<PAGE>
CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 3, 1998
WHIRLPOOL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-3932 38-1490038
- ---------------------------- ------ ----------
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2000 M63 North, Benton Harbor, Michigan 49022-2692
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(Address of principal executive officers) (Zip Code)
(616)-923-5000
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Registrant's telephone number, including area code
<PAGE>
Item 5. Other Events
------------
On February 3, 1998 the registrant reported fourth-quarter and
full-year earnings for 1997. The registrant reported fourth-quarter net
earnings of $65 million or 86 cents per diluted share. For the entire year of
1997, the registrant reported net earnings of $238 million or $3.15 per diluted
share. These earnings exclude a one-time fourth-quarter gain of $42 million, or
55 cents per diluted share, related to the previously announced sale of
Whirlpool Financial Corporation assets, third-quarter restructuring and
operating charges totaling $280 million, or $3.71 per diluted share, and a
fourth-quarter charge of $14 million, or 19 cents per diluted share, related to
restructuring in Latin America.
Including the above-mentioned nonrecurring items, the registrant's
fourth-quarter earnings were $92 million, or $1.22 per diluted share, and for
full-year 1997, the registrant reported a net loss of $15 million, or 20 cents
per diluted share.
Item 7. Financial Statements and Exhibits
---------------------------------
Copy of press release dated February 3, 1998 regarding the
registrant's earnings for the fourth-quarter and full-year 1997.
<PAGE>
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 hereunto duly authorized.
WHIRLPOOL CORPORATION
Registrant
Date: February 4, 1998 By: /s/ Daniel F. Hopp
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Name: Daniel F. Hopp
Title: Vice President, General
Counsel and Secretary
<PAGE>
Contact: Christopher Wyse
616-923-3417
[email protected]
Robin Skiles
616-923-2456
[email protected]
WHIRLPOOL CORPORATION REPORTS 36 PERCENT IMPROVEMENT FOR
FULL-YEAR 1997 RESULTS, INCLUDING 45 PERCENT IMPROVEMENT IN
FOURTH QUARTER
BENTON HARBOR, Mich. -- Feb. 3, 1998 -- Whirlpool Corporation (NYSE: WHR)
today said continued strong performance by its North American business and
significant improvement in its European appliance unit produced a 45-percent
increase in fourth-quarter earnings and a 36-percent increase in full-year 1997
earnings, both excluding nonrecurring items.
"In January of last year, we concluded that the global appliance industry,
and the economic environment in which we operate, was undergoing a fundamental
change," said Whirlpool Chairman and CEO David R. Whitwam. "Accordingly, we
developed a plan to significantly change and reduce the cost structure at
Whirlpool, extend our global leadership position and dramatically improve the
value-creating capabilities of our company. Our results for the quarter and
year demonstrate the success of these efforts, and we are poised to realize
continued improvements going forward."
Significant Earnings Improvement
Whirlpool's fourth-quarter earnings were $65 million, or 86 cents per
diluted share, 45-percent higher than $45 million, or 59 cents per diluted
share, one year ago. Full-year 1997 earnings were $238 million, or $3.15 per
diluted share, up 36 percent from earnings of $175 million, or $2.32 per diluted
share, in the previous year. These earnings exclude a one-time fourth-quarter
gain of $42 million, or 55 cents per diluted share, related to the previously
announced sale of Whirlpool Financial Corporation assets, third-quarter
restructuring and operating
- more -
[WHIRLPOOL LOGO HERE]
Administrative Center, Benton Harbor, Michigan 49022
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Whirlpool Corporation Earnings - add one
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charges totaling $280 million, or $3.71 per diluted share, and a fourth-quarter
charge of $14 million, or 19 cents per diluted share, related to restructuring
in Latin America.
Including the above-mentioned nonrecurring items, Whirlpool's fourth-
quarter earnings were $92 million, or $1.22 per diluted share, and for full-year
1997, the company reported a net loss of $15 million, or 20 cents per diluted
share.
Net sales for the fourth quarter were $2.5 billion, 18 percent better than
the prior year, due to the first-time consolidation of Brasmotor S.A. results.
Total year net sales reached $8.6 billion, one percent better than 1996.
Excluding this consolidation and the negative impact of currency fluctuations,
net sales were down one percent year-over-year.
"The programs we began implementing last year are expected to result in
reducing our annual expenses by more than $200 million when completed in 2000
through the elimination of about 7,900 positions worldwide and improved
efficiencies and productivity within all regions of our business," said Whitwam.
"These were difficult, but necessary, decisions to deal with the economic
realities of our industry. Significant progress has been made such as the
completion of nearly 50 percent of the job reductions, termination of our
Chinese refrigeration joint venture relationship and a reconfiguration of our
product development organization into an integrated global unit."
Whitwam added that the company has also been concentrating on growing its
business at the same time, including extending its ownership position in Latin
America, solidly growing its leading position in Central and Eastern Europe, the
start up of a new no-frost refrigerator factory in India and the addition, in
1998, of Whirlpool-built cooking products to Sears, Roebuck and Co., under the
Kenmore-brand name.
