FIRST
SECOND QUARTER 1995
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the Quarterly Period Ended March 31,June 30, 1995
---------------------------------
Commission File Number 1-9608
NEWELL CO.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3514169
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Newell Center
29 East Stephenson Street
Freeport, Illinois 61032-0943
(Address of principal executive offices)
(Zip Code)
(815)235-4171
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days.
Yes ___X___ No ______
Number of shares of Common Stock outstanding
as of April 21,July 24, 1995: 157,954,134158,199,352
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
--------------------
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31,
-------------------------Six Months Ended
June 30, June 30,
-------------------- --------------------
1995 1994 -----------1995 1994
--------- --------- ---------- Unaudited--------
(In thousands, except per share data)
Net sales $ 556,579621,331 $ 443,486493,505 $1,177,910 $ 936,991
Cost of products sold 389,764 308,686
----------- ----------431,881 333,589 821,645 642,275
-------- -------- --------- --------
GROSS INCOME 166,815 134,800189,450 159,916 356,265 294,716
Selling, general and
administrative expenses 93,420 77,043
----------- ----------88,371 74,729 181,791 151,772
-------- -------- --------- --------
OPERATING INCOME 73,395 57,757101,079 85,187 174,474 142,944
Nonoperating expenses (income):
Interest expense 11,838 5,46112,387 6,325 24,225 11,786
Other 1,392 (210)
----------- ----------(2,851) 2,222 (1,459) 2,012
-------- -------- --------- --------
Net nonoperating expenses (income) 13,230 5,251
----------- ----------9,536 8,547 22,766 13,798
-------- -------- --------- ------
INCOME BEFORE INCOME TAXES 60,165 52,50691,543 76,640 151,708 129,146
Income taxes 24,066 21,002
----------- ----------36,617 32,657 60,683 53,659
-------- -------- --------- --------
NET INCOME $ 36,09954,926 $ 31,504
=========== ==========43,983 $ 91,025 $ 75,487
======== ======== ========= ========
Earnings per share $ 0.230.35 $ 0.20
=========== ==========0.28 $ 0.58 $ 0.48
======== ======== ========= ========
Dividends per share $ 0.12 $ 0.10 $ 0.09
=========== ==========0.22 $ 0.19
======== ======== ========= ========
Weighted average shares 157,903 157,684
=========== ==========158,020 157,785 157,962 157,733
======== ======== ========= ========
See notes to consolidated financial statements.
2
-3-
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
March 31,June 30, December 31,
1995 1994
------------------------- ------------
Unaudited
(In thousands)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 10,01912,982 $ 14,892
Accounts receivable, net 313,473405,538 335,806
Inventories 465,214491,426 420,654
Deferred income taxes 84,59078,144 90,063
Prepaid expenses and other 58,50945,110 56,256
------------ --------------------- ---------
TOTAL CURRENT ASSETS 931,8051,033,200 917,671
MARKETABLE EQUITY SECURITIES 78,71046,692 64,740
OTHER LONG-TERM INVESTMENTS 185,432186,849 183,372
OTHER ASSETS 164,835152,127 182,906
PROPERTY, PLANT AND EQUIPMENT, NET 473,726479,239 454,597
GOODWILL 676,638682,308 684,990
------------ --------------------- ---------
TOTAL ASSETS $2,511,146$2,580,415 $2,488,276
============ ===================== =========
See notes to consolidated financial statements.
3
-4-
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONT.)
