<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1995
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
------------------------------------
(Address of principal executive offices and zip code)
216-264-6464
------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
Yes __ X__ No ______
Common Shares, Par Value $1.00, Outstanding at June 30, 1995 -- 158,095,947
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
------------------
June 30, 1995 June 30, 1994
------------- -------------
<S> <C> <C>
Net sales $556,844 $531,098
Cost of sales 409,991 362,432
Selling, general, and administrative expenses 96,406 85,171
Other charges (credits),net:
Interest expense 3,260 1,773
Interest income (947) (1,175)
Miscellaneous, net 2,072 (7,894)
-------- --------
4,385 (7,296)
-------- --------
Earnings before income taxes 46,062 90,791
Income taxes 17,252 34,646
-------- --------
Net earnings $ 28,810 $ 56,145
======== ========
Net earnings per Common Share (note 2) $ .18 $ .35
======== ========
Dividends paid per Common Share (note 3) $ .1250 $ .1125
======== ========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 3
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (Unaudited)
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30, 1995 June 30, 1994
------------- -------------
<S> <C> <C>
Net sales $1,120,700 $1,022,746
Cost of sales 796,519 689,693
Selling, general, and administrative expenses 187,176 166,868
Other charges (credits), net:
Interest expense 5,202 3,635
Interest income (2,606) (2,508)
Miscellaneous, net 1,658 (8,057)
---------- ----------
4,254 (6,930)
---------- ----------
Earnings before income taxes 132,751 173,115
Income tax 49,800 66,349
---------- ----------
Net earnings $ 82,951 $ 106,766
========== ==========
Net earnings per Common Share (note 2) $ .52 $ .67
========== ==========
Dividends paid per Common Share (note 3) $ .250 $ .225
========== ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 4
<TABLE>
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share amounts)
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
(Unaudited)
Assets
------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 48,232 $ 92,249
Marketable securities -- 59,049
Receivables, less allowance for doubtful accounts
of $9,837 in 1995 and $11,062 in 1994 463,032 471,384
Inventories (note 4) 353,758 295,180
Prepaid expenses 16,106 8,804
---------- ----------
Total current assets 881,128 926,666
Property, plant, and equipment, net 642,012 607,628
Intangible and other assets, net (note 5) 187,892 174,886
---------- ----------
Total Assets $1,711,032 $1,709,180
========== ==========
(Continued)
</TABLE>
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<PAGE> 5
<TABLE>
RUBBERMAID INCORPORATED AND SUBSIDIARIES (Continued)
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in thousands except per share amounts)
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
(Unaudited)
<S> <C> <C>
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 54,231 $ 20,374
Long-term debt, current 4,343 1,783
Payables 131,410 102,681
Accrued liabilities 140,316 170,759
---------- ----------
Total current liabilities 330,300 295,597
Other deferred liabilities 128,378 116,181
Long-term debt, non-current 16,524 11,576
Shareholders' equity :
Preferred stock, without par value.
Authorized 20,000,000 shares; none issued -- --
Common Shares of $1 par value.