Whirlpool North America turned the cumulative effects of ongoing efficiency
gains and strong shipments into a 13-percent increase in quarterly
- more -
<PAGE>
Whirlpool Corporation Earnings add two
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operating profit. The company, benefiting from a continued strong new-order
position, finished 1997 with record unit shipments in several product
categories, including gas and electric ranges built at the company's two-year
old Tulsa (Okla.) division and stainless-steel KitchenAid brand dishwashers. The
company is also launching a new sub-brand, Whirlpool Gold, offering consumers
the very best of the Whirlpool brand in each major product category.
According to Whitwam, the U.S. appliance industry shipments were
essentially flat in 1997, largely due to slow sales of air conditioners. A
slight downturn is forecasted for 1998.
Whirlpool Europe continued its much-improved performance in the fourth
quarter, completing 1997 with solid operating profit gains, increases in unit
shipments and more than an 8 percent sales increase in local currency. For the
year, margins improved significantly through better brand and product mix, while
product total cost productivity reached a record level.
In 1998, the company expects to continue performance improvements through
revenue growth, generated from the introduction of new products and expanded
distribution in Western Europe and the emerging markets. In addition, Whirlpool
Europe will realize savings from cost reductions associated with restructuring
actions. Despite a continued tough economic and competitive environment, the
business anticipates a 2-percent gain in industry growth.
Total Latin American earnings declined in both the fourth quarter and for
the year, as the Brazilian home-appliance market cooled from record growth
between 1994 and 1996. The company is currently executing its integration plans
to lower costs and improve efficiency and productivity in an intensely
competitive market.
During the second quarter, the company expects to commission a new factory
in Manaus, Brazil, which will produce new high-efficiency air conditioners and
Whirlpool-designed microwave ovens. In addition, the company has initiated a
product-renewal effort to redesign and update the majority of its Latin American
- more -
<PAGE>
Whirlpool Corporation Earnings add three
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products during the next two years. The company's current outlook assumes that
full-year 1998 industry volumes for Brazil should approximate 1997 levels
"We believe our plans and strong market-share position, which is two and
one-half-times larger than any local competitor, will allow us to continue to
deliver solid performance," said Whitwam.
Whirlpool Asia, excluding nonrecurring items, reported a smaller operating
loss in both the fourth quarter and for full-year 1997, compared with the fourth
quarter and full-year 1996. The improved performance was due to reduced regional
costs following the company's restructuring, though fourth-quarter 1997 sales
were weaker than expected due to economic uncertainty in the region.
In 1998, the company expects to further improve regional performance
through continued implementation of the previously announced restructuring
actions. The company also anticipates growth in unit shipments from products
such as a frost-free refrigerator that is being built at the company's new
facility in Pune, India, and from sales of new microwave ovens and automatic
washers introduced to Chinese consumers in the second half of 1997.
Outlook for 1998
Whitwam concluded, "The steps taken in 1997, along with our continuing and
successful momentum in delivering high-quality products under great brands
around the world, are delivering the results we expected and we foresee
continued substantial improvement in the coming year."
Whirlpool Corporation is the world's leading manufacturer and marketer of
major home appliances. Headquartered in Benton Harbor, the company manufactures
in 13 countries and markets products under 11 major brand names in about 140
countries.
###
<PAGE>
WHIRLPOOL CORPORATION
SUMMARY TABLE
FOURTH-QUARTER, FULL-YEAR EARNINGS
(All-data in after-tax)
<TABLE>
<CAPTION>
Fourth Quarter Full-Year
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Earnings Per Diluted 86 cents 59 cents $3.15 $2.32
Share, Excluding
Nonrecurring Items
Earnings (Loss) Per $1.22 59 cents (20) cents $2.08
Diluted Share
Earnings Per Basic Share, 87 cents 60 cents $3.18 $2.35
Excluding Nonrecurring
Items
Earnings (Loss) Per Basic $1.24 60 cents (20) cents $2.10
Share
</TABLE>
Editors Note:
Earnings are now reported two ways, diluted and basic in accordance with FASB
Statement 128. Diluted per share basis includes shares currently outstanding and
possible conversion of options to common shares. Basic per share basis includes
only shares currently outstanding.