March 31,June 30, December 31,
1995 1994
------------ ------------------------- -------------
Unaudited
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable $ 214,997102,797 $ 209,720
Accounts payable 111,463107,024 112,269
Accrued compensation 35,14739,993 48,461
Other accrued liabilities 282,292270,269 305,878
Income taxes 37,22140,554 8,271
Current portion of long-term debt 59,728 99,425
99,425
------------ --------------------- ---------
TOTAL CURRENT LIABILITIES 780,545620,365 784,024
LONG-TERM DEBT 408,216604,489 408,986
OTHER NONCURRENT LIABILITIES 149,087149,813 152,697
DEFERRED INCOME TAXES 22,44018,198 17,243
STOCKHOLDERS' EQUITY
Par value of common stock issued: 157,951158,199 157,844
1995 - 157,951,344 Shares158,199,352 shares
1994 - 157,843,590 shares
Additional paid-in capital 176,556181,582 175,352
Retained earnings 809,170845,142 788,862
Net unrealized gain on securities
available for sale 18,25011,942 9,868
Cumulative translation adjustment (10,898)(9,143) (6,466)
Treasury stock (at cost): (171)(172) (134)
1995 - 7,9847,998 shares
1994 - 6,567 shares ------------ ------------========= =========
TOTAL STOCKHOLDERS' EQUITY 1,150,8581,187,550 1,125,326
------------ --------------------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,511,146$2,580,415 $2,488,276
============ ===================== =========
See notes to consolidated financial statements.
4
-5-
NEWELL CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
ThreeFor the Six Months Ended
March 31,
-------------------------June 30,
--------------------------
1995 1994
----------- ---------- ---------
Unaudited
(In thousands)
CASH FLOWS FROM (FOR) OPERATING ACTIVITIES:
Net Income $ 36,09991,025 $ 31,50475,487
Adjustments to Reconcile Net Income to Net
Cash Provided fromby Operating Activities:
Depreciation and amortization 23,100 23,92748,710 41,503
Deferred income taxes (5,865) 2,362(14,991) (11,812)
Net gain on marketable equity securities (15,819) (373)
Write-off of investments 16,000 -
(213)
Other 95 (180)(3,567) (1,365)
Changes in Current Accounts:current accounts, excluding the effects
of acquisitions:
Accounts receivable 22,333 3,591(65,698) (33,656)
Inventories (44,560) (12,475)(49,958) (23,520)
Other current assets, accounts payable
accrued liabilities and other (591) (14,541)
----------- ----------
NET CASH PROVIDED FROM OPERATING ACTIVITIES 30,611 33,975
----------- ----------
CASH FLOWS FROM (FOR)18,749 (19,607)
-------- --------
Net Cash Provided by Operating Activities 24,451 26,657
-------- ---------
INVESTING ACTIVITIES:
Acquisitions (41,742) -
Expenditures for property, plant and equipment (18,211) (12,177)(41,309) (26,489)
Sale of marketable equity securities - 83337,324 1,053
Disposal of noncurrent assets and other (7,293) (4,628)
----------- ----------
(25,504) (15,972)
----------- ----------
CASH FLOWS FROM (FOR)3,380 3,627
-------- --------
Net Cash Used in Investing Activities (42,347) (21,809)
-------- --------
FINANCING ACTIVITIES:
Proceeds from issuance of debt 9,691 147,81062,580 139,600
Proceeds from exercised stock options and other 1,304 1,5153,429 2,166
Payments on notes payable and long-term debt (5,184) (155,069)(15,278) (118,267)
Cash dividends (15,791) (14,191)
----------- ----------
(9,980) (19,935)
----------- ----------
DECREASE IN CASH AND CASH EQUIVALENTS (4,873) (1,932)(34,745) (29,968)
-------- --------
Net Cash Provided by (Used in) Financing Activities 15,986 (6,469)
-------- --------
Decrease in Cash and Cash Equivalents (1,910) (1,621)
Cash and cash equivalents at beginning of year 14,892 2,866
----------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD-------- --------
Cash and Cash Equivalents at End of Period $ 10,01912,982 $ 934
=========== ==========1,245
======== ========
See notes to consolidated financial statements. 5
-6-
NEWELL CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - The condensed financial statements included herein have been
prepared by the Company, without audit, pursuant to the
rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments necessary to present
a fair statement of the results for the periods reported,
subject to normal recurring year-end audit adjustments, none
of which is material. Certain information and footnote
disclosures normally included in financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that
the disclosures are adequate to make the information
presented not misleading. It is suggested that these
condensed financial statements be read in conjunction with
the financial statements and the notes thereto included in
the Company's latest Annual Report on Form 10-K.
