Newell Rubbermaid Posts Q1 2011 Results

Reports normalized EPS of $0.30; a 20% increase compared to 2010.

Newell Rubbermaid (NYSE: NWL) has announced first quarter 2011 financial results, including normalized diluted earnings per share of $0.30, a 20 percent improvement over prior year results, gross margin of 37.7 percent and 0.3 percent lower net sales. The company also announced it will raise its quarterly dividend 60 percent to 8 cents per share.

"First quarter results represent a solid start to the year, especially our earnings and gross margin performance," said Mark Ketchum, President and Chief Executive Officer. "We
remain confident in our ability to meet our full year guidance of 4 to 5 percent core sales growth, gross margin expansion of 50 to 75 basis points and normalized EPS growth of 10 to 12 percent. Our international businesses led the way, building on already strong momentum, with core sales growth of almost 5 percent. Developing markets, where we have substantially increased our focus and investment, grew double digits in the first quarter."

"Our topline performance fell short of expectations driven mainly by consumer trade down behavior and reduced promotional activity affecting two key businesses," added Ketchum. "We are taking steps to respond to these trends by introducing additional value priced items and restoring promotional activity behind our new product launches. These actions, in concert with already strong growth trends in our other businesses, give us confidence in our full year growth projections. In addition, our Board of Directors' decision to increase our quarterly dividend shows further confidence in our track record of strong cash flows and improving credit metrics."

Net sales in the first quarter were $1.30 billion, a decline of 0.3 percent compared with the prior year. Core sales contracted 1.7 percent and foreign currency translation had a
positive 1.4 percent impact on sales. The company estimates that core sales in last year's first quarter were favorably impacted by approximately 2.6 percent due to pre-buying by
certain customers in anticipation of the April 2010 SAP go live, and last year's fourth quarter core sales were favorably impacted by customer order acceleration to qualify for annual volume rebates. Together, these two events accounted for approximately $40 million in timing shifts. Adjusting for these timing differences, first quarter 2011 core sales growth would have been 1.5 percent.

Gross margin for the quarter was 37.7 percent, up 160 basis points from last year as pricing, favorable mix and productivity more than offset the impact of input cost inflation.
First quarter operating income, on a normalized basis, was $141.7 million, or 10.9 percent of sales, excluding $11.1 million of restructuring and restructuring-related costs incurred in connection with the European Transformation Plan. In 2010, normalized operating income was $146.1 million, or 11.2 percent of sales, excluding Project Acceleration restructuring costs of $16.0 million.