ITEM 1. BUSINESS - ----------------- GENERAL ------- Registrant was incorporated under the laws of the State of Ohio in 1920. Registrant and its subsidiaries operate in one industry segment which consists of the manufacture and distribution of plastic and rubber products consumed primarily by the end-user in the consumer, commercial, industrial, agricultural, office, marine, automotive accessories, contract, and children's markets. They include such items as housewares, home horticulture products, decorative coverings, leisure and recreational products, infants and children's toys and furniture, office, and industrial products, and products used in food service, health care, and sanitary maintenance. Registrant's products are distributed through its sales personnel and manufacturers' agents to a variety of retailers, including mass merchandisers and wholesalers, and distributors serving institutional markets.
Registrant's basic philosophy since its beginning has been to offer products of high quality and value to the user. The corporate objective, since the late-1970's, has been, and continues to be, to increase sales, earnings, and earnings per share 15% per year, compounded annually. This growth is expected to come from a combination of maximizing core businesses through product line and market extensions, new product introductions, global expansion of the business, and selective acquisitions.
Registrant's primary focus is to achieve its earnings and earnings per share growth objective of 15%, compounded annually. Since its inception, the sales growth objective has been based on certain fundamental assumptions: first, an increase of 3-5% in U. S. Gross Domestic Product; second, inflation of 2-4% in Registrant's pricing; and, finally, unit volume growth averaging around 11%. Since Gross Domestic Product increases have been below this assumption and Registrant's pricing has been essentially flat for the past several years, sales growth has been less than the 15% targeted increase. Registrant has been successful, however, in implementing cost reductions and productivity improvement programs to leverage the sales growth towards the earnings goals.
Among the businesses acquired by the Registrant are The Little Tikes Company (1984); Gott Corporation (1985); Seco Industries, Inc. (1986); MicroComputer Accessories, Inc. (1986); Viking Brush Limited (1987); EWU (AG) (1990); Eldon Industries, Inc. (1990); CIPSA (1992); and Iron Mountain Forge Corporation (1992).
CIPSA, the leading plastic housewares manufacturer and marketer in Mexico now operates as Rubbermaid de Mexico and is a part of the Home Products Division.
Iron Mountain Forge Corporation, which now reports to The Little Tikes Company, is a leading manufacturer and marketer of commercial playground equipment. Registrant expects that the synergy with Little Tikes will increase Iron Mountain Forge's strengths in the parks, schools and recreational areas and accelerate the development of the attractive growing child care market.
The companies acquired by Registrant all shared many common characteristics with Registrant including a high-quality image, emphasis on new product development and customer service, similar materials and/or manufacturing processes, and similar distribution channels.
Additional expansion has come from new operations formed from existing businesses to focus on specific segments of their markets.
Rubbermaid Specialty Products Inc. was formed in 1988 to consolidate seasonal products with similar channels of distribution into one operation. The resin casual furniture product line was transferred from the Home Products Division to be integrated with home horticulture products, planters, and bird feeders. The GOTT line of insulated products and BLUE ICE refreezable ice substitute were also integrated into this business and rebranded with the Rubbermaid name. This creates the opportunity to utilize seasonal product synergies which, coupled with the Rubbermaid brand, increase critical marketing mass at the trade level. To further increase critical mass, Rubbermaid-Allibert was realigned in 1991 to report to this business.
In December 1992, the Rubbermaid-Allibert resin furniture joint venture was dissolved and changed to a strategic alliance with Sommer-Allibert Inc. for interchange of technology, product development and sourcing. Rubbermaid will focus exclusively on the mass market and Allibert on the specialty furniture and contract channels. Rubbermaid Specialty Products retained the Stanley, North Carolina manufacturing facility.
During 1988 Registrant established an Office Products Division which combined the activities of home office products from the Home Products Division, commercial office products from Rubbermaid Commercial Products Inc. and MicroComputer Accessories, Inc. The Division enhanced service for traditional customers while capitalizing on the emerging distribution trends in the industry with concentrated marketing and distribution and a complete and diversified line of products. Early in 1991, the Office Products Division and Eldon Industries, Inc., were combined to form Rubbermaid Office Products Inc. to capitalize on their many synergies and to improve support and service to customers.
