WOOSTER, OHIO — Rubbermaid Inc. is exploring options to minimize the effects of unbridled resin pricing, including futures contracting and substituting materials whenever possible.
``We can't eliminate resin [pricing] cycles,'' said Wolfgang R. Schmitt, chairman and chief executive officer, adding, ``but we want to get rid of the spikes. We're looking at all of our contracts to see if we can spread our risks.''
Resin pricing was a key topic at the Wooster-based company's annual meeting April 22.
``We, like you, are not pleased with our stock performance,'' Schmitt told shareholders.
He pledged that Rubbermaid will do better for its owners by more than doubling its $1.01 per-share earnings by the end of the decade.
Schmitt said improved earnings will result from a major restructuring program that was undertaken in 1994, along with a much stronger emphasis on marketing.
A Rubbermaid spokesman in February told Wall Street analysts that a significant amount of the $335 million in savings obtained by restructuring went to pay for higher resin costs during the second half of 1996.
Schmitt, who said 1996 started off ``with improving performance,'' acknowledged the later quarters of the year proved more difficult.
Schmitt said a 42 percent increase in resin prices cost the company an additional $150 million, a problem compounded by a decline in sales at both the Little Tikes and Home Products divisions.
Rubbermaid is looking to international markets for growth, Schmitt said. One of the company's objectives is to have 30 percent of Rubbermaid's sales outside the United States by 2000. About 19 percent of the company's revenues now come from foreign sales, including joint ventures.
That objective includes plans to expand into Southeast Asia and Latin America, he said.
The Internet will be part of Rubbermaid's marketing push; in June, the firm's Web site is to be updated to permit online sales of Rubbermaid products.
Schmitt also made it clear that Little Tikes — which last year recorded a double-digit decrease in sales, and next month is scheduled to close its Aurora, Mo., facility — is a valued Rubbermaid subsidiary.
Rubbermaid has licensed the Little Tikes brand for the first time to Buster Brown shoes and electronic games for preschoolers.
``We are very unhappy about having to close the Aurora plant,'' Schmitt said. ``We're working behind the scenes trying to avert that situation.''
The 300,000-square-foot facility, which employs 300, existed ``primarily to serve Wal-Mart demand,'' Schmitt said. When the giant retailer opted to withdraw from the large outdoor furniture market, the 10-year-old Missouri plant, in which Rubbermaid had just invested $1 million, became redundant.
In other actions, the board of directors was expanded from 11 to 12 with the election of Scott Cowen, dean and the Albert J. Weatherhead III professor of management at the Weatherhead School of Management at Case Western Reserve University in Cleveland.
Rubbermaid also reported results for the quarter ended March 31. Sales rose to $601.7 million, vs. $533.3 million for the same period the prior year.
Profit declined to $34 million compared with $41.7 million for the first quarter of 1996.