ATLANTA--(BUSINESS WIRE)--Newell Brands Inc. (NYSE: NWL) announced its second quarter 2016 financial results today.

“We are pleased to report a very good quarter, our first as Newell Brands. Our results benefited from the combination with Jarden and strong top line growth in a number of key businesses, including Writing, Baby, Food & Beverage, Yankee Candle and Appliances,” said Newell Brands Chief Executive Officer Michael Polk. “Increased investment in consumer-driven innovation and advertising and promotion helped drive broad-based market share gains on our strategic businesses and in our priority geographies. Gross margin and operating cash flow were on plan, and we believe we are well positioned to achieve our full year financial outlook.

“We are making good progress on the integration of the legacy Newell Rubbermaid and Jarden businesses. A number of work streams are in full flight and we are confident in our plans to deliver both the savings associated with Project Renewal and the $500 million in cost synergies expected over the next four years related to the Jarden transaction. Importantly, the strategic analysis critical to re-shaping our priorities and investment choices is well underway. This work has increased our confidence in our potential to consistently deliver leading levels of value creation for our shareholders and has heightened our excitement about the future of Newell Brands.”

Second Quarter 2016 Operating Results

Net sales increased 147.2 percent to $3.86 billion, compared with $1.56 billion in the prior year, largely due to the inclusion of $2.22 billion in net sales from the acquired Jarden business.

Core sales grew 5.0 percent. (As of April 15, 2016, Newell Brands core sales include pro forma core sales associated with the Jarden transaction as if the combination occurred April 15, 2015.) Core sales exclude a negative 130 basis point impact from foreign currency and a net positive 1,600 basis point contribution from acquisitions, divestitures and the December 31, 2015 deconsolidation of the company’s Venezuelan operations.

Reported gross margin was 28.4 percent compared with 39.8 percent in the prior year, largely the result of a $333.7 million charge for the inventory step-up related to the Jarden transaction.

Normalized gross margin was 37.2 percent compared with 40.0 percent in the prior year. The negative mix effect from the Jarden acquisition and the deconsolidation of Venezuela, as well as the impact of adverse foreign currency, were partially offset by the benefits of productivity and pricing.

Reported operating income was $137.7 million compared with $214.7 million in the prior year. Reported operating margin was 3.6 percent of sales compared with 13.8 percent of sales in the prior year. In addition to the factors cited in the explanation of gross margin, reported operating margin was negatively impacted by transaction related costs, acquisition-related amortization costs and costs associated with the integration of the legacy Newell Rubbermaid and Jarden businesses.

Normalized operating income was $607.9 million compared with $249.4 million in the prior year. Normalized operating margin decreased 20 basis points to 15.8 percent of sales as the negative mix effect from the Jarden acquisition, the impact of increased advertising and promotion and negative foreign currency was partially offset by Project Renewal savings, cost synergies and the positive mix effect of strong Writing growth.

The reported tax rate for the quarter was 20.3 percent, compared with 22.7 percent in the prior year. The normalized tax rate was 29.2 percent, compared with 24.5 percent in the prior year, a reflection of the inclusion of the Jarden business with its historically higher tax rate and the geographic mix effect of strong U.S. performance across the total portfolio.

Reported net income was $135.2 million compared with $148.5 million in the prior year. Reported diluted earnings per share were $0.30 compared with $0.55 in the prior year. The decline was largely attributable to the income related to the acquired Jarden businesses, strong income growth on the legacy Newell Rubbermaid businesses and a $161.0 million gain on the sale of the Décor business, offset by dilution from a higher share count and expenses related to the Jarden transaction, including inventory step-up, increased amortization of intangibles, and increased interest and other expenses.

Normalized net income was $349.2 million compared with $174.5 million in the prior year. Normalized diluted earnings per share increased 21.9 percent to $0.78 compared with $0.64 in the prior year. The improvement was driven by strong sales growth, the contribution from the Jarden and Elmer’s acquisitions and Project Renewal savings, partially offset by an increase in advertising and promotion support, negative foreign currency impact, a higher income tax rate, increased interest expense and increased shares outstanding.

Operating cash flow was $596.5 million compared with $102.5 million in the prior year, reflecting the contribution from the Jarden acquisition, including contributions from Jostens and Waddington, improved operating results and favorable working capital movements.

A reconciliation of the “as reported” results to “normalized” results is included in the appendix.

Second Quarter 2016 Operating Segment Results

Writing net sales increased 15.8 percent to $574.4 million, with strong core sales growth and the benefit of the Elmer’s acquisition partially offset by the deconsolidation of Venezuelan operations and the negative impact of foreign currency. Writing core sales increased 11.3 percent, reflecting strong innovation such as Paper Mate® InkJoy™ Gel Pens, excellent Back-to-School sell in, increased advertising and promotion support and pricing. Reported operating income was $154.1 million compared with $132.5 million in the prior year. Reported operating margin was 26.8 percent compared with 26.7 percent in the prior year. Normalized operating income was $159.0 million versus $133.0 million last year. Normalized operating margin was 27.7 percent of sales, a 90 basis point increase versus last year, as pricing, productivity and cost management more than offset increased advertising and promotion spending and the negative mix impact of the deconsolidation of Venezuela.