To better serve certain foreign markets, Registrant and the Dutch chemical conglomerate DSM formed a joint venture in 1990 to manufacture and market plastic and rubber housewares for Europe, the Middle East, and North Africa. The venture, known as Curver Rubbermaid Group, includes Rubbermaid's former European facilities in Germany, France, Austria, The Netherlands, and Switzerland. DSM contributed its Curver Housewares Group which included its subsidiaries - Curver U.K., Curver Netherlands, Lawn Comfort-France and Belgium, Curver France, Rodex-Spain, Curver Italy, Curver Belgium, and Curver Germany. The joint venture subsequently entered into a Scandinavian joint venture as well as one for Hungary and Czechoslovakia. Headquartered in Goirle, The Netherlands, the organization markets products under both the Rubbermaid and Curver brand names. Rubbermaid accounts for its 40% share of the venture using the equity accounting method.
The percent of net sales contributed by each of the consumer and institutional classes of products for the three years ended December 31, 1993, was as follows:
Raw Materials -------------
The principal raw materials used in the manufacture of Registrant's products are various plastic resins and synthetic rubber (all of which are derivatives of petroleum or natural gas liquids) and color concentrates. All of these items are available from numerous competitive sources. Even though a significant portion of the Registrant's raw materials are derivatives of natural gas, the increase in crude oil costs during 1990 resulting from the Persian Gulf crisis was reflected in Registrant's costs of raw materials. Since that time, crude oil costs have returned to more normal levels, and resin prices have decreased to more realistic supply/demand levels. Registrant expects to obtain adequate resins for its needs and has accelerated its continuing program of substituting available or reformulated resins where practical and consistent with quality considerations.
Patents and Trademarks ----------------------
There are no patents or licenses considered material to the business. The Registrant is of the opinion that through sustained advertising and use, the trademark RUBBERMAID has become of value in the identification and acceptance of its products, especially in North America. In addition, Registrant has many well-known brands such as CON-TACT (pressure sensitive decorative coverings), ELDON (office products), LITTLE TIKES (toys), and SECO (floor maintenance products) that compete in domestic and international markets.
Seasonality -----------
Historically, the year-end holiday season records the highest sales volume for the toy industry; however, the Little Tikes spring and summer products have served to more evenly balance monthly shipments. Rubbermaid Specialty Products concentrates its efforts on product categories of a seasonal nature, including insulated products, outdoor casual furniture, planters, and bird feeders. Insulated product and casual resin furniture sales are highest during the first six months of the year, and inventories are built during the other periods of the year in order to more easily accommodate demand. No material portion of the Registrant's other businesses is of a highly seasonal nature.
Working Capital ---------------
Working capital requirements of the business increase generally as sales volumes increase. There are normally no unusual working capital needs existent at any one time in the ordinary course of business. Dating programs offering extended terms are carried on by the various operating companies as part of their normal marketing activities.
Customers ---------
Sales are made to a broad range of customers, one of which accounted for 14%, 13%, and 11% of net sales in 1993, 1992, and 1991, respectively. Due in part to Registrant's perception that consumers are loyal to Registrant's brand names, Registrant does not believe that the loss of any one customer would have a materially adverse effect on its business.
Backlog -------
The Registrant produces to and sells from inventory for the majority of its products. The amount of backlog existent at any one time is not a significant factor in the business.
Competition -----------
All markets served by the Registrant and its subsidiaries are competitive as to price, service, and product performance. Most of the Registrant's products compete not only with those of other manufacturers using similar raw materials but also with products manufactured from other materials. Many of the competitor companies are either closely held or are divisions of larger entities. The Registrant is recognized as a strong competitive factor in the marketplace, but there is no reliable quantitative manner in which the aggregate competitive position of the Registrant can be determined.
Research and Development ------------------------
The Registrant expended approximately $28,202,000, $25,951,000, and $23,239,000 during 1993, 1992, and 1991, respectively, on research activities related to product, process and materials development, and mold design. These costs are charged to operations as incurred.
Environmental Matters ---------------------
Compliance with Federal, State, and local provisions, which have been enacted or adopted regulating the discharge of materials into the environment, or otherwise relating to the protection of the environment, is not expected to have an adverse effect upon the capital expenditures, earnings, or competitive position of the Registrant and its subsidiaries. Reference is made to page 35 of the 1993 Annual Report to Shareholders, which is contained in Exhibit 13 hereof, concerning further information regarding Registrant's Environmental Program.
Employees ---------
The average number of persons employed by Registrant and its subsidiaries during 1993 was 11,978.
Foreign Operations ------------------
Reference is made to page 33 of the 1993 Annual Report to Shareholders, which is contained in Exhibit 13 hereof, for information concerning Registrant's operations in different geographical areas. Export sales are not material and are, therefore, not separately stated.
