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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) January 26, 1999
WHIRLPOOL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-3932 38-1490038
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(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
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5. Other Events
On January 26, 1999 the registrant reported fourth-quarter and full-year
earnings for 1998. The registrant's reported fourth-quarter earnings from
continuing operations were $83 million, or $1.09 per diluted share, up 30
percent from fourth quarter 1997 earnings of $64 million, or 85 cents per
diluted share, excluding restructuring and non-recurring charges. Net earnings
for the fourth quarter were $83 million, or $1.09 per diluted share versus
reported net earnings of $92 million, or $1.22 per diluted share for the 1997
quarter.
The registrant reported that full-year 1998 earnings from continuing
operations were $310 million, or $4.06 per diluted share, up 37 percent from
$226 million, or $2.99 per diluted share for the 1997 period, excluding
restructuring and non-recurring charges. Full-year 1998 net earnings were $325
million, or $4.25 per diluted share, versus a reported net loss of $15 million,
or 20 cents per diluted share in 1997.
The registrant reported that it currently expected full-year 1999 net
earnings to increase between 5% and 10% from 1998 net earnings. The registrant
advised that it currently expected first quarter 1999 net earnings could be
adversely affected by the Brazilian currency devaluation against the U.S.
Dollar. The registrant currently anticipates that its first-quarter 1999 net
earnings may decline by one and one-half cents per diluted share for each one
percent of devaluation in the Brazilian currency. However, the registrant
announced that it is continuing to aggressively pursue action to improve its
operating performance in the Latin American region.
Item 7. Financial Statements and Exhibits
Copy of press release dated January 26, 1999 regarding the registrant's
earnings for the fourth-quarter and full-year 1998.
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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: January 29, 1999 By: /s/ Robert T. Kenagy
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Name: Robert T. Kenagy
Title: Associate General Counsel and
Secretary
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Christopher Wyse
616-923-3417
christopher j [email protected]
WHIRLPOOL CORPORATION POSTS 37 PERCENT IMPROVEMENT IN
FULL-YEAR 1998 RESULTS AND EXPECTS EARNINGS GROWTH IN 1999
BENTON HARBOR, Mich. - Jan. 26, 1999 - Whirlpool Corporation (NYSE: WHR) today
said strong performances by its North American and European businesses produced
a 30 percent increase in fourth-quarter earnings and a 37 percent increase in
full-year 1998 earnings from continuing operations.
"We delivered a solid performance through the power of our unique global
enterprise, with particularly strong results in North America and Europe more
than offsetting weak economic and business conditions in Latin America and
Asia," said David R. Whitwam, Whirlpool Chairman and CEO. "In addition, the
overall outlook for 1999 remains positive."
Fourth quarter earnings from continuing operations were $83 million, or
$1.09 per diluted share, up 30 percent from fourth quarter 1997 earnings of $64
million, or 85 cents per diluted share, excluding restructuring and non-
recurring charges. Net earnings for the fourth quarter were $83 million, or
$1.09 per diluted share versus reported net earnings of $92 million or $1.22 per
diluted share for the 1997 quarter.
Full-year 1998 earnings from continuing operations were $310 million or
$4.06 per diluted share, up 37 percent from $226 million, or $2.99 per diluted
share for the 1997 period, excluding restructuring and non-recurring charges.
Full-year 1998 net earnings were $325 million, or $4.25 per diluted share,
versus a reported net loss of $15 million, or 20 cents per diluted share in
1997.
Fourth-quarter sales were $2.7 billion, up nine percent from the 1997
period due to particularly strong unit shipments in North America and Europe and
due to full-quarter consolidation of the company's Brazilian subsidiaries.
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Whirlpool Corporation earnings - add one
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Full-year 1998 sales were $10.3 billion, up 20 percent from full-year 1997 due
to consolidation of the company's Brazilian subsidiaries.
Whirlpool North America completed the year reporting significant increases
in unit shipments, which grew about 10 percent, and sales that increased more
than 6 percent. These results helped drive record profitability for the year,
despite ongoing pricing pressure in the industry. Developments for the year
included several new product introductions such as the Whirlpool brand Resource
Saver high-efficiency clothes washer, which can yield up to 56 percent energy
and 47 percent water savings, and a new microwave hood combination offering the
largest usable capacity in the industry. New KitchenAid brand side-by-side
refrigerators and cooking products also contributed to the record performance.