Note 2 - On August 29, 1994, the Company acquired Home Fashions, Inc.
("HFI"), a manufacturer and marketer of decorative window
coverings, including vertical blinds and pleated shades.
The purchase price was $130.4 million in a cash. HFI was
combined with Levolor and together they are operated as a
single entity called Levolor Home Fashions. On October 18,
1994, the Company acquired Faber-Castell Corporation, which
is a leading maker and marketer of markers and writing
instruments, including wood-cased pencils and rolling ball
pens, whose products are marketed under the Eberhard Faber
brand name ("Eberhard Faber"). The purchase price was
$137.3 million in cash. Eberhard Faber was combined with
Sanford and together they are operated as a single entity
called Sanford. On November 30, 1994, the Company acquired
the European consumer products business of Corning
Incorporated ("Newell Europe"). This acquisition included
Corning'sCorning s consumer products manufacturing facilities in
England, France and Germany, the European trademark rights
and product lines for Pyrex, Pyroflam and Visions brands in
Europe, the Middle East and Africa, and Corning'sCorning s consumer
distribution network throughout these areas (Pyrex and
Visions are registered trademarks of Corning Incorporated).
Additionally, the Company became the distributor in Europe,
the Middle East and Africa for Corning'sCorning s U.S.-manufactured
cookware and dinnerware brands. The purchase price was
$86.9$87.7 million in cash. These transactions were accounted
for as purchases; therefore, the results of operations for
HFI, Eberhard Faber and Newell Europe are included in the
accompanying consolidated financial statements since their
respective dates of acquisition. The cost of the 1994
acquisitions was allocated on a preliminary basis to the
fair market value of assets acquired and liabilities assumed
and resulted in goodwill of approximately $156.6$159.2 million.
6
-7-
The unaudited consolidated results of operations for the threesix
months ended March 31,June 30, 1995 and 1994 on a pro forma basis, as
though HFI, Eberhard Faber and Newell Europe each had been
acquired on January 1, 1994 are as follows:
1995 1994
------ -------------- --------
(In millions, except per share data)
Net sales $556.6 $545.8$1,211.3 $1,203.3
Net income 36.1 29.389.4 73.0
Earnings per share 0.23 0.190.57 0.46
Note 3 - Cash paid during the first threesix months for income taxes and
interest was as follows:
ThreeSix Months Ended
March 31,June 30,
--------------------------
1995 1994
------ -------------- --------
(In millions)
Income taxes $ 2.137.0 $ 4.853.4
Interest 13.7 8.825.5 13.9
Note 4- The components of inventories at the end of each period, net
of the LIFO reserve, were as follows:
March 31,June 30, December 31,
1995 1994
------ ------------------ -----------
(In millions)
Materials and supplies $ 97.3$118.4 $ 81.7
Work in process 98.677.2 98.9
Finished products 269.3295.8 240.1
------ ------
$465.2----- -----
$491.4 $420.7
====== =========== =====
Note 5 - Long-term marketable equity securities at the end of each
period are summarized as follows:
March 31,June 30, December 31,
1995 1994
------ ------------------ -----------
(In millions)
Aggregate market value $ 78.746.7 $ 64.7
Aggregate cost 26.8 48.3
48.3
------ ----------- -----
Unrealized gain, net $ 30.419.9 $ 16.4
====== ===== 7=====
During the six months ended June 30, 1995, the Company
obtained proceeds of $37.3 million from the sale of long-
-8-
term marketable equity securities and recorded a gain of
$15.8 million on the sale.
