<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
----------------
Date of report (Date of earliest event reported): February 9, 1999
RUBBERMAID INCORPORATED
--------------------------------------------------
(Exact name of registrant as specified in charter)
Ohio 1-4188 34-0628700
---------------------------- --------------------- ------------------
(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
1147 Akron Road, Wooster, Ohio 44691-6000
---------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (330) 264-6464
----------------
N/A
------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
On February 9, 1999, the Company issued a press release announcing its
financial results for the fourth quarter of 1998 and for the full fiscal year
1998. The press release and the related financial information is filed as an
exhibit hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1 Text of Press Release and the related financial
information, dated February 9, 1999.
<PAGE> 3
SIGNATURE
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 hereunto duly authorized.
RUBBERMAID INCORPORATED
By: /s/ James A. Morgan
------------------------------------------
Name: James A. Morgan
Title: Senior Vice President,
General Counsel and Secretary
Dated: February 17, 1999
<PAGE> 4
EXHIBIT INDEX
Rubbermaid Incorporated
Current Report on Form 8-K
Dated February 17, 1999
Exhibit No. Title
----------- -----
99.1 Text of Press Release and related financial
information, dated February 9, 1999.
<PAGE> 1
Exhibit 99.1
RUBBERMAID POSTS 22 CENTS PER SHARE IN FOURTH QUARTER
ON A 7-PERCENT SALES GAIN
WOOSTER, Ohio, February 9, 1999 -- Rubbermaid Incorporated (NYSE: RBD)
today reported basic and diluted earnings per share of 22 cents before
restructuring and one-time merger costs for the fourth quarter ended January 1,
1999, compared with 21 cents per share in the same period of the previous year.
Net sales in the period increased seven percent to $616.9 million from $574.3
million in the prior year.
Net earnings for the fourth quarter of $3.8 million, or two cents per
share, included $26.9 million after-tax, or 18 cents per share, of charges
related to the restructuring of Rubbermaid's North American and European
operations and $2.4 million after-tax, or two cents per share, of merger-related
costs for its pending transaction with Newell Co. Net earnings in the similar
period of the prior year were $31.8 million, or 21 cents per share.
The restructuring program, previously announced in January 1998, is a
multi-year initiative to improve the company's capability to consistently
provide responsive, complete and on-time service to its customers, as well as
lower operating and distribution costs by approximately $200 million.
Specifically, the initiatives are to 1) leverage Rubbermaid's scale and buying
power by establishing a central global procurement organization; 2) transform
factories worldwide with advanced robotics and lean manufacturing principles and
consolidate distribution operations into expanded full-line product centers; and
3) increase consumer advertising, category management and product development.
Net sales in the quarter grew seven percent as the result of an
eight-percent increase in sales from acquisitions net of divestitures and a gain
in continuing core unit volume of two percent. Lower selling-price realization
and the effect of unfavorable currency exchange rates year-over-year reduced the
top line by three percent, but did not impair margins as a result of
<PAGE> 2
the savings generated by the centralized procurement organization and increased
productivity.
"The operating profitability of all of our business units increased
during the quarter, except, as expected, our Little Tikes juvenile products
business," said Wolfgang R. Schmitt, chairman and chief executive officer. "Our
Graco infant products business exceeded expectations, while the Rubbermaid
Commercial and Home Products businesses reported strong overall profitability
improvements. The gains in Europe are particularly noteworthy, as the
integration of Curver and Rubbermaid's businesses is proceeding ahead of our
planned schedule. In our juvenile products business, traditional toys maintained
positive momentum in consumer takeaway at retail, but overall we experienced
less-than-satisfactory sales, primarily related to an industry-wide change in
buying patterns and reduced inventory by certain retailers."
"The initiative to improve procurement and lower costs is well under
way and contributed to the 180 basis-point improvement in gross margin over last
year. However, in light of our pending merger with Newell Co., we temporarily
halted the planned consolidation and restructuring of our North American
manufacturing and distribution, in order to review those plans with Newell. As a
result, we achieved less-than-anticipated restructuring savings in the fourth
quarter. However, this review is now completed; and, with the benefit of
Newell's experience, we are moving boldly forward with an accelerated program of
converting to lean manufacturing and full-line distribution centers in our North
American and European operations, which in-turn should lead to improved
performance in 1999."
"Today, we are driving progress not only in our efforts to improve
consistency in customer service, but also in providing increased customized
product innovation and sophisticated category management to our account planning
teams. In addition, due to the extensive planning and management interaction
that has marked the merger process since last October, we are ready to give the
<PAGE> 3
combined company a fast start once shareholders approve the merger. Already,
much has been accomplished in such areas as systems standardization and
identifying common processes to ensure that the transition is smooth and quick."
1998 year results
For the full year, net earnings, before restructuring and other
non-operating gains and charges were $145.4 million, or $.97 per share on a
basic and diluted shares basis, compared with $132.8 million, or $.89 per share,
for 1997, before gains and charges. Included in 1998 net earnings of $82.9
million, or $.55 per share, is a non-operating gain of $14.7 million after-tax,
or 10 cents per share, primarily related to the divestiture of the Decorative
Coverings product line in the second quarter, offset by merger-related costs and
the previously mentioned restructuring program charges which totaled $77.2
million after-tax, or $.52 per share. Of the restructuring charge pre-tax, $44.1
million is for non-cash items and the remainder was or will be paid out in cash.