The company also continues to benefit from its Operational Excellence program,
which drives productivity, quality improvements and manufacturing efficiencies.
In 1999 the company plans further performance improvements from growing
contract sales, ongoing efficiency gains and additional new product
introductions including exciting new clothes washers and dishwashers. The
company currently expects that U.S. appliance industry shipments in 1999 will
approximate 1998 levels.
Whirlpool Europe posted strong results in the fourth quarter, completing
1998 with a 125 percent gain in operating profit along with substantial gains in
unit shipments and sales. For the year, margins continued to improve driven
mainly from strong productivity gains. Product introductions, including new
Whirlpool brand products in freezing and refrigeration, along with growing sales
to new and existing customers also helped drive the dramatic performance
improvements.
In 1999 the company expects to continue this momentum through a combination
of sales growth initiatives and additional new product introductions
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Whirlpool Corporation earnings - add two
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in the clothes washing and cooking products categories. The company currently
expects appliance industry shipments in Western Europe to grow about 2 percent
in 1999.
In Latin America Whirlpool reported lower sales and unit shipments for both
the quarter and the full year resulting mainly from the widespread economic
downturn affecting the region. The company's earnings performance did, however,
improve from the third quarter of 1998. During the year the company
aggressively lowered costs and improved efficiency and productivity. The
improved profit performance was also driven by several new product introductions
in clothes washing, refrigeration, air conditioning and cooking under the
company's leading Brastemp and Consul brand names. These introductions were
only the latest products launched as part of the company's ongoing effort to
completely renew its entire product line.
For 1999 the company believes that the Latin American economy, as well as
the appliance industry, will remain under stress, as the timing of economic
recovery is uncertain. The company currently anticipates an adverse effect on
its first-quarter 1999 net earnings due to the devaluation of the Brazilian
currency against the U.S. dollar. Under current conditions in Brazil, the
company now expects that for every one percent of devaluation in the Brazilian
currency, its first-quarter 1999 net earnings could potentially be affected
negatively by approximately one and one-half cents per diluted share. Due to
the continuing economic uncertainty in the region, the company cannot accurately
project the full potential impact of the currency devaluation in the first
quarter of 1999. The company is, however, continuing to aggressively pursue
actions to improve its 1999 operating performance in the region.
Despite these issues, the company believes it is well positioned to deliver
solid long-term performance in the region, through a combination of new product
introductions, consumer focused service offerings and additional cost
reductions.
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Whirlpool Corporation earnings - add three
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The company currently anticipates that full-year 1999 appliance industry volumes
in Brazil will decline between 5 and 10 percent from 1998 levels.
Whirlpool Asia reported a positive operating profit in the fourth quarter
and a 73 percent improvement in operating performance for the year. Substantial
operating improvements followed the company's extensive efforts to lower costs
while increasing productivity across the region. In addition, the company grew
its unit shipments in India as consumers continued to make Whirlpool brand
refrigerators and washing machines the top choice. For the year, exports of
Whirlpool brand microwave ovens built in China rose sharply.
In 1999 the company currently expects that its Asian business will perform
at a breakeven level or better as unit volumes, as well as the Whirlpool brand
name, continue to grow across the region.
In summary Whitwam noted, "While some of our major appliance markets will
continue to be challenged by economic conditions, we believe the strength of our
combined global businesses will allow us to deliver solid performance
improvements. In fact, despite continued uncertainty in Brazil, we expect
operating profit to show improvement in the first quarter of 1999 and to grow
between 10 and 15 percent for the full year, driven by strong performances in
North America and Europe as well as a continued turnaround in Asia. Net
earnings for the first quarter, however, could be down versus first quarter 1998
depending on the size of the Brazilian currency devaluation. Operating
performance improvements and other aggressive actions currently under
consideration by the company worldwide may mitigate the expected impact of the
Brazilian currency devaluation, which is anticipated to be about 30 percent for
the year. Again, in spite of difficult economic and business conditions in
Brazil and elsewhere, we currently expect to deliver year-over-year net earnings
growth of between 5 and 10 percent."
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Whirlpool Corporation earnings - add four
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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 more than 170
countries.