Note 6 - Property, plant and equipment at the end of each period
consisted of the following:
March 31,June 30, December 31,
1995 1994
-------- ------------------- ------------
(In millions)
Land $ 12.212.4 $ 9.6
Buildings and improvements 168.8168.6 164.8
Machinery and equipment 536.6541.5 515.8
-------- --------
717.6------ ------
722.5 690.2
Allowance for depreciation (243.9)(243.3) (235.6)
-------- -------------- ------
$ 473.7479.2 $ 454.6
======== ============== ======
Note 7 - Notes Payable at the end of each period consisted of the
following:
March 31,June 30, December 31,
1995 1994
-------- ------------------- ------------
(In millions)
Commercial paper(short-term) $ 120.0- $ 117.1
Other notes payable 95.0102.8 92.6
------- -------
$ 215.0102.8 $ 209.7
======== ============== ======
Note 8 - Long-term debt at the end of each period consisted of the
following:
March 31,June 30, December 31,
1995 1994
-------- ------------------- ------------
(In millions)
Medium-term notes $ 186.0198.0 $ 186.0
Commercial paper 300.0445.0 300.0
Other long-term debt 21.621.2 22.4
-------- --------
507.6664.2 508.4
Current portion (59.7) (99.4)
(99.4)
-------- --------
$ 408.2604.5 $ 409.0
======== ============== ======
Commercial paper in the amount of $300.0 million is classified as long-term since it is
supported by the revolving credit agreement discussed in
the liquidity and capital resources section on page 11.
814.
-9-
PART I. Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
---------------------------------------------
Results of Operations
The following table sets forth for the periods indicated the items
from the Consolidated Statements of Income as a percentage of net
sales.
Three Months Ended March 31,Six Months Ended
June 30, June 30,
-------------------- --------------------
1995 1994 -------- --------1995 1994
--------- --------- --------- ---------
Net sales 100.0% 100.0% 100.0% 100.0%
Cost of products sold 70.0 69.6
-------- --------69.5 67.6 69.8 68.5
----- ----- ----- -----
GROSS INCOME 30.0 30.430.5 32.4 30.2 31.5
Selling, general and
administrative expenses 16.8 17.4
-------- --------14.2 15.1 15.4 16.2
----- ----- ----- -----
OPERATING INCOME 13.2 13.016.3 17.3 14.8 15.3
Nonoperating expenses (income):
Interest expense 2.1 1.22.0 1.3 2.0 1.3
Other 0.3
-------- --------(0.4 0.5 (0.1) 0.2
----- ----- ----- -----
Net nonoperating expenses (income) 2.4 1.2
-------- --------1.6 1.8 1.9 1.5
----- ----- ----- -----
INCOME BEFORE INCOME TAXES 10.8 11.814.7 15.5 12.9 13.8
Income taxes 4.3 4.7
-------- --------5.9 6.6 5.2 5.7
----- ----- ----- -----
NET INCOME 6.5% 7.1%
======== ========8.8% 8.9% 7.7% 8.1%
===== ===== ===== =====
9
-10-
Three Months Ended March 31,June 30, 1995 vs. Three Months Ended March 31,June 30, 1994
----------------------------------------------------------------------------------------------------------
Net sales for the firstsecond quarter of 1995 were $556.6$621.3 million,
representing an increase of $113.1$127.8 million or 25.5%25.9% from $443.5$493.5
million in the comparable quarter of 1994. Net sales for each of the
Company's product groups were as follows, in millions:
1995 1994 $ Change % Change
------ -------------- -------- -------- --------
Housewares $175.9 $145.5$192.3 $156.0 $ 30.4 20.9%36.3 23.3%
Home Furnishings 165.9 144.5 21.4 14.8%168.9 142.1 26.8 18.9%
Office Products 129.6 69.1 60.5 87.6%165.7 98.9 66.8 67.5%
Hardware 85.2 84.4 0.8 0.9%
------ ------ --------
$556.6 $443.5 $113.1 25.5%
====== ====== ======== ========94.4 96.5 (2.1) (2.2)%
----- ----- -----
$621.3 $493.5 $127.8 25.9%
===== ===== =====
The overall increase in net sales was primarily attributable to sales
growth of 4%2% from businesses owned more than two years, including
immaterial acquisitions in 1995 of related businesses (core
businesses), and the 1994 acquisitions of HFI, Eberhard Faber and
Newell Europe. The increase in Housewares sales was due primarily to
the Newell Europe acquisition. Theacquisition; the increase in Home Furnishings was
due primarily to the HFI acquisition. Theacquisition; the increase in Office Products
was due to the Eberhard Faber acquisition and 26%10% sales growth from
core businesses.businesses; and the decrease in Hardware was due to sluggish
retail sales in the home center channel of trade. The 2% overall
sales growth from core businesses was lower than expected due to a
sluggish retail environment.
