FWP
Free Writing Prospectus
Filed Pursuant to Rule 433
Registration Statement No.:
333-149887
Newell
Rubbermaid Announces $250 Million Convertible Note
Offering
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Reduces quarterly dividend to $.05; reaffirms Q1 normalized EPS
guidance
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Takes actions to retain financial flexibility, protect
investment grade credit rating and
maintain consumer-driven innovation and brand-building
investments
ATLANTA, March 24, 2009 Newell
Rubbermaid (NYSE: NWL) today announced that it intends to offer,
subject to market and other conditions, $250 million
aggregate principal amount of convertible senior notes due 2014
in a registered underwritten public offering. Newell Rubbermaid
intends to grant the underwriters an option to purchase up to an
additional $37.5 million aggregate principal amount of such
convertible notes to cover over-allotments, if any.
In addition, the company has retained Banc of America Securities
LLC and J.P. Morgan Securities Inc. to arrange a
replacement
364-day
trade receivables financing facility in an initially proposed
maximum amount of up to $250 million, coincident with the
expiration of the companys existing $450 million
receivables facility. Consummation of a new receivables facility
is subject to customary closing conditions, the satisfactory
completion of due diligence and final commitment by the facility
providers.
The convertible note offering and the receivables facility are
intended to permit the repayment of a portion of the
approximately $750 million in debt that matures in the
second half of 2009. Newell Rubbermaid plans to address its
remaining debt obligations through the capital markets or other
arrangements. The company reported cash on hand of
$275 million as of December 31, 2008, anticipates
operating cash flow of more than $400 million in 2009 and
has additional funds available under its $690 million
revolver agreement. Newell Rubbermaid believes the receivables
financing facility and the convertible notes offering will
improve financial flexibility and, combined with cash on hand
and the revolver agreement, will enable the company to meet all
near-term obligations and weather the current economic
recession, while continuing to invest in consumer-driven
innovation and brand building to drive long-term growth and
create shareholder value.
Dividend
Reduction
In connection with todays announcement, Newell
Rubbermaids Board of Directors also authorized a reduction
in the quarterly common stock dividend to $0.05 per share from
$0.105 per share. Although the company recognizes the importance
of the dividend to shareholders, it believes that the reduced
payout level demonstrates a strong commitment to maintaining its
current investment grade rating while still providing a
competitive and appropriate dividend yield.
Financial
Outlook
The company reaffirmed its guidance for normalized EPS of
$0.07-$0.12 for the first quarter of 2009, although its business
continues to be adversely impacted by the global economic
slowdown. The company now expects that first quarter sales will
show a year over year percentage decline in the mid to high
teens compared with the companys previous guidance of a
decline in the low to mid teens. Lower input costs and
disciplined cost management are expected to offset the
anticipated first quarter sales softness. The company also
stated that it anticipates its first quarter operating cash
usage will be approximately half of last years
$123 million first quarter cash flow use.
Normalized earnings per share is a non-GAAP financial measure
within the meaning of the SECs Regulation G. Included
below is a reconciliation of this non-GAAP financial measure to
the most directly comparable financial measure calculated in
accordance with GAAP.
Convertible
Senior Notes
In connection with the offering of the $250 million
aggregate principal amount of its convertible senior notes due
2014, Newell Rubbermaid also expects to enter into convertible
note hedge transactions with counterparties that are affiliates
of the representatives of the underwriters of the notes. The
convertible note hedge transactions are expected to reduce the
potential dilution to Newell Rubbermaids common stock upon
conversion of the notes. Newell Rubbermaid also expects to enter
into warrant transactions with the counterparties. However, the
warrant transactions could separately have a dilutive effect to
the extent that the market value per share of Newell
Rubbermaids common stock exceeds the applicable strike
price of the warrants.
In connection with establishing their initial hedge of the
convertible note hedge and warrant transactions, the
counterparties or their respective affiliates expect to enter
into various derivative transactions with respect to Newell
Rubbermaids common stock concurrently with or shortly
after the pricing of the notes. This activity could increase or
avoid a decrease in the market price of Newell Rubbermaids
common stock or the notes at that time.
In addition, the counterparties
and/or their
respective affiliates may modify their hedge positions by
entering into or unwinding various derivative transactions with
respect to Newell Rubbermaids common stock
and/or by
selling or purchasing Newell Rubbermaids common stock in
secondary market transactions following the pricing of the notes
and prior to the maturity of the notes (and are likely to do so
during any observation period related to a conversion of the
notes). This activity could also cause or avoid an increase or a
decrease in the market price of Newell Rubbermaids common
stock, which could affect noteholders ability to convert
the notes and, to the extent the activity occurs during any
observation period related to a conversion of notes, it could
affect the number of shares and value of the consideration that
noteholders will receive upon conversion of the notes.
Newell Rubbermaid estimates that the proceeds from this offering
will be approximately $243.1 million ($279.6 million
if the underwriters exercise their option to purchase additional
notes in full), after deducting fees and before estimated
expenses. Newell Rubbermaid expects to use (i) a portion of
the net proceeds for the cost of the convertible note hedge
transactions after such cost is offset by the proceeds of the
warrant transactions and (ii) the remaining proceeds for
general corporate purposes, including repayment of 2009 debt
maturities. If the option granted to the underwriters to
purchase additional notes is exercised, Newell
Rubbermaid will use a portion of the net proceeds from the sale
of additional notes to increase the size of the convertible note
hedge transactions. Newell Rubbermaid will also sell additional
warrants, which would result in additional proceeds to it.