Authorized 400,000,000 shares; issued
162,677,082 shares in 1995 and 1994 162,677 162,677
Paid-in capital 70,280 69,795
Retained earnings 1,143,747 1,120,629
Foreign currency translation adjustment (13,917) (16,583)
Treasury shares, at cost (4,581,135 shares in
1995 and 1,875,830 shares in 1994) (126,957) (50,692)
---------- ----------
Total shareholders' equity 1,235,830 1,285,826
---------- ----------
Total Liabilities and Shareholders' Equity $1,711,032 $1,709,180
========== ==========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 6
<TABLE>
RUBBERMAID INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)
( ) Denotes decrease in cash and cash equivalents
<CAPTION>
Six Months Ended
----------------
June 30, 1995 June 30, 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 82,951 $ 106,766
Adjustments to reconcile net earnings to net
cash from operating activities:
Depreciation and amortization 55,067 51,650
Changes in accounts receivable 17,387 (120,607)
Changes in inventories (52,892) 14,242
Changes in payables 5,442 (46,023)
Changes in accrued liabilities (25,593) 10,606
Other, net (4,984) 16,707
--------- ---------
Net cash from operating activities 77,378 33,341
Cash flows from investing activities:
Purchase of marketable securities (99,151) (113,599)
Proceeds from sale of marketable securities 158,200 127,660
Capital expenditures (75,393) (48,549)
Other, net (14,808) (10,956)
--------- ---------
Net cash from investing activities (31,152) (45,444)
Cash flows from financing activities:
Net change in notes payable 33,503 3,007
Proceeds from long-term debt -- 3,011
Repayment of long-term debt (461) (11,861)
Cash dividends paid (40,083) (36,098)
Common Shares repurchased (83,702) --
Other, net 500 --
--------- ---------
Net cash from financing activities (90,243) (41,941)
--------- ---------
Net change in cash and cash equivalents (44,017) (54,044)
Cash and cash equivalents at beginning of year 92,249 127,802
--------- ---------
Cash and cash equivalents at June 30 $ 48,232 $ 73,758
========= =========
Supplemental cash flow information:
Income taxes paid $ 59,211 $ 55,748
Interest paid $ 4,125 $ 3,433
========= =========
<FN>
See accompanying notes to condensed consolidated financial statements.
</TABLE>
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<PAGE> 7
RUBBERMAID INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
----------------------------------------------------------------
(Dollars in thousands)
(1) In the opinion of management the information furnished herein includes all
the adjustments necessary for a fair presentation of the results for the
interim periods and all such adjustments are of a normal recurring nature.
(2) Net earnings per Common Share is computed based on average shares
outstanding of 159,574,805 and 160,470,405 for the respective 1995 and
1994 three-month periods and 160,153,499 and 160,440,338 for the
respective six-month periods.
(3) The actual number of shares outstanding on the respective record dates is
as follows:
<TABLE>
<CAPTION>
1995 1994
---------------------------------- ---------------------------------
Record Date No. Shares Record Date No. Shares
----------- ---------- ----------- ----------
<S> <C> <C> <C>
February 10 161,008,984 February 11 160,440,356
May 12 159,652,695 May 13 160,431,004
</TABLE>
(4) A summary of inventories follows:
<TABLE>
<CAPTION>
June 30, 1995 Dec. 31, 1994
------------- -------------
<S> <C> <C>
FIFO Cost:
Raw materials $109,275 $ 93,960
Work-in-process 17,694 16,555
Finished goods 257,697 209,140
-------- ---------
384,666 319,655
Excess of FIFO over LIFO cost (30,908) (24,475)
-------- ---------
$353,758 $295,180
======== ========
</TABLE>
(5) At June 30, 1995, and December 31, 1994, intangible and other assets, net
include the excess of cost over net assets of businesses acquired of
$123,241 and $118,579, respectively, net of accumulated amortization of
$18,285 and $16,768, respectively.
(6) 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, accounted for by the equity method.
In March 1995, the Company acquired Injectaplastic S.A., headquartered in
Oyonnax, France, a leading manufacturer and marketer of plastic
housewares, seasonal products and bath accessories in the French market,
in a cash and stock transaction accounted for as a purchase. This
acquisition marks Rubbermaid's reentry into the European home and
seasonal products market.
In April 1995, the Company acquired PAR-REC Holdings, Inc., a Canadian
manufacturer of commercial playground equipment, in a cash transaction
accounted for as a purchase.
LIMITED REVIEW
--------------
The Company's independent public accountants have made a limited review of the
financial information furnished herein, in accordance with standards
established by the American Institute of Certified Public Accountants. See
Exhibit 15.