Gross income as a percent of net sales in the firstsecond quarter of 1995
decreased slightly to 30.0%30.5% from 30.4%32.4% in the comparable quarter of 1994. The
decrease was due primarily to low gross margins from the businesses
acquired in 1994, offset by improvements in gross margins
in the Housewares and Office Products core businesses.1994.
Selling, general and administrative expenses ("SG&A") as a percent of
net sales in the firstsecond quarter of 1995 were 16.8%14.2% versus 17.4%15.1% in the
comparable quarter of 1994. The decrease was due primarily to a
reduction in SG&A at Goody and Lee/Rowan, a low level of SG&A at
Eberhard Faber.Faber and no increases in spending by the core businesses as
the result of cost controls.
Operating income in the firstsecond quarter of 1995 was 13.2%16.3% of net sales
or $73.4$101.1 million versus $57.8$85.2 million in the comparable quarter of
1994. The increase was primarily attributable to sales growth and improved
profitability at the core businesses and contributions from
the 1993 and 1994 acquisitions.
Net nonoperating expenses for 1995 were $13.2$9.5 million in the firstsecond
quarter of 1995 versus $5.3$8.5 million in the comparable quarter of 1994.
The increase was primarily due to a $13.8 million charge resulting
from the write-down in carrying value of a long-term foreign
-11-
investment accounted for under the equity method. During the current
quarter, the Company initiated a plan to dispose of the foreign
investment and has recorded it at the net realizable value. Also
contributing to the increase in nonoperating expenses was additional
interest expense of $6.4
million and incremental goodwill amortization of $1.2$6.1 million resulting from the financing of the
1994 acquisitions and a $2.2
million write-off$1.5 payment received in 1994 from the
settlement of intangible assets. This increase wasa lawsuit. These increases were partially offset by a
$1.9$15.8 million increasegain recognized on the sale of a long-term marketable
equity security, and a $5.0 million charge in equity earnings from American
10
Tool Companies, Inc.,1994 incurred in
whichconnection with a plea agreement by a subsidiary of the company has a 47% ownership
interest.Company with
the U.S. government.
For the firstsecond quarter, the effective tax rate was 40.0% in both 1995 and
42.6% in 1994. The effective tax rate would have been 40.0% in 1994,
without giving effect to the $5.0 million charge discussed above.
Net income for the firstsecond quarter of 1995 was $36.1$54.9 million,
representing an increase of $4.6$10.9 million or 14.6%24.9% from the comparable
quarter of 1994. Earnings per share for the firstsecond quarter of 1995
were up 15.0%25.0% to $0.23$0.35 versus $0.20$0.28 in the comparable quarter of
1994. The increases in net income and earnings per share were
primarily attributable to contributions from the 1994 acquisitions
(net of interest expense) and the absence of the $5.0 million plea
agreement in 1995.
