Newell Rubbermaid Reports Second Quarter 2009 Results

Newell Rubbermaid (NYSE: NWL) today announced second quarter 2009

financial results that exceeded the company’s guidance. The company

reported strong operating cash flow and gross margin improvement and

raised its guidance for full year 2009 normalized earnings and operating

cash flow.

“Although business conditions remained challenging during the quarter,

we were pleased and encouraged to deliver second quarter earnings and

cash flow ahead of expectations,” said Mark Ketchum, president and chief

executive officer of Newell Rubbermaid. “I'm particularly pleased with

the improvement in gross margin, reflecting the benefits from our

planned product exits as well as a more reasonable input cost

environment compared with a year ago. We continued to actively manage

our cost base and generated strong operating cash flow through a

diligent focus on working capital management. Our success in managing

what we can control through the first half of 2009 gives us confidence

to judiciously increase our level of strategic SG&A investments in the

second half of the year, supporting our brands with focused marketing

spending and other strategic brand building activities, while still

raising our guidance for full year normalized EPS and operating cash

flow.”

Net sales declined 17.6 percent to $1.50 billion in the second quarter,

compared to $1.83 billion in the prior year. The reported sales results

are more favorable than the guidance of a 20 percent decline. Core sales

were down approximately 8 percent, while planned product line exits and

foreign currency translation reduced net sales by 6 percent and 4

percent, respectively.

Gross margin for the quarter was 37.1 percent, up 300 basis points from

last year, as the positive impact from product line exits, lower input

costs and 2008 pricing initiatives more than offset the effects of

reduced manufacturing volumes and unfavorable mix.

Excluding Project Acceleration restructuring costs of $29.5 million in

2009 and $69.4 million in 2008, operating income was $229.0 million, or

15.2 percent of sales, in the second quarter 2009, compared to $230.3

million, or 12.6 percent of sales, in the prior year.

Normalized earnings, which exclude Project Acceleration restructuring

costs, related impairment charges and associated tax effects, and other

items, were $0.47 per diluted share, ahead of the company’s guidance and

compared to $0.49 per diluted share in the second quarter 2008. Other

items in the second quarter 2009 include dilution of $0.01 per diluted

share related to the conversion feature of the convertible notes issued

in March 2009 and one-time costs of $0.01 per diluted share incurred for

the early retirement of $325 million principal amount of medium-term

notes. (A reconciliation of the “as reported” results to “normalized”

results is included below.)

Net income, as reported on a GAAP basis, was $105.7 million, or $0.37

per diluted share. This compares to $92.5 million, or $0.33 per diluted

share, in the second quarter 2008.

The company generated operating cash flow of $99.2 million during the

second quarter, driven by working capital management, compared to $1.9

million in the prior year. Capital expenditures were $38.3 million in

the second quarter, approximately flat to last year.

A reconciliation of the second quarter 2009 and last year’s results

is as follows:

Six Months Results

Net sales for the six months ended June 30, 2009 declined 16.9 percent

to $2.71 billion, compared to $3.26 billion in the prior year. Internal

sales, which exclude the effect of significant acquisitions, declined

18.5 percent for the six months. Foreign currency translation reduced

net sales by 4 percent, while planned product line exits lowered net

sales by 5 percent. Core sales softness contributed the remainder of the

net sales decline.

Gross margin was 36.2 percent, a 200 basis point improvement versus the

prior year. The positive impact from planned product line exits, lower

input costs and 2008 pricing actions more than offset the effect of

reduced production volumes and unfavorable mix.

Normalized earnings, which exclude Project Acceleration restructuring

costs, related impairment charges and associated tax effects, and other

items, were $0.67 per diluted share, compared to the prior year’s

results of $0.75 per diluted share. Other items in the first six months

of 2009 were the same as those for the second quarter 2009. (A

reconciliation of the “as reported” results to “normalized” results is

included below.)