Included in 1997 net earnings of $142.5 million, or $.95 per share, is a
non-operating gain of $79.4 million after-tax, or $.53 per share, related to the
sale of the Office Products business, partially offset by a charge of $69.7
million after-tax, or $.47 per share, for restructuring and asset impairment
write-downs. Of the 1997 charge, $97.0 million, or all of the charge pre-tax, is
of a non-cash nature.
Net sales were $2.554 billion, a six-percent increase compared with
$2.400 billion in 1997. Net sales grew as acquisitions, net of divestitures,
added six percent to volume, and continuing core unit volume increased three
percent. Lower selling prices and unfavorable currency exchange rates reduced
sales by three percent for the year.
"During 1998, Rubbermaid associates demonstrated industry leadership in
category management and new product innovation. They continued to strengthen the
brand franchise and achieved high
<PAGE> 4
levels of productivity," said Schmitt. "And, we look forward to working with
Newell to realize the major upside potential stemming from the power of this
combination. In the competitive arena for global retailers, together we will be
an invaluable resource to our customers and create exciting new products for
consumers."
Rubbermaid Incorporated, headquartered in Wooster, Ohio, is a
multi-national, leading-brand manufacturer and marketer of high-quality,
innovative products, including Rubbermaid(R) and Curver(R) consumer and
commercial products; Little Tikes(R) traditional toys and commercial play
systems; and Graco(R) and Century(R) infant products.
Safe Harbor Statement under the Private Securities Litigation Act of 1995: As
with any statements, other than those reflecting historical fact,
forward-looking statements contained in this announcement involve risk, and, as
such, future financial performance may differ from current expectations due to a
variety of marketplace factors. These factors include, without limitation, those
disclosed in the company's Form 10-K filing with the Securities and Exchange
Commission and with respect to Rubbermaid's proposed merger with Newell, those
disclosed in the joint proxy statement filed by Newell and Rubbermaid with the
Securities and Exchange Commission.
# # #
Analysts' contact:
William H. Pfund
330/264-6464, Ext. 2477
Media contact:
Lorrie Paul Crum
330/264-6464, Ext. 2970
<PAGE> 5
Rubbermaid Incorporated and subsidiaries report for the periods ended January 1,
1999 and December 31, 1997: (Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
------------------ -------------------
Jan. 1, 1999 Dec. 31, 1997 Jan.1, 1999 Dec. 31, 1997
------------ ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BASIC AND DILUTED
- -----------------
NET EARNINGS PER
- ----------------
COMMON SHARE (Note 1) $ .02 $ .21 $ .55 $ .95
------------ =========== =========== =========== ===========
STATEMENT OF EARNINGS
- ---------------------
Net sales $ 616,886 $ 574,285 $ 2,553,715 $ 2,399,701
Cost of sales 440,516 420,368 1,824,080 1,748,424
----------- ----------- ----------- -----------
Gross Profit 176,370 153,917 729,635 651,277
Selling, general and
administrative expenses 124,277 102,412 478,083 416,641
Restructuring costs 41,415 -- 115,154 16,000
Interest expense, net 9,631 7,299 37,426 35,762
Other charges (credits), net (4,866) (1,237) (28,615) (51,032)
----------- ----------- ----------- -----------
Earnings before income taxes 5,913 45,443 127,587 233,906
Income taxes 2,070 13,653 44,656 91,370
----------- ----------- ----------- -----------
Net earnings $ 3,843 $ 31,790 $ 82,931 $ 142,536
=========== =========== =========== ===========
DIVIDENDS
- ---------
Cash dividends paid $ 24,119 $ 23,967 $ 96,014 $ 91,422
Cash dividends paid
per Common Share $ .16 $ .16 $ .64 $ .61
</TABLE>
(MORE)
<PAGE> 6
<TABLE>
<CAPTION>
Jan. 1, 1999 Dec. 31, 1997
---------------- ---------------
BALANCE SHEET
- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 29,041 $ 114,024
Receivables, net 426,176 391,282
Inventories 319,776 250,597
Other current assets 85,400 60,301
---------- ----------
Total current assets 860,393 816,204
Property, plant and equipment, net 800,221 707,974
Intangible and other assets, net 467,245 399,716
---------- ----------
Total assets $2,127,859 $1,923,894
========== ==========
Current liabilities:
Notes payable $ 400,628 $ 223,744
Long-term debt, current 251 281
Payables 157,752 160,820
Accrued liabilities 189,880 182,239
---------- ----------
Total current liabilities 748,511 567,084
Other deferred liabilities 183,811 153,385
Long-term debt, non-current 152,493 153,163
Shareholders' equity 1,043,044 1,050,262
---------- ----------
Total liabilities and shareholders' equity $2,127,859 $1,923,894
========== ==========
<FN>
(1) Based on average shares outstanding of 150,079,724 and 149,771,672 for the
respective 1998 and 1997 three-month periods and 149,926,206 and
149,849,551 for the respective twelve-month periods. For the periods
presented, the dilutive effect of stock options is not significant.
</TABLE>
#####