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<PAGE> 8
RUBBERMAID INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
- ---------------------
Net sales for the three-month period ended June 30, 1995 increased 5% over the
second quarter of 1994. Higher selling prices contributed 5% of the sales
increase while unit volume was flat. Acquisitions, net of divestitures,
contributed 6% to sales and volume. For the six-month period ended June 30,
1995, sales increased 10% over the comparable 1994 period. Unit volume
increased 6% in the year-to-date period, including 5% from acquisitions, net of
divestitures, while higher selling prices contributed 4% of the total sales
increase.
Net earnings for the three-month and six-month year-to-date periods ended June
30, 1995 decreased 49% and 22%, respectively, over the comparable 1994 periods,
reflecting unprecedented increases in plastic resin costs, and lackluster
consumer spending in the second quarter. In addition, prior year's second
quarter earnings benefited from a one-time, non-operating gain on the
dissolution of the European housewares joint venture.
Cost of sales as a percent of net sales for the three-month and six-month
year-to-date periods was higher than the comparable 1994 periods, reflecting
the higher costs for plastic resins, packaging and colorants, and the negative
effects of intentionally decelerating manufacturing production during the
second quarter. These unfavorable factors were partially offset by continued
productivity improvements and other cost savings. LIFO expense for the second
quarter of 1995 was $3.6 million compared to $2.3 million for the second
quarter of 1994.
Selling, general, and administrative expenses as a percent of net sales for the
three-month and the six-month year-to-date periods were higher than the
comparable 1994 periods. These increases reflect higher marketing expenses on
lower-than-planned sales levels and the negative impact of consolidating
acquisitions having higher selling, general and administrative expenses as a
percent of net sales.
Other charges (credits), net were a net charge for the second quarter and first
half of 1995 compared with a net credit in the comparable periods of 1994. The
unfavorable swing is primarily due to higher net interest expense in 1995 and a
gain in the second quarter of 1994 from the dissolution of the European
housewares joint venture.
The effective tax rate for the second quarter of 1995 was 37.5% versus 38.2% in
the second quarter of 1994, and was 37.5% for the six months year-to-date
versus 38.3% in the comparable 1994 period. The effective tax rate for all of
1994 was 37.9%.
Changes in Financial Condition
- ------------------------------
During the first six months of 1995, cash and cash equivalents decreased by
$44.0 million as cash generated from operations of $77.4 million was exceeded
by cash used for investing activities of $31.2 million and cash used for
financing activities of $90.2 million. Cash generated from operations was
primarily the result of net
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<PAGE> 9
RUBBERMAID INCORPORATED AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Changes in Financial Condition (Continued)
- ------------------------------
earnings, non-cash depreciation charges, and reduced accounts receivable
exceeding an increase in inventories and reduced accrued liabilities. Reduced
accounts receivable reflected management's action in the second quarter to
bring the growth rate of accounts receivable more in line with sales growth.
The increase in inventories is primarily the result of substantially higher raw
material costs. Cash used by investing activities was primarily the result of
cash used to purchase marketable securities, investment in capital
expenditures, and the purchase of Injectaplastic S.A. and Par-Rec Holdings,
Inc. exceeding the proceeds from the sale of marketable securities. Cash used
for financing activities primarily consisted of cash dividends paid to
shareholders and the repurchase of 2.8 million common shares for the Company's
treasury which exceeded increases in notes payable.
Other
- -----
During the first quarter, the joint venture with Royal Plastics of Canada,
Royal Rubbermaid Structures Ltd., was formally launched. This venture
manufactures and markets modular, plastic components and kits for small
structures, such as storage buildings and sheds in consumer, industrial,
commercial and agricultural markets. The Company continued the integration of
Empire Brushes, acquired in 1994, with the existing Rubbermaid cleaning
business to form a Cleaning and Maintenance Products unit. Also in the first
quarter, the Company acquired Injectaplastic S.A., headquartered in Oyonnax,
France, a leading manufacturer and marketer of plastic housewares, seasonal
products and bath accessories in the French market.