-12-
Six Months Ended June 30, 1995 vs. Six Months Ended June 30, 1994
-----------------------------------------------------------------
Net sales for the first six months of 1995 were $1,177.9 million,
representing an increase of $240.9 million or 25.7% from $937.0
million in the comparable period of 1994. Net sales for each of the
Company's product groups were as follows, in millions:
1995 1994 $ Change % Change
-------- -------- -------- --------
Housewares $ 368.2 $301.5 $ 66.7 22.1%
Home Furnishings 334.8 286.6 48.2 16.8%
Office Products 295.3 168.0 127.3 75.8%
Hardware 179.6 180.9 (1.3) (0.7)%
------- ----- -----
$1,177.9 $937.0 $240.9 25.7%
======= ===== =====
The overall increase in net sales was primarily attributable to sales
growth of 3% from businesses owned more than two years, including
immaterial acquisitions in 1995 of related businesses (core
businesses), and the 1994 acquisitions of HFI, Eberhard Faber and
Newell Europe. The increase in Housewares sales was due primarily to
the Newell Europe acquisition; the increase in Home Furnishings was
due primarily to the HFI acquisition; the increase in Office Products
was due to the Eberhard Faber acquisition and 17% sales growth from
core businesses; and the decrease in Hardware was due to sluggish
retail sales in the home center channel of trade. The 3% overall
sales growth from core businesses was lower than expected due to a
sluggish retail environment.
Gross income as a percent of net sales for the first six months of
1995 decreased to 30.2% from 31.5% in the comparable period of 1994.
The decrease was due primarily to low gross margins from the
businesses acquired in 1994.
Selling, general and administrative expenses as a percent of net sales
for the first six months of 1995 were 15.4% versus 16.2% in the
comparable period of 1994. The decrease was due primarily to a
reduction in SG&A at Goody and Lee/Rowan, a low level of SG&A at
Eberhard Faber and no increases in spending by the core businesses as
the result of cost controls.
Operating income for the first six months of 1995 was 14.8% of net
sales or $174.5 million versus $142.9 million in the comparable
period of 1994. The increase was attributable to improved
profitability at the core businesses.businesses and contributions from the 1993
and 1994 acquisitions.
Net nonoperating expenses for 1995 were $22.8 million for the first
six months of 1995 versus $13.8 million in the comparable period of
1994. The increase was primarily due to $16.0 million in write-downs
of the long-term foreign investment discussed previously on page 10,
-13-
and other intangibles. Also contributing to the increase in
nonoperating expenses were additional interest expense of $12.4
million and incremental goodwill amortization of $2.0 million
resulting from the 1994 acquisitions. These increases were partially
offset by a $2.2 million increase in equity earnings from American
Tool Companies, Inc., in which the Company has a 47% ownership
interest, as well as the $15.8 million long-term marketable equity
security gain, the $5.0 million plea agreement and the $1.5 million
lawsuit settlement also discussed on page 10.
For the first six months, the effective tax rate was 40.0% in 1995 and
41.5% in 1994. The effective tax rate would have been 40.0% in 1994,
without giving effect to the $5.0 million charge discussed above.
Net income for the first six months of 1995 was $91.0 million,
representing an increase of $15.5 million or 20.6% from the comparable
period of 1994. Earnings per share for the first six months of 1995
were up 20.8% to $0.58 versus $0.48 in the comparable period of 1994.
The increases in net income and earnings per share were attributable
to improved profitability at the core businesses, contributions from
the 1993 and 1994 acquisitions and the absence of the $5.0 million
plea agreement in 1995. -14-
Liquidity and Capital Resources
-------------------------------
The Company'sCompany s primary sources of liquidity and capital resources
include cash provided from operations and use of available borrowing
facilities.
Operating activities provided net cash equal to $30.6$24.5 million during
the first threesix months of 1995 versus $34.0$26.7 million in the comparable
period of 1994.
The Company has foreign and domestic lines of credit with various
banks and a commercial paper program which are available for short-
term financing. Under the line of credit arrangements, the Company
may borrow up to $351.5$351.9 million (of which $255.5$248.5 million was available
at March 31,June 30, 1995) based upon such terms as the Company and the
respective banks have mutually agreed upon.
The Company has a shelf registration statement covering up to $500.0
million of debt securities, of which $257.0$147.0 million was available for
additional borrowings as of March 31,June 30, 1995. Pursuant to the shelf
registration, at March 31,June 30, 1995 the Company had outstanding $186.0$198.0
million (principal amount) of medium-term notes with maturities
ranging from one to fiveten years at an average rate of interest equal to
6.6%.