Net income, as reported on a GAAP basis, was $139.4 million, or $0.49

per diluted share. This compares to $149.4 million, or $0.54 per diluted

share, in the prior year.

The company generated operating cash flow of $88.0 million during the

first six months of 2009, compared to a use of $121.3 million in the

prior year. Capital expenditures were $70.7 million, compared to $78.2

million in the prior year.

A reconciliation of the first six months 2009 and last year’s results

is as follows:

2009 Full Year Guidance

The company expects net sales for the full year will decline at the

unfavorable end of the company’s guidance of down 10 to 15 percent. The

company continues to expect a 4 to 6 percent sales decline from product

line exits and now expects a 2 to 3 percent sales decline from foreign

currency translation. Acquisitions are expected to contribute about 1

percent of sales growth. Core sales are expected to decline in the high

single digit percent range.

The company is raising its guidance for normalized earnings to $1.15 to

$1.30 per diluted share and is also raising its guidance for operating

cash flow to approximately $500 million, which is net of approximately

$100 million in restructuring cash payments.

2009 Third Quarter Guidance

The company anticipates net sales will decline in the high teens percent

range for the third quarter 2009. Product line exits are projected to

reduce sales by 6 to 8 percent, and foreign currency translation is

expected to reduce sales by 2 to 4 percent. Core sales are expected to

decline in the high single digit percent range.

The company expects normalized earnings of $0.25 to $0.35 per diluted

share and operating cash flow of between $200 and $250 million.

A reconciliation of the third quarter and full year 2009 earnings

outlook is as follows:

Conference Call

The company’s second quarter 2009 earnings conference call is scheduled

for today, July 30, 2009, at 10:00 am ET. To listen to the webcast, use

the link provided under Events & Presentations in the Investor Relations

section of Newell Rubbermaid’s Web site at www.newellrubbermaid.com.

The webcast will be available for replay for two weeks. A brief

supporting slide presentation will be available prior to the call under

Quarterly Earnings in the Investor Relations section on the company’s

Web site.

Non-GAAP Financial Measures

This release contains non-GAAP financial measures within the meaning of

Regulation G promulgated by the Securities and Exchange Commission.

Included in this release is a reconciliation of these non-GAAP financial

measures to the most directly comparable financial measures calculated

in accordance with GAAP.

About Newell Rubbermaid

Newell Rubbermaid Inc., an S&P 500 company, is a global marketer of

consumer and commercial products with sales of approximately $6 billion

and a strong portfolio of brands, including Rubbermaid^®,

Sharpie^®, Graco^®, Calphalon^®, Irwin^®,

Lenox^®, Levolor^®, Paper Mate^®, Dymo^®,

Waterman^®, Parker^®, Goody^®, Technical

Concepts^TM and Aprica^®.

This press release and additional information about Newell Rubbermaid

are available on the company’s Web site, www.newellrubbermaid.com.

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/(loss), earnings per share, operating income or gross margin

improvements or declines, Project Acceleration, capital and other

expenditures, cash flow, dividends, restructuring costs, costs and cost

savings, inflation, particularly with respect to commodities such as oil

and resin, debt ratings, 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

global economic slowdown; currency fluctuations; competition with other

manufacturers and distributors of consumer products; major retailers'

strong bargaining power; 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; our ability to expeditiously close facilities and move

operations while managing foreign regulations and other impediments; our

ability to implement successfully information technology solutions

throughout our organization; our ability to improve productivity and

streamline operations; our ability to refinance short-term debt on terms

acceptable to us, particularly given the recent turmoil and uncertainty

in the global credit markets; changes to our credit ratings; significant

increases in the funding obligations related to our pension plans due to

declining asset values or otherwise; the imposition of tax liabilities

greater than our provisions for such matters; the risks inherent in our

foreign operations and those factors listed in the company’s most recent

quarterly report on Form 10-Q, and exhibit 99.1 thereto, filed with the

Securities and Exchange Commission. 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.

NWL-EA