During the second quarter, the Company acquired Par-Rec Holdings, Inc., a
Canadian manufacturer of commercial playground equipment. Royal Rubbermaid
Structures, Ltd. began the manufacture of small plastic structures and began
shipping to customers at quarter end. The Company continued the integration of
Empire Brushes and Injectaplastic, S.A., and relocated the operations of
Rubbermaid Health Care Products (formerly Carex Health Care Products, acquired
in 1994) from a leased facility in New Jersey to an existing, larger facility
in North Carolina that offers immediate and future expansion opportunities.
For further information relating to the Company's business development
activities, refer to Note 6 of the Condensed Consolidated Financial Statements.
- 8 -
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders:
At the Annual Meeting of Shareholders held on April 25, 1995, the
Shareholders of Registrant voted on the following matters with
results as indicated:
A. The election of four Directors to the class of Directors whose
terms expire in 1998.
<TABLE>
<CAPTION>
Vote
For Withheld
--- --------
<S> <C> <C>
Tom H. Barrett 135,261,326 470,827
Charles A. Carroll 135,268,747 463,706
Robert O. Ebert 135,234,907 497,246
Steven A. Minter 135,242,703 489,450
</TABLE>
B. A shareholder proposal concerning the tabulation of proxies.
<TABLE>
<S> <C> <C> <C>
For 13,469,621 Abstain 1,957,549
Against 102,024,737 Broker No-Vote 18,280,246
</TABLE>
Item 6. Exhibit and Reports on Form 8-K.
(a) Exhibit 15. Letter regarding unaudited interim financial
information.
(b) There were no reports on Form 8-K for the three months ended
June 30, 1995.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
RUBBERMAID INCORPORATED
DATE: August 10, 1995 /s/ James A. Morgan
--------------- ------------------------------
James A. Morgan
Senior Vice President,
General Counsel and Secretary
DATE: August 10, 1995 /s/ John L. Theler
--------------- ------------------------------
John L. Theler
Vice President & Corporate Controller,
(Chief Accounting Officer)
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<PAGE> 1
Exhibit 15
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors
Rubbermaid Incorporated
We have reviewed the accompanying condensed consolidated balance sheets of
Rubbermaid Incorporated and subsidiaries as of June 30, 1995, and the related
condensed consolidated statements of earnings for the three- and six-month
periods ended June 30, 1995 and 1994, and cash flows for the six-month periods
ended June 30, 1995 and 1994. These condensed consolidated financial
statements are the responsibility of the Company's management. We conducted
our review in accordance with standards established by the American Institute
of Certified Public Accountants. A review of interim financial information
consists principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the expression
of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above
for them to be in conformity with generally accepted accounting principles. We
have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of Rubbermaid Incorporated and
subsidiaries as of December 31, 1994 and the related consolidated statements of
earnings, cash flows, and shareholders' equity for the year then ended (not
presented herein); and in our report dated January 31, 1995, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed consolidated
balance sheet as of December 31, 1994, is fairly presented in all material
respects in relation to the consolidated balance sheet from which it has been
derived.
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
July 14, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1995 AND RELATED CONDENSED
CONSOLIDATED STATEMENT OF EARNINGS FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1995
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 48,232
<SECURITIES> 0
<RECEIVABLES> 428,266
<ALLOWANCES> 9,837
<INVENTORY> 353,758
<CURRENT-ASSETS> 881,128
<PP&E> 1,247,168
<DEPRECIATION> 605,156
<TOTAL-ASSETS> 1,711,032
<CURRENT-LIABILITIES> 330,300
<BONDS> 16,524
<COMMON> 162,677
0
0
<OTHER-SE> 1,073,153
<TOTAL-LIABILITY-AND-EQUITY> 1,711,032
<SALES> 1,120,700
<TOTAL-REVENUES> 1,120,700
<CGS> 796,519
<TOTAL-COSTS> 796,519
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,202
<INCOME-PRETAX> 132,751
<INCOME-TAX> 49,800
<INCOME-CONTINUING> 82,951
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 82,951
<EPS-PRIMARY> .52
<EPS-DILUTED> .52
</TABLE>