Newell Rubbermaid expects to use the remaining proceeds,
together with the proceeds from the sale of additional warrants,
for general corporate purposes.
Merrill Lynch & Co. and J.P. Morgan Securities
Inc. will act as the joint book-running managers of the offering
and Friedman, Billings, Ramsey & Co., Inc. will act as
co-manager of the offering.
About
Newell Rubbermaid
Newell Rubbermaid Inc., an S&P 500 company, is a
global marketer of consumer and commercial products with sales
of over $6 billion and a strong portfolio of brands,
including
Sharpie®,
Paper
Mate®,
Dymo®,
Expo®,
Waterman®,
Parker®,
Rolodex®,
Irwin®,
Lenox®,
BernzOmatic®,
Rubbermaid®,
TC®,
Levolor®,
Graco®,
Aprica®,
Calphalon®
and
Goody®.
This press release and additional information about Newell
Rubbermaid are available on the companys Web site,
www.newellrubbermaid.com.
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Contacts:
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Nancy ODonnell
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David Doolittle
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VP, Investor Relations
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VP, Corporate Communications
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(770)
418-7723
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(770) 418-7519
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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 may relate to, but are not limited
to, information or assumptions about the effects of sales
(including pricing), income/(loss), earnings per share,
operating income or gross margin improvements or declines,
Project Acceleration, capital and other expenditures, working
capital, cash flow, dividends, capital structure, debt to
capitalization ratios, availability of financing, interest
rates, restructuring, impairment and other charges, potential
losses on divestitures, impact of changes in accounting
standards, pending legal proceedings and claims (including
environmental matters), future economic performance, costs and
cost savings (including raw material and sourced product
inflation, productivity and streamlining), synergies,
managements plans, goals and objectives for future
operations, performance and growth or the assumptions relating
to any of the forward-looking statements. These statements
generally are accompanied by words such as intend,
anticipate, expect, project,
will, believe, estimate,
target, plan, should,
would and similar statements. Company management
cautions that forward-looking statements are not guarantees
because there are inherent difficulties in predicting future
results. 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, the companys
dependence on the strength of retail economies 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 the
companys ability to obtain raw materials and sourced
products in a timely manner from suppliers; its ability to
develop innovative new products and to develop, maintain and
strengthen its end-user brands; its ability to expeditiously
close facilities and move operations while managing foreign
regulations and other impediments;
its ability to manage successfully risks associated with
divesting or discontinuing businesses and product lines; its
ability to implement successfully information technology
solutions throughout the organization; its ability to improve
productivity and streamline operations; its ability to refinance
short term debt on terms acceptable to the company, particularly
given the recent turmoil and uncertainty in the global credit
markets; changes to the companys credit ratings; increases
in the funding obligations related to its pension plans due to
declining asset values or otherwise; the imposition of tax
liabilities greater than the companys provisions for such
matters; the risks inherent in the companys foreign
operations and those factors listed in the companys most
recent annual report on
Form 10-K
filed with the Securities and Exchange Commission. In addition,
there can be no assurance that management has correctly
identified and assessed all of the factors affecting the company
or that the publicly available and other information it receives
with respect to these factors is complete or correct. 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.
Newell Rubbermaid has filed a registration statement
(including a prospectus and a related preliminary prospectus
supplement) with the U.S. Securities and Exchange
Commission (SEC) for the offering to which this communication
relates. Before you invest, you should read the prospectus
supplement and prospectus in that registration statement and
other documents Newell Rubbermaid has filed with the SEC for
more complete information about Newell Rubbermaid and this
offering. You may get these documents for free by visiting EDGAR
on the SECs website at
http://www.sec.gov.
Alternatively, copies may be obtained from Merrill
Lynch & Co., Attn: Prospectus Department, 4 World
Financial Center, New York, NY 10080,
(866) 500-5408
or J.P. Morgan Securities Inc., National Statement
Processing, Prospectus Library, 4 Chase Metrotech Center, CS
Level, Brooklyn, NY 11245,
(718) 242-8002.
First
Quarter 2009 Normalized Earnings Per Share
A reconciliation of the first quarter earnings outlook is as
follows:
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Q1 2009
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Diluted earnings per share from continuing operations:
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$(0.01) to $0.04
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Project Acceleration restructuring costs
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$0.06 to $0.10
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Normalized earnings per share
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$0.07 to $0.12
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The company has used certain financial measures that are
included in this release both in presenting its results to
stockholders and the investment community and in its internal
evaluation and management of its businesses. The companys
management believes that these measures including
the non-GAAP financial measure and the
information they provide are useful to investors since these
measures:
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enable investors and analysts to compare the current non-GAAP
measure with the corresponding non-GAAP measure used in the
past, and
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permit investors to view the companys performance using
the same tools that company management uses to evaluate the
companys past performance and prospects for future
performance and to gauge the companys progress in
achieving its stated goals.
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Management believes that normalized earnings per share is also
useful because it provides investors with a meaningful
perspective on the current underlying performance of the
companys continuing operations and because it helps
determine the amount, if any, of cash bonuses for corporate
management employees under the companys management cash
bonus plan. While management believes that this non-GAAP
financial measure is useful in evaluating the company, 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, this
non-GAAP financial measure may differ from similar measures
presented by other companies.
NWL-EA