohio 100%
Rubbermaid Canada Inc. Ontario, Canada 100%
Rubbermaid Office Products Inc. Delaware 100%
Rubbermaid Specialty Products Inc. Delaware 100%
<FN>
* All of the listed subsidiaries are included in Registrant's
consolidated financial statements.
** All subsidiaries conduct their businesses under the names shown.
</TABLE>
<PAGE> 1
Exhibit 23
----------
The Board of Directors
Rubbermaid Incorporated:
We consent to incorporation by reference in the registration statements (File
Nos. 33-63420, 33-56105, 33-57091, 33-57093, and 33-57097) on Form S-8, and in
the registration statement (File No. 33-54799) on Form S-3 of Rubbermaid
Incorporated of our report dated January 31, 1995, relating to the consolidated
balance sheets of Rubbermaid Incorporated and subsidiaries as of December 31,
1994 and 1993, and the related consolidated statements of earnings, cash flows,
and shareholders' equity for each of the years in the three-year period ended
Decemer 31, 1994, which report appears in the December 31, 1994 annual report
on Form 10-K of Rubbermaid Incorporated.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
March 27, 1995
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY ----------
-----------------
KNOW ALL MEN BY THESE PRESENT, that each of the undersigned Directors of
Rubbermaid Incorporated (the "Registrant"), a corporation organized and
existing under the laws of the State of Ohio, hereby constitute and appoint
Wolfgang R. Schmitt, George C. Weigand and James A. Morgan, and each of them a
true and lawful attorney-in-fact in their name, place and stead with full power
of substitution, to sign, in their name as a Director of the Registrant, the
Registrant's Form 10-K Report for the fiscal year ended December 31, 1994,
which will be filed with the Securities and Exchange Commission, Washington,
D.C., and any and all amendments thereto.
<TABLE>
<S> <C>
/s/ Tom H. Barrett, Director /s/ Robert M. Gerrity
------------------------------------------- ----------------------------------------------
Tom H. Barrett, Director Robert M. Gerrity, Director
Date: March 3, 1995 Date: March 3, 1995
------------------------------------ ---------------------------------------
/s/ Charles A. Carroll /s/ Karen N. Horn
------------------------------------------- ----------------------------------------------
Charles A. Carroll, Director Karen N. Horn, Director
Date: March 3, 1995 Date: March 3, 1995
------------------------------------ ---------------------------------------
/s/ Zoe Coulson /s/ William D. Marohn
------------------------------------------- ----------------------------------------------
Zoe Coulson, Director William D. Marohn, Director
Date: March 3, 1995 Date: March 3, 1995
------------------------------------ ---------------------------------------
/s/ Robert O. Ebert /s/ Steven A. Minter
------------------------------------------- ----------------------------------------------
Robert O. Ebert, Director Steven A. Minter, Director
Date: March 3, 1995 Date: March 3, 1995
------------------------------------ ---------------------------------------
/s/ Stanley C. Gault /s/ Jan Nicholson
------------------------------------------- ----------------------------------------------
Stanley C. Gault, Director Jan Nicholson, Director
Date: March 3, 1995 Date: March 3, 1995
------------------------------------ ---------------------------------------
/s/ Paul G. Schloemer
---------------------------
Paul G. Schloemer, Director
Date: March 3, 1995
-------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO AS OF DECEMBER 31, 1994
AND 1993, AND FOR EACH OF THE YEARS IN THE THREE YEAR PERIOD ENDED DECEMBER 31,
1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<CASH> 92,249
<SECURITIES> 59,049
<RECEIVABLES> 434,639
<ALLOWANCES> 11,062
<INVENTORY> 295,180
<CURRENT-ASSETS> 926,666
<PP&E> 1,163,183
<DEPRECIATION> 555,555
<TOTAL-ASSETS> 1,709,180
<CURRENT-LIABILITIES> 295,597
<BONDS> 11,576
<COMMON> 162,677
0
0
<OTHER-SE> 1,123,149
<TOTAL-LIABILITY-AND-EQUITY> 1,709,180
<SALES> 2,169,354
<TOTAL-REVENUES> 2,169,354
<CGS> 1,465,586
<TOTAL-COSTS> 1,465,586
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,198
<INCOME-PRETAX> 367,151
<INCOME-TAX> 139,025
<INCOME-CONTINUING> 228,126
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 228,126
<EPS-PRIMARY> 1.42
<EPS-DILUTED> 1.42
</TABLE>
