Newell Brands to Reaffirm Fiscal Year 2016 Outlook at Barclays Global Consumer Staples Conference
Newell Brands Inc. (NYSE: NWL) announced it will reaffirm its fiscal year 2016 outlook, as provided in its second quarter 2016
earnings press release dated July 29, 2016, during its presentation today at the Barclays Global Consumer Staples Conference.
The company is reaffirming its full year 2016 guidance as follows:
|
|
|
|
|
|
|
Year Ending December 31, 2016 |
| Core sales growth |
|
|
3.0% to 4.0% |
| |
| Normalized earnings per share |
|
|
$2.75 to $2.90 |
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|
|
|
Newell Brands core sales include pro forma core sales associated with the Jarden acquisition as if the combination occurred
April 15, 2015. Core sales exclude the impact of foreign currency, all acquisitions (other than the Jarden acquisition) until their
first anniversary and all planned and completed divestitures (which includes the deconsolidation of Venezuela). Core sales include
the negative impact of planned product line exits. Newell Brands expects to exit product lines with annual sales of $250 million to
$300 million over the next two to three years.
Chief Executive Officer Michael Polk will present today at 1:30 p.m. ET. The presentation will be webcast live and may be
accessed through Events & Presentations in the Investor Relations section of the Newell Brands website at www.newellbrands.com. The webcast will be archived and available for replay following the live presentation.
About Newell Brands
Newell Brands (NYSE: NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including
Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Jostens®, Marmot®, Rawlings®, Irwin®, Lenox®, Oster®, Sunbeam®,
FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First
Alert®, Waddington and Yankee Candle®. Driven by a sharp focus on the consumer, leading investment in innovation and brands, and a
performance-driven culture, Newell Brands helps consumers achieve more where they live, learn, work and play.
This press release and additional information about Newell Brands are available on the company’s website, www.newellbrands.com.
Non-GAAP Financial Measures
This release contains non-GAAP financial measures within the meaning of Regulation G promulgated by the Securities and Exchange
Commission and includes a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures
calculated in accordance with GAAP.
The company uses certain non-GAAP financial measures that are included in this press release and the additional financial
information both in explaining its results to stockholders and the investment community and in its internal evaluation and
management of its businesses. The company’s management believes that these non-GAAP financial measures and the information they
provide are useful to investors since these measures (a) permit investors to view the company’s performance using the same tools
that management uses to evaluate the company’s past performance, reportable business segments and prospects for future performance
and (b) determine certain elements of management’s incentive compensation.
The company’s management believes that core sales provides a more complete understanding of underlying sales trends by providing
sales on a consistent basis as it excludes the impacts of acquisitions (other than the Jarden acquisition, which is included in
core sales on a pro forma basis starting in the second quarter of 2016), planned or completed divestitures, the deconsolidation of
the company’s Venezuelan operations and changes in foreign currency from year-over-year comparisons. The effect of foreign currency
on reported sales is determined by applying a fixed exchange rate, calculated as the 12-month average in the prior year, to the
current and prior year local currency sales amounts (excluding acquisitions and planned and completed divestitures), with the
difference in these two amounts being the increase or decrease in core sales, and the difference between the change in as reported
sales and the change in constant currency sales reported as the currency impact. The company’s management believes that
“normalized” earnings per share, which exclude restructuring and other expenses and one-time and other events such as costs related
to certain product recalls, the extinguishment of debt, certain tax benefits and charges, impairment charges, pension settlement
charges, discontinued operations, costs related to the acquisition, integration and financing of acquired businesses, amortization
of intangible assets associated with acquisitions (beginning in the second quarter of 2016), advisory costs for process
transformation and optimization initiatives, costs of personnel dedicated to integration activities and transformation initiatives
under Project Renewal and certain other items, is useful because it provides investors with a meaningful perspective on the current
underlying performance of the company’s core ongoing operations.
The company determines the tax effect of the items excluded from normalized diluted earnings per share by applying the estimated
effective rate for the applicable jurisdiction in which the pre-tax items were incurred, and for which realization of the resulting
tax benefit, if any, is expected. In certain situations, in which an item excluded from normalized results impacts income tax
expense, the company uses a “with” and “without” approach to determine normalized income tax expense.
While the company believes that these non-GAAP financial measures are useful in evaluating the company’s performance, this
information should be considered as supplemental in nature and not as a substitute for or superior to the related financial
information prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ from similar measures
presented by other companies.
Reconciliation of Non-GAAP Financial Measures
Reconciliations of the 2016 core sales growth and normalized earnings per share outlooks are as follows:
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|
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Year Ending December 31, 2016 |
| Estimated net sales growth (GAAP) |
|
|
122.0 |
% |
|
to |
|
|
127.0 |
% |
| Less: Jarden net sales growth included in pro forma base |
|
|
115.0 |
% |
|
to |
|
|
120.0 |
% |
| Net sales growth, adjusted pro forma (1) |
|
|
7.0 |
% |
|
to |
|
|
8.0 |
% |
| Less: Currency |
|
|
(1.0 |
%) |
|
to |
|
|
(2.0 |
%) |
| Acquisitions, net of divestitures (2) |
|
|
6.0 |
% |
|
to |
|
|
7.0 |
% |
| Venezuela deconsolidation |
|
|
|
(1.0%) |
|
|
| Core sales growth, adjusted pro forma |
|
|
3.0 |
% |
|
to |
|
|
4.0 |
% |
| |
|
(1) Adjusted pro forma reflects Jarden sales from April 16, 2016 and 2015, respectively.