Registrant uses a variety of approaches to expand and develop international markets. To maximize return on existing investments, emphasis is placed on exporting from existing manufacturing facilities. Where market size and economics justify, manufacturing facilities are established - for example, Canada, Europe and Mexico. Licensing arrangements are used in those markets where the costs of importing are prohibitive and where Company-owned manufacturing is not economically justified. Today, Rubbermaid products are distributed worldwide.
To accelerate international growth, foreign businesses were repositioned in January 1990 to provide direct line reporting relationships with their counterpart domestic operation. The management of Rubbermaid businesses around the world, plus the coordination of sales and foreign markets, are the responsibility of the respective core operating companies. The Corporate role is to develop and coordinate with the core businesses strategic plans, priorities, and global operations. To improve efficiencies in the new regions being developed, staff functions are centralized, while the line functions are decentralized to each core business.
No greater known significant risk is attendant to the foreign business than to the domestic business conducted by the Registrant and its subsidiaries.
ITEM 2.


ITEM 2. PROPERTIES - ------- ----------
Registrant and its subsidiaries have manufacturing and/or warehousing locations in 14 states and 10 foreign countries.
Major plant and warehouse locations of Registrant are as follows:
Home Products Division - Wooster and Akron, Ohio; Cortland, New York; Cleburne and Greenville, Texas; Phoenix, Arizona; Statesville, North Carolina; Mississauga and Montreal (leased), Canada; and Mexico City, Mexico.
Rubbermaid Specialty Products Inc. - Stanley and Huntersville (leased), North Carolina; and Goddard and Winfield, Kansas.
The Little Tikes Company - Hudson, Sebring, and Stow (leased), Ohio; Aurora and Farmington, Missouri; City of Industry, California (leased), Shippensburg, Pennsylvania; Dublin, Ireland; and Guelph, Canada (leased).
Rubbermaid Commercial Products Inc. - Winchester, Virginia; Centerville, Iowa; Cleveland, Tennessee; Oakville, Canada; and Welschenrohr, Switzerland (leased).
Rubbermaid Office Products Inc. - Maryville, Tennessee; Carson, California (leased); Itasca, Illinois (leased); Cranbury, New Jersey (leased); Markham, Canada (leased); Shefford, England (leased).
Certain portions of the Cortland, New York facility are leased from Industrial Development Authorities pursuant to industrial development bond financing; however, Registrant will own the facilities upon repayment of such financing. Certain other facilities are subject to mortgages securing industrial revenue bond financing.
The properties and facilities of the Registrant and its subsidiaries are modern and suitable to the requirements of the business. On an overall basis, these facilities, with certain exceptions due primarily to general economic slowdowns, have been operated near capacity. As a general rule, continuing capital expenditures are required each year to provide the necessary plant, equipment, and tooling to support the growth of the business. To supplement its own facilities, Registrant has followed a practice of sourcing a portion of its production and warehousing requirements from third parties.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS - -------- -----------------
There are no material pending legal proceedings to which the Registrant or any of its subsidiaries is a party.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - -------- ---------------------------------------------------
During the fourth quarter of the fiscal year covered by this Form 10-K, no matter was submitted to a vote of Registrant's shareholders, through the solicitation of proxies or otherwise.
All executive officers who are officers of Registrant are elected for a one-year term.
PART II
ITEM 5.
ITEM 5. Market for Registrant's Equity Stock and Related Stockholder Matters - ------- --------------------------------------------------------------------
Registrant's Common Shares are traded on the New York Stock Exchange under the symbol RBD. As of January 31, 1994, Registrant had approximately 22,700 shareholders of record. Reference is made to page 33 of the 1993 Annual Report to Shareholders, which is contained in Exhibit 13 hereof, for information concerning sales prices for and dividends paid on Registrant's Common Shares during 1993 and 1992.
ITEM 6.
ITEM 6. Selected Financial Data - ------- -----------------------
Reference is made to pages 36 and 37 of the 1993 Annual Report to Shareholders, which are contained in Exhibit 13 hereof, which pages include the Summary of Consolidated Operations for the five years ended December 31, 1993 as part of the Registrant's "Consolidated Financial Summary", which information is incorporated by reference herein.
ITEM 7.
ITEM 7. Management's Discussion and Analysis of Financial Condition and - ------- --------------------------------------------------------------- Results of Operations ---------------------
Reference is made to pages 34 and 35 of the 1993 Annual Report to Shareholders, which are contained in Exhibit 13 hereto, which include "Management's Discussion and Analysis of Financial Condition and Results of Operations" for the years 1993, 1992, and 1991, which information is incorporated herein by reference.
ITEM 8.