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION AND SUBSIDIARIES
FOR THE PERIOD ENDED DECEMBER 31
(millions of dollars except share and dividend data)
<TABLE>
<CAPTION>
Fourth Quarter Full Year
----------------- -----------------
1997 1996 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net sales $2,510 $2,126 $8,617 $8,523
EXPENSES:
Cost of products sold 1,887 1,644 6,604 6,623
Selling and administrative 473 403 1,625 1,557
Intangible amortization 9 8 34 35
Restructuring costs 35 - 343 30
------- ------- ------- --------
2,404 2,055 8,606 8,245
------- ------- ------- -------
OPERATING PROFIT 106 71 11 278
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (4) (15) (14) (23)
Interest expense (58) (38) (168) (155)
------- ------- ------- -------
EARNINGS (LOSS) BEFORE INCOME TAXES
AND OTHER ITEMS 44 18 (171) 100
Income taxes 17 19 (9) 70
------- ------- ------- -------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 27 (1) (162) 30
Equity in affiliated companies 6 32 67 93
Minority interests 17 9 49 18
------- ------- ------- -------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 50 40 (46) 141
Earnings (loss) from discontinued operations (less applicable taxes) - 5 (11) 15
Gain on disposal of discontinued operations (less applicable taxes) 42 - 42 -
------- ------- ------- -------
NET EARNINGS (LOSS) $ 92 $ 45 $ (15) $ 156
======= ======= ======= =======
Per share of common stock:
Basic earnings (loss) from continuing operations $ 0.67 $ 0.54 $(0.62) $ 1.90
Basic earnings (loss) 1.24 0.60 (0.20) 2.10
Diluted earnings (loss) from continuing operations $ 0.66 $ 0.53 $(0.62) $ 1.88
Diluted earnings (loss) 1.22 0.59 (0.20) 2.08
Cash dividends $ 0.34 $ 0.34 $ 1.36 $ 1.36
======= ======= ======= =======
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
CONSOLIDATED CONDENSED BALANCE SHEETS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
December 31 December 31
1997 1996
(millions of dollars) (Unaudited) (Audited)
----------- -----------
<S> <C> <C>
ASSETS
Current Assets
Cash and equivalents $ 578 $ 129
Trade receivables, less allowances of
$156 in 1997 and $45 in 1996 1,565 966
Financing receivables and leases,
less allowances - 1,400
Inventories 1,170 1,034
Prepaid expenses and other 191 188
Deferred income taxes 215 95
Net assets of discontinued operations 562 -
------- -------
Total Current Assets 4,281 3,812
Other Assets
Investment in affiliated companies 100 513
Financing receivables and leases, less allowance - 705
Intangibles, net 916 870
Deferred income taxes 220 152
Other 378 165
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1,614 2,405
Property, Plant and Equipment
Land 92 93
Buildings 969 731
Machinery and equipment 4,201 3,015
Accumulated depreciation (2,887) (2,041)
------- -------
2,375 1,798
------- -------
Total Assets $ 8,270 $ 8,015
======= =======
</TABLE>
<TABLE>
<CAPTION> December 31 December 31
1997 1996
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable $ 1,332 $ 2,038
Accounts payable 987 983
Employee compensation 265 226
Accrued expenses 858 624
Restructuring costs 212 32
Current maturities of long-term debt 22 119
------- -------
Total Current Liabilities 3,676 4,022
Other Liabilities
Deferred income taxes 190 206
Postemployment benefits 598 563
Other liabilities 188 161
Long-term debt 1,074 955
------- -------
2,050 1,885
Minority Interests 773 182
Stockholders' Equity
Common stock 82 81
Paid-in capital 280 246
Retained earnings 1,801 1,918
Unearned restricted stock (6) (7)
Cumulative translation adjustments (149) (76)
Treasury stock - at cost (237) (236)
------- -------
Total Stockholders' Equity 1,771 1,926
------- -------
Total Liabilities and Stockholders' Equity $ 8,270 $ 8,015
======= =======
</TABLE>
See notes to consolidated financial statements
<PAGE>
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
UNAUDITED PROFORMA - EXCLUDING NON-RECURRING ITEMS
WHIRLPOOL CORPORATION AND SUBSIDIARIES
FOR THE PERIOD ENDED DECEMBER 31
(millions of dollars except share and dividend data)
<TABLE>
<CAPTION>
Fourth Quarter Full Year
------------------ ------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales $2,510 $2,126 $8,617 $8,523
EXPENSES:
Cost of products sold 1,887 1,644 6,576 6,623
Selling and administrative 473 403 1,600 1,557
Intangible amortization 9 8 34 35
Restructuring costs - - - -
------ ------ ------ ------
2,369 2,055 8,210 8,215
------ ------ ------ ------
OPERATING PROFIT 141 71 407 308
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (15) (9) (23)
Interest expense (58) (38) (168) (155)
------ ------ ------ ------
EARNINGS (LOSS) BEFORE INCOME TAXES
AND OTHER ITEMS 83 18 230 130
Income taxes 29 19 100 81
------ ------ ------ ------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 54 (1) 130 49
Equity in affiliated companies 11 32 72 93
Minority interests 9 25 18
------ ------ ------ ------
EARNINGS (LOSS) FROM CONTINUING OPERATIONS 65 40 227 160
Earnings (loss) from discontinued operations (less applicable taxes) - 5 11 15
Gain on disposal of discontinued operations (less applicable taxes) - - - -
------ ------ ------ ------
NET EARNINGS (LOSS) $ 65 $ 45 $ 238 $ 175
====== ====== ====== ======
Per share of common stock:
Basic earnings (loss) from continuing operations $ 0.87 $ 0.54 $ 3.02 $ 2.15
Basic earnings (loss) 0.87 0.60 3.18 2.35
Diluted earnings (loss) from continuing operations $ 0.86 $ 0.53 $ 2.99 $ 2.13
Diluted earnings (loss) 0.86 0.59 3.15 2.32
Cash dividends $ 0.34 $ 0.34 $ 1.36 $ 1.36
====== ====== ====== ======
</TABLE>
See notes to consolidated condensed financial statements.