TheIn June 1995, the Company entered into a three-year $300.0five-year $550.0 million
revolving credit agreement in August 1993, and a $100.0$200.0 million, 364-day revolving
credit agreement in each of November 1993 and August 1994. The
November 1993 364-day(and terminated its prior existing revolving credit
agreement was renewed for an
additional 364 days.agreements). Under these agreements, the Company may borrow, repay
and reborrow funds in an aggregate amount up to $500.0$750.0 million, at a
floating interest rate. At March 31,June 30, 1995, there were no borrowings
under the revolving credit agreements.
In lieu of borrowings under the revolving credit agreements, the
Company may issue up to $500.0$750.0 million of commercial paper. The
Company'sCompany s revolving credit agreements referred to above provide the
committed backup liquidity required to issue commercial paper.
Accordingly, commercial paper may only be issued up to the amount
available under the Company'sCompany s revolving credit agreements. At March
11
31,June
30, 1995, $420.0$445.0 million (face or principal amount) of commercial
paper was outstanding, all of which was supported by the revolving
credit agreements. The short-term portion of this balance was $120.0
million, which is classified as notes payable. The remaining $300.0
millionentire amount is classified as long-term debt
under the three-yearfive-year revolving credit agreement.
The Company'sCompany s primary uses of liquidity and capital resources include
capital expenditures, dividend payments and acquisitions.
Capital expenditures were $18.2$41.3 and $12.1$26.5 million in the first threesix
months of 1995 and 1994, respectively.
The Company has paid regular cash dividends on its common stock since
1947. On May 13, 1993,11, 1995, the quarterly cash dividend was increased to
$0.09$0.12 per share from the $0.08$0.10 per share that had been paid since February 15, 1991. The quarterly dividend was again increased to
$0.10 per share on May
12, -15-
24, 1994. Dividends paid in the first threesix months of 1995 and 1994
were $15.8$34.7 and $14.2$30.0 million, respectively.
Working capital at March 31,June 30, 1995, was $151.3$412.8 million compared to
$133.6 million at December 31, 1994. This change was due primarily to
the classification of all commercial paper as long-term in connection
with the new five-year revolving credit agreement and a substantial
increase in receivables (resulting from the 1994 acquisitions as well
as the peak selling season in Office Products) and inventories
(resulting from the 1994 acquisitions as well as a sluggish first-half
retail environment). The current ratio at March 31,June 30, 1995 was 1.19:1.67:1
compared to 1.17:1 at December 31, 1994. The total debt to total
capitalization was .39:1 at both March 31,June 30, 1995 and December 31, 1994.
The Company believes that cash provided from operations and available
borrowing facilities will continue to provide adequate support for the
cash needs of existing businesses; however, certain events, such as
significant acquisitions, could require additional external financing.
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits:
3.1 Restated Certificate of Incorporation of Newell Co., as
amended as of May 10, 1995
3.2 By-laws of Newell Co., as amended through February 6,
1995
10.1 364-Day Credit Agreement dated as of June 12, 1995
among the Company, certain of its affiliates, The Chase
Manhattan Bank (National Association), as Agent, and
the banks whose names appear on the signature pages
thereto.
10.2 Five Year Credit Agreement dated as of June 12, 1995
among the Company, certain of its affiliates, The Chase
Manhattan Bank (National Association), as Agent, and
the banks whose names appear on the signature pages
thereto.
27 Financial Data Schedule
b) Reports on Form 8-K: (1) Registrant filed a Report on Form 8-K dated
January 30, 1995 reporting the issuance of
a press release regarding the results for the
quarter and fiscal year ended December 31, 1994.
13None
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SIGNATURES
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 thereunto duly authorized.
NEWELL CO.
Date May 7,August 4, 1995 /s/ William T. Alldredge
------------------------------------- ---------------------------------
William T. Alldredge
Vice President - Finance
Date May 7,August 4, 1995 /s/ Brett E. Gries
------------------------------------- ---------------------------------
Brett E. Gries
Vice President - Accounting & Tax
14