Graco 2009 Annual Report Download - page 27

Newell Rubbermaid Inc. 2009 Annual Report
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2008 vs. 2007 Business Segment Operating Results
Net sales by segment were as follows for the year ended December 31, (in millions, except percentages):
2008 2007 % Change
Home & Family $ 2,654.8 $ 2,610.8 1.7%
Office Products 1,990.8 2,026.2 (1.7)
Tools, Hardware & Commercial Products 1,825.0 1,770.3 3.1
Total Net Sales $ 6,470.6 $ 6,407.3 1.0%
Operating income (loss) by segment was as follows for the year ended December 31, (in millions, except percentages):
2008 2007 % Change
Home & Family $ 218.3 $ 307.5 (29.0)%
Office Products 212.4 315.8 (32.7)
Tools, Hardware & Commercial Products 271.7 285.0 (4.7)
Corporate (81.9) (82.0) 0.1
Impairment charges (299.4) — NMF
Restructuring costs (120.3) (86.0) (39.9)
Total Operating Income $ 200.8 $ 740.3 (72.9)%
NMF-Not meaningful
Home & Family
Net sales for 2008 were $2,654.8 million, an increase of $44.0 million, or 1.7%, from $2,610.8 million in 2007. Core sales declined 0.8% as mid-single-digit
core sales growth in the Baby & Parenting Essentials GBU was offset by softness in the Décor GBU. The Aprica acquisition increased sales $95.5 million, or
3.7%, while favorable foreign currency contributed an additional 0.2% to the overall sales improvement. The adverse impact from product line exits reduced
sales 1.4%.
Operating income for 2008 was $218.3 million, or 8.2% of net sales, a decrease of $89.2 million from $307.5 million, or 11.8% of net sales, in 2007.
The 360 basis point decline was primarily driven by unfavorable mix and by sourced product and input cost inflation, particularly in resin, which combined
contributed an estimated 590 basis points to the decline. These declines were partially offset by benefits realized from tighter management of SG&A costs.
Office Products
Net sales for 2008 were $1,990.8 million, a decrease of $35.4 million, or 1.7%, from $2,026.2 million in 2007. Core sales declined 3.2%, due to lower consumer
demand and customer inventory management. Favorable foreign currency increased sales 1.5%.
Operating income for 2008 was $212.4 million, or 10.7% of net sales, a decrease of $103.4 million, from $315.8 million, or 15.6% of net sales, in 2007.
The 490 basis point decline was primarily attributable to input cost inflation, unfavorable mix and reduced production volumes at the Company’s manufacturing
facilities, which combined contributed an estimated 330 basis points to the overall decline. The remaining decline was primarily driven by an increase in SG&A
spending as a percentage of sales, partially offset by benefits from pricing initiatives implemented during 2008.
Tools, Hardware & Commercial Products
Net sales for 2008 were $1,825.0 million, an increase of $54.7 million, or 3.1%, from $1,770.3 million in 2007. Core sales declined 3.9% as mid-single-digit
core sales growth in the Rubbermaid Commercial Products GBU was more than offset by declines in core sales in the Company’s Industrial Products & Services
and Construction Tools & Accessories GBUs due to continued declines in the residential construction market, customer inventory management and increased
softness in industrial and commercial channels. The Technical Concepts acquisition increased net sales $109.2 million, or 6.2%, while favorable foreign currency
increased sales 0.8%.
Operating income for 2008 was $271.7 million, or 14.9% of net sales, a decrease of $13.3 million from $285.0 million, or 16.1% of net sales, in 2007.
The 120 basis point decline is attributable to input cost inflation and unfavorable mix, which combined contributed approximately 420 basis points to the
overall decline, partially offset by contributions from SG&A expense reduction initiatives, favorable pricing and productivity improvements.