Home Solutions net sales decreased 1.1 percent to $433.5 million as strong Food & Beverage growth driven by innovation such as the Rubbermaid® FreshWorks™ produce saver and strong growth of the Contigo® and bubba® beverageware brands was more than offset by the continued planned contraction of the lower margin Rubbermaid Consumer Storage business, a decline in the divested Décor business and unfavorable foreign currency. Home Solutions core sales increased 1.7 percent. Reported operating income was $41.7 million compared with $68.7 million in the prior year, due largely to a significant increase in advertising and promotion on new products and unfavorable foreign currency. Reported operating margin was 9.6 percent of sales, a 610 basis point decrease compared with the prior year. Normalized operating income was $47.9 million versus $69.9 million last year. Normalized operating margin was 11.0 percent of sales, a 490 basis point decrease versus last year.

Tools net sales declined 3.8 percent to $197.4 million driven by continued macroeconomic challenges in Brazil, industrial sector softness in China and negative foreign currency, partially offset by growth in North America and Europe. Tools core sales decreased 2.3 percent. Reported operating income was $22.2 million compared with $23.4 million in the prior year. Reported operating margin was 11.2 percent of sales, a 20 basis point decrease compared with the prior year due to the negative impact of foreign currency and increased Project Renewal costs. Normalized operating income was $23.1 million versus $23.4 million last year. Normalized operating margin was 11.7 percent of sales, a 30 basis point increase versus last year as geographic mix, productivity and pricing more than offset the challenging growth and negative foreign currency impact in Brazil.

Commercial Products net sales declined 7.9 percent to $194.0 million, primarily due to the divestiture of the Rubbermaid medical cart business, the negative impact of foreign currency and softness in the North American distributive trade channel, largely related to planned complexity reduction activity. Core sales decreased 1.4 percent. Reported operating income was $25.4 million compared with $28.9 million in the prior year. Reported operating margin was 13.1 percent of sales, a 60 basis point decrease versus the prior year due to the negative impact of foreign currency and increased Project Renewal costs. Normalized operating income was $26.7 million versus $29.0 million last year. Normalized operating margin was 13.8 percent of sales, flat to last year as pricing and productivity offset the negative impact of foreign currency.

Baby & Parenting net sales increased 12.4 percent to $236.9 million, largely due to continued strong sales momentum in North America, driven by innovative new products such as the Graco® Extend2Fit™ Convertible Car Seat. Core sales increased 11.1 percent. Reported operating income was $24.4 million compared with $16.7 million in the prior year. Reported operating margin was 10.3 percent of sales, a 240 basis point increase compared with prior year. Normalized operating income was $26.0 million versus $16.8 million last year. Normalized operating margin was 11.0 percent of sales, a 300 basis point increase versus last year. Normalized operating margin improvement was attributable to strong volume growth and favorable foreign currency.

Branded Consumables net sales were $777.3 million. On a pro forma basis, net sales increased 36.8 percent versus prior year, largely due to the Waddington acquisition. Core sales increased 7.8 percent on a pro forma basis compared with prior year, attributable primarily to strong growth at Yankee Candle and Home & Family in Europe. The segment had a reported operating loss of $26.0 million reflecting inventory step-up and integration and other costs related to the Jarden transaction. Reported operating margin was not meaningful due to the operating loss. Normalized operating income was $107.7 million. Normalized operating margin was 13.9 percent of sales.

Consumer Solutions net sales were $406.6 million. On a pro forma basis, net sales increased 4.9 percent versus prior year, driven by strong growth in kitchen appliances, offset by negative foreign exchange. Core sales increased 8.3 percent on a pro forma basis compared with prior year. The segment had a reported operating loss of $16.5 million reflecting inventory step-up and integration and other costs related to the Jarden transaction. Reported operating margin was not meaningful due to the operating loss. Normalized operating income was $49.5 million. Normalized operating margin was 12.2 percent of sales.

Outdoor Solutions net sales were $953.4 million. On a pro forma basis, net sales increased 53.6 percent compared with the prior year, largely attributable to the Jostens acquisition. Core sales increased 0.5 percent on a pro forma basis compared with prior year with growth in Pure Fishing largely offset by weather related declines on the winter sensitive businesses. Reported operating income was $55.4 million reflecting the contribution of Jostens, partially offset by inventory step-up and integration and other costs related to the Jarden transaction. Reported operating margin was 5.8 percent of sales. Normalized operating income was $215.7 million. Normalized operating margin was 22.6 percent of sales, with good Jostens performance in the seasonally important second quarter contributing to segment margins.

Process Solutions net sales were $85.1 million. On a pro forma basis, net sales increased 0.2 percent versus prior year. Core sales increased 0.5 percent on a pro forma basis compared with prior year. The segment had a reported operating loss of $1.4 million reflecting inventory step-up and integration and other costs related to the Jarden transaction. Reported operating margin was not meaningful due to the operating loss. Normalized operating income was $10.8 million. Normalized operating margin was 12.7 percent of sales.

About Newell Brands

Newell Brands (NYSE: NWL) is a leading global consumer goods company with a strong portfolio of well-known brands, including Paper Mate®, Sharpie®, Dymo®, EXPO®, Parker®, Elmer’s®, Coleman®, Jostens®, Marmot®, Rawlings®, Irwin®, Lenox®, Oster®, Sunbeam®, FoodSaver®, Mr. Coffee®, Rubbermaid Commercial Products®, Graco®, Baby Jogger®, NUK®, Calphalon®, Rubbermaid®, Contigo®, First Alert®, Waddington and Yankee Candle®. Driven by a sharp focus on the consumer, leading investment in innovation and brands, and a performance-driven culture, Newell Brands helps consumers achieve more where they live, learn, work and play.

This press release and additional information about Newell Brands are available on the company’s website,www.newellbrands.com.