ITEM 8. Financial Statements and Supplementary Data - ------- -------------------------------------------
Reference is made to pages 25 through 33 of the 1993 Annual Report to Shareholders, which are contained in Exhibit 13 hereto, which include the consolidated financial statements and the notes thereto as of December 31, 1993 and 1992, and for each of the years in the three year period ended December 31, 1993, together with the independent auditors' report thereon of KPMG Peat Marwick dated February 1, 1994, which information is incorporated herein by reference. Supplemental schedules, together with the independent auditors' report thereon, are included herein. Such additional financial data should be read in conjunction with the consolidated financial statements.
ITEM 9.
ITEM 9. Changes In and Disagreements with Accountants on Accounting and - ------- --------------------------------------------------------------- Financial Disclosure -------------------- Registrant has not changed its independent auditors, and there have been no reportable disagreements with such auditors regarding accounting principles or practices or financial disclosure matters.
PART III -------- ITEM 10.


ITEM 10. Directors and Executive Officers of the Registrant - -------- --------------------------------------------------
Information regarding the directors of Registrant is included under the caption "Election of Directors" in the Registrant's proxy statement to be dated on or about March 11, 1994, and is incorporated herein by reference. Information regarding the executive officers of Registrant is included under a separate caption in Part I hereof and is incorporated by reference, in accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K.
ITEM 11.
ITEM 11. Executive Compensation - -------- ----------------------
Information regarding the above is included under the caption "Executive Compensation" in the Registrant's proxy statement to be dated on or about March 11, 1994, and is incorporated herein by reference.
ITEM 12.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management - -------- --------------------------------------------------------------
Information regarding the above is included under the captions "Security Ownership of Certain Beneficial Owners" and "Ownership By Management" in the Registrant's proxy statement to be dated on or about March 11, 1994, and is incorporated herein by reference.
ITEM 13.
ITEM 13. Certain Relationships and Related Transactions - -------- ----------------------------------------------
Information regarding the above is included under the caption "Security Ownership of Certain Beneficial Owners" in the Registrant's proxy statement to be dated on or about March 11, 1994, and is incorporated herein by reference.
PART IV ------- ITEM 14.
ITEM 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K - -------- ----------------------------------------------------------------
(a) The following documents are filed as part of this Form 10-K Report.
(1) The financial statements referred to in Item 8 above which are contained in Exhibit 13 hereto and which are incorporated by reference thereto.
(2) The following additional financial information:
Independent Auditors' Report on Supporting Schedules Schedule V - Property, Plant, and Equipment Schedule VI - Accumulated Depreciation and Amortization of Property, Plant, and Equipment Schedule VIII - Valuation and Qualifying Accounts Schedule IX - Short-Term Borrowings Schedule X - Supplementary Income Statement Information
(3) Exhibits 10(a) through 10(h) to this Item 14 constitute each executive compensation plan and arrangement of Registrant.
All other schedules have been omitted because the material is not applicable or is not required or because the required information is shown in the consolidated financial statements or in the notes thereto.
(b) There were no reports on Form 8-K filed for the quarter ended December 31, 1993.
(c) Exhibits (numbered in accordance with Item 601 of Regulation S-K).
(3a, 4a) Amended Articles of Incorporation of Rubbermaid Incorporated. Incorporated by reference from Exhibits 3a and 4a to Form 10-K for the year ended December 31, 1992.
(3b, 4b) Regulations of Rubbermaid Incorporated. Incorporated by reference from Exhibits 3a and 4a to Form 10-K for the year ended December 31, 1992.
(4c) Amended and Restated Rights Agreement between Rubbermaid Incorporated and Ameritrust Company National Association. Incorporated by reference from Exhibit 4 to Form 8 filed with the Commission on October 26, 1989.
(10a) Rubbermaid Incorporated Management Incentive Plan.
Incorporated by reference from Exhibit 10a to Form 10-K for the year ended December 31, 1992.
(10b) Rubbermaid Incorporated 1979 Restricted Stock Incentive Plan, as amended. Incorporated by reference from Exhibit 10(b) to Form 10-K for the Year ended December 31, 1987.
(10c) Rubbermaid Incorporated 1989 Restricted Stock Incentive Plan. Incorporated by reference from Exhibit 10(c) to Form 10-K for the year ended December 31, 1989.
(10d) Rubbermaid Incorporated Supplemental Executive Retirement Plan, as amended.
(10e) Rubbermaid Incorporated Supplemental Retirement Plan. Incorporated by reference from Exhibit 10(e) to Form 10-K for the year ended December 31, 1991.