###
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CONSOLIDATED CONDENSED BALANCE SHEETS
WHIRLPOOL CORPORATION
(millions of dollars)
<TABLE>
<CAPTION>
December 31 December 31
1998 1997
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ASSETS
Current Assets
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<S> <C> <C>
Cash and equivalents $ 636 $ 578
Trade receivables, less allowances of
(1998: $116; 1997: $156) 1,711 1,565
Inventories 1,100 1,170
Prepaid expenses and other 268 191
Deferred income taxes 167 215
Net assets of discontinued operations - 562
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Total Current Assets 3,882 4,281
Other Assets
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Investment in affiliated companies 108 100
Intangibles, net 936 916
Deferred income taxes 262 220
Other 329 378
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1,635 1,614
Property, Plant and Equipment
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Land 77 92
Buildings 900 969
Machinery and equipment 4,534 4,201
Allowance for Depreciation (3,093) (2,887)
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2,418 2,375
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Total Assets $ 7,935 $ 8,270
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
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Notes payable $ 905 $1,332
Accounts payable 1,079 987
Employee compensation 271 265
Accrued expenses 870 858
Restructuring costs 117 212
Current maturities of long-term debt 25 22
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Total Current Liabilities 3,267 3,676
Other Liabilities
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Deferred income taxes 152 190
Postemployment benefits 622 598
Other liabilities 192 188
Long-term debt 1,087 1,074
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2,053 2,050
Minority Interests 614 773
Stockholders' Equity
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Common stock 83 82
Paid-in capital 321 280
Retained earnings 2,024 1,801
Unearned restricted stock (3) (6)
Accumulated other comprehensive income (183) (149)
Treasury stock - at cost (241) (237)
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Total Stockholders' Equity 2,001 1,771
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Total Liabilities and Stockholders' Equity $7,935 $8,270
============ ===========
</TABLE>
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SUPPLEMENTAL PRO-FORMA SCHEDULE
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
WHIRLPOOL CORPORATION
FOR THE PERIOD ENDED DECEMBER 31
(millions of dollars except share and dividend data)
<TABLE>
<CAPTION>
Fourth Quarter Twelve Months
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1998 1997 Pro-forma 1998 1997 Pro-forma
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<S> <C> <C> <C> <C>
Net sales $ 2,735 $ 2,739 $ 10,323 $ 10,467
EXPENSES:
Cost of products sold 2,045 2,039 7,805 7,880
Selling and administrative 498 524 1,791 1,986
Intangible amortization 11 9 39 37
Restructuring costs - - - -
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2,554 2,572 9,635 9,903
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OPERATING PROFIT 181 167 688 564
OTHER INCOME (EXPENSE):
Interest and sundry income 27 8 136 75
Interest expense (63) (74) (260) (273)
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EARNINGS BEFORE INCOME TAXES
AND OTHER ITEMS 145 101 564 366
Income taxes 48 35 209 117
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EARNINGS FROM CONTINUING OPERATIONS
BEFORE EQUITY EARNINGS AND MINORITY INTERESTS 97 66 355 249
Equity earnings of affiliated companies (1) (1) 1 (2)
Minority interests (13) (1) (46) (21)
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EARNINGS FROM CONTINUING OPERATIONS 83 64 310 226
Discontinued operations less applicable taxes - 1 - 12
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NET EARNINGS $ 83 $ 65 $ 310 $ 238
========== ============ ========== ============
Per share of common stock:
Basic earnings from continuing operations $ 1.10 $ .86 $ 4.09 $ 3.02
Basic net earnings $ 1.10 $ .87 $ 4.09 $ 3.18
Diluted earnings from continuing operations $ 1.09 $ .85 $ 4.06 $ 2.99
Diluted net earnings $ 1.09 $ .86 $ 4.06 $ 3.15
Cash dividends $ .34 $ .34 $ 1.36 $ 1.36
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Note: The comparison of 1998 earnings to 1997 results on Whirlpool's Statement of Earnings is complicated by several transactions.
Significant restructuring and other non-recurring charges were recorded in the third and fourth quarters of 1997 and
Whirlpool's Brazilian subsidiaries were consolidated starting in November of 1997. Also, Whirlpool recorded gains for the sale
of WFC assets in the fourth quarter of 1997 and the first half of 1998. The amounts on this pro-forma schedule have been
restated to exclude the non-recurring charges and WFC gain and to include the Brazilian subsidiaries on a consolidated basis
for the full year.
</TABLE>