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| |
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(2) Acquisitions, net of divestitures represents estimated sales of The Waddington Group, Inc.,
Jostens, Inc. and Elmer's Products, Inc. until the one-year anniversary of their respective dates of acquisition, net of the
impacts of the divestiture of the Rubbermaid medical cart business in August 2015 and the divestiture of the Levolor and
Kirsch window coverings brands ("Décor") in June 2016.
|
| |
| |
|
|
Year Ending December 31, 2016 |
| Diluted earnings per share |
|
$ |
1.45 |
|
|
to |
|
$ |
1.60 |
|
| Project Renewal and Project Lean restructuring and other costs |
|
$ |
0.25 |
|
|
to |
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$ |
0.35 |
|
| Integration costs to drive synergies |
|
$ |
0.15 |
|
|
to |
|
$ |
0.25 |
|
| Estimated gain on sale of Décor* |
|
$ |
(0.24 |
) |
|
to |
|
$ |
(0.26 |
) |
|
Jarden transaction-related costs, including debit/credit facility extinguishment costs
|
|
$ |
0.15 |
|
|
to |
|
$ |
0.25 |
|
| Acquisition-related amortization** and inventory step-up |
|
$ |
0.75 |
|
|
to |
|
$ |
0.95 |
|
| Normalized earnings per share |
|
$ |
2.75 |
|
|
to |
|
$ |
2.90 |
|
|
|
|
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|
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* Gain on sale of Décor in the second quarter of 2016 was $160 million but subject to customary
working capital adjustments
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** Represents amortization of acquisition-related intangibles beginning in the second quarter of
2016.
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| |
Caution Concerning Forward-Looking Statements
Statements in this press release that are not historical in nature constitute forward-looking statements. These forward-looking
statements relate to information or assumptions about the effects of sales, income, earnings per share, operating income, operating
margin or gross margin improvements or declines, Project Renewal, capital and other expenditures, cash flow, dividends,
restructuring and other project costs, costs and cost savings, inflation or deflation, particularly with respect to commodities
such as oil and resin, debt ratings, changes in exchange rates, expected benefits and financial results from the Jarden transaction
and other recently completed acquisitions and related integration activities and planned divestitures and management's plans,
projections and objectives for future operations and performance. These statements are accompanied by words such as "anticipate,"
"expect," "project," "will," "believe," "estimate" and similar expressions. Actual results could differ materially from those
expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from
those suggested by the forward-looking statements include, but are not limited to, our dependence on the strength of retail,
commercial and industrial sectors of the economy in light of the continuation or escalation of the global economic slowdown or
regional sovereign debt issues; currency fluctuations; competition with other manufacturers and distributors of consumer products;
major retailers' strong bargaining power and consolidation of our retail customers; changes in the prices of raw materials and
sourced products and our ability to obtain raw materials and sourced products in a timely manner from suppliers; our ability to
develop innovative new products and to develop, maintain and strengthen our end-user brands, including the ability to realize
anticipated benefits of increased advertising and promotion spend; product liability, product recalls or regulatory actions; our
ability to expeditiously close facilities and move operations while managing foreign regulations and other impediments; a failure
of one of our key information technology systems or related controls; our ability to attract, retain and motivate key employees;
future events that could adversely affect the value of our assets and require impairment charges; our ability to improve
productivity and streamline operations; changes to our credit ratings; significant increases in the funding obligations related to
our pension plans due to declining asset values, declining interest rates or otherwise; the imposition of tax liabilities greater
than our provisions for such matters; the risks inherent in our foreign operations, including exchange controls and pricing
restrictions; our ability to complete planned divestitures; our ability to successfully integrate acquired businesses, including
the recently acquired Jarden business; our ability to realize the expected benefits and financial results from our recently
acquired businesses and planned divestitures; and those factors listed in our filings with the Securities and Exchange Commission
(including the information set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K). Changes in such
assumptions or factors could produce significantly different results. The information contained in this news release is as of the
date indicated. The company assumes no obligation to update any forward-looking statements contained in this news release as a
result of new information or future events or developments.
Investor Contact:
Newell Brands
Nancy O’Donnell, +1-770-418-7723
Vice President, Investor Relations
nancy.odonnell@newellco.com
or
Media Contacts:
Newell Brands
Tom Sanford, +1-973-600-3880
Vice President, Global Communications
tom.sanford@newellco.com
or
Weber Shandwick
Liz Cohen, +1-212-445-8044
liz.cohen@webershandwick.com
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