(10f) Change-Of-Control Employment Agreements -
Identical agreements have been entered into with Gary S. Baughman, Arthur J. Brown, Charles A. Carroll, Richard D. Gates, Gary E. Kleinjan, Gary F. Mattison, James A. Morgan, Michael E. Naylor, Joseph M. Ramos, Wolfgang R. Schmitt, Thomas W. Ward, and George C. Weigand. Incorporated by reference from Exhibit 10(i) to Form 10-K for the year ended December 31, 1991.
(10g) Rubbermaid Incorporated Deferred Compensation Plan, as amended. Incorporated by reference from Exhibit 10(k) to Form 10-K for the year ended December 31, 1990.
(10h) Rubbermaid Incorporated 1993 Deferred Compensation Plan. Incorporated by reference to Exhibit A to Proxy Statement for April 27, 1993 Annual Meeting of Shareholders.
(13) Consolidated financial statements and other data from pages 25 to 37 of 1993 Annual Report to Shareholders.
(21) Subsidiaries of Registrant.
(23) Consent of KPMG Peat Marwick.
(24) Power of Attorney.
SIGNATURE - --------- 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.
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated on March 28, 1994.
INDEPENDENT AUDITORS' REPORT ----------------------------
The Shareholders and Board of Directors Rubbermaid Incorporated:
Under date of February 1, 1994, we reported on the consolidated balance sheets of Rubbermaid Incorporated and subsidiaries as of December 31, 1993 and 1992 and the related consolidated statements of earnings, cash flows and shareholders' equity for each of the years in the three-year period ended December 31, 1993 as contained in the 1993 annual report to shareholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year ended December 31, 1993. In connection with our audits of the aforementioned consolidated financial statements, we also have audited the related financial statement schedules as listed in Part IV, Item 14(a)(2). These financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick
Cleveland, Ohio February 1, 1994
Schedule X ---------- RUBBERMAID INCORPORATED AND SUBSIDIARIES Supplementary Income Statement Information Years ended December 31, 1993, 1992 and 1991 (Dollars in thousands)
EXHIBIT INDEX -------------
Exhibit Number Exhibit Description -------------- ------------------- (3a, 4a) Amended Articles of Incorporation of Rubbermaid Incorporated. Incorporated by reference from Exhibits 3a and 4a to Form 10-K for the year ended December 31, 1992.
(3b, 4b) Regulations of Rubbermaid Incorporated. Incorporated by reference from Exhibits 3a and 4a to Form 10-K for the year ended December 31, 1992.
(4c) Amended and Restated Rights Agreement between Rubbermaid Incorporated and Ameritrust Company National Association. Incorporated by reference from Exhibit 4 to Form 8 filed with the Commission on October 26, 1989.
(10a) Rubbermaid Incorporated Management Incentive Plan. Incorporated by reference from Exhibit 10(a) to Form 10-K for the year ended December 31, 1992.
(10b) Rubbermaid Incorporated 1979 Restricted Stock Incentive Plan, as amended. Incorporated by reference from Exhibit 10(b) to Form 10-K for the Year ended December 31, 1987.
(10c) Rubbermaid Incorporated 1989 Restricted Stock Incentive Plan. Incorporated by reference from Exhibit 10(c) to Form 10-K for the year ended December 31, 1989.
(10d) Rubbermaid Incorporated Supplemental Executive Retirement Plan, as amended.
(10e) Rubbermaid Incorporated Supplemental Retirement Plan. Incorporated by reference from Exhibit 10(e) to Form 10-K for the year ended December 31, 1991.
(10f) Change-Of-Control Employment Agreements -Identical agreements have been entered into with Gary S. Baughman, Arthur J. Brown, Charles A. Carroll, Richard D. Gates, Gary E. Kleinjan, Gary F. Mattison,James A. Morgan, Michael E. Naylor, Joseph M. Ramos, Wolfgang R. Schmitt, Thomas W. Ward, and George C. Weigand. Incorporated by reference from Exhibit 10(i) to Form 10-K for the year ended December 31, 1991.
EXHIBIT INDEX -------------
Exhibit Number Exhibit Description -------------- -------------------
(10g) Rubbermaid Incorporated Deferred Compensation Plan, as amended. Incorporated by reference from Exhibit 10(k) to Form 10-K for the year ended December 31, 1990.
(10h) Rubbermaid Incorporated 1993 Deferred Compensation Plan. Incorporated by reference to Exhibit A to Proxy Statement for April 27, 1993 Annual Meeting of Shareholders.
(13) Consolidated financial statements and other data from pages 25 to 37 of 1993 Annual Report to Shareholders.
(21) Subsidiaries of Registrant.
(23) Consent of KPMG Peat Marwick.
(24) Power of Attorney.