FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
DATE OF REPORT: FEBRUARY 25, 1997
(Date of earliest event reported)
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-225 39-0394230
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
P.O. BOX 619100, DALLAS, TEXAS 75261-9100
(Address of principal executive offices) (Zip Code)
(972) 281-1200
(Registrant's telephone number, including area code)
Item 5. Other Events
Attached hereto as Exhibit 99 is a Press Release issued by Kimberly-Clark
Corporation in connection with matters discussed at a meeting with
securities analysts.
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.
KIMBERLY-CLARK CORPORATION
Date: February 25, 1997 By: /s/ John W. Donehower
----------------------------
John W. Donehower
Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
(99) Press Release issued by Kimberly-Clark Corporation in
connection with matters discussed at a meeting with securities
analysts.
Wendi E. Strong
(972) 281-1481
KIMBERLY-CLARK ANNOUNCES AGGRESSIVE FINANCIAL OBJECTIVES AND
DIVESTITURE OF STAND-ALONE PULP MILLS
``STRETCH' OBJECTIVES CALL FOR DOUBLING E.P.S. FROM OPERATIONS FROM
1995 TO 2000 AND CONSISTENTLY DELIVERING TOTAL SHAREHOLDER RETURN IN
EXCESS OF THE S&P 500
COMPANY INTENDS TO SELL PULP MILLS AT TERRACE BAY, ONTARIO; NEW
GLASGOW, NOVA SCOTIA; AND MIRANDA, SPAIN BY MID-YEAR 1998
BOARD OF DIRECTORS AUTHORIZES 2-FOR-1 STOCK SPLIT, DIVIDEND INCREASE
OF 4.3% AND ADDITIONAL 1 MILLION SHARE REPURCHASE
NEW YORK, February 25, 1997 - As a next step in driving shareholder
value, Kimberly-Clark Corporation (NYSE: KMB) today announced two
aggressive, ''stretch'' targets for its financial performance: 1)
doubling earnings per share from operations from $3.86 in 1995 to at
least $7.72 in the year 2000 and 2) delivering total shareholder
return consistently in excess of the S&P 500 Index.
At a meeting of investors and securities analysts here, Wayne R.
Sanders, chairman of the board and chief executive officer, announced
that to help reach its goals, the company intends to move out of the
cyclical, capital-intensive pulp business by selling its operations
and related woodlands at Terrace Bay, Ontario; New Glasgow, Nova
Scotia; and Miranda, Spain, by mid-1998.
'High priority will be placed on the needs of our employees
and their communities in choosing a buyer and structuring a sale,'
Mr. Sanders said. 'Terrace Bay and New Glasgow, in particular, are
efficient and competitive facilities and will be sold only at a fair
price. We then intend to redeploy the capital from our pulp
operations into higher-returning investments for our shareholders.'
(In December 1996, the company announced the proposed sale of its pulp
and newsprint operations in Coosa Pines, Ala. That sale to Montreal-
based Alliance Forest Products is expected to be completed in late
March for approximately $600 million in cash.)
Separately, the board of directors of Kimberly-Clark announced a
2-for-1 split of the company's common stock and increased the
quarterly dividend by 4.3 percent to 48 cents from 46 cents per share
on a pre-split basis. The board also authorized the
repurchase of an additional 1 million shares of the company's common
stock, bringing the number of shares currently available for
repurchase to 2.2 million.
'Since our merger with Scott Paper in December 1995, Kimberly-
Clark has become a much stronger company in both financial and
strategic terms,' Mr. Sanders said. 'These latest board actions
reflect our record earnings in 1996, our strong balance sheet and our
confidence in the future.
'The merger accelerated our transformation to a more global
consumer products company, and today we are a world leader in our
three core businesses - personal care, consumer tissue and away-from-
home products,' he said.
'Now, we are raising the bar for our financial performance and
implementing the final phase of our full transition from a diversified
paper company to a global consumer products company,' he said.
'Today's announcements, which come as Kimberly-Clark celebrates its
125th year in business, clearly signal our belief that we have
outstanding prospects that should lead to substantial earnings growth
and continued superior returns for our shareholders.'
FINANCIAL TARGETS
Mr. Sanders said the company must add $1.1 billion in net
earnings or the equivalent of $1.8 billion in operating earnings to
double earnings per share from operations for the five-year period
from 1995 to 2000. About half of this growth is expected to come from
merger-related synergies, further productivity gains and margin
expansion, primarily related to the European diaper business and the
commercialization of new tissue technology. He said worldwide volume
growth would account for a third of the increase in earnings, with the
balance coming from acquisitions, which will more than replace the
loss of earnings from divested businesses.
Commenting on total shareholder return, he said, 'Kimberly-Clark
has outperformed the S&P in every five-year period since 1980, and our
prospects have never been as strong as they are today.' He also told
investors and analysts the company has implemented a revised annual
bonus plan based on achieving business unit results consistent with
the new financial objectives.
PULP STRATEGY
Internal pulp operations currently meet approximately 80 percent
of Kimberly-Clark's worldwide virgin fiber needs; following the
divestitures of its Coosa Pines operations and its stand-alone pulp
mills, that number will be reduced to below 30 percent. Mr. Sanders
said the company will retain sufficient pulp and recycled fiber
capacity in North America to support its away-from-home products and
its consumer tissue products in the value category, all of which
compete with products from fiber-integrated manufacturers.
Consequently, pulp operations are being retained in Everett, Wash.,
and Mobile, Ala., where the company also manufactures tissue products.
As part of its overall fiber strategy, the company plans to write
down certain pulp assets and to close its Mohave converting mill in
Yucca, Ariz. In the first quarter of 1997, the company expects to
record a net gain of 7 cents per share, recognizing the sale of the
Coosa Pines mill and woodlands, as well as costs associated with
write-downs and the closure of the Mohave operation.
Morgan Stanley & Co. Incorporated has been retained to assist the
company in selling the Canadian pulp mills and related woodlands.
COMMON STOCK ACTIONS
Regarding the stock split, an additional share of stock for each
share held will be issued on April 2, 1997, to stockholders of record
on March 7, 1997. The increased dividend also is payable according to
those dates. The 2-for-1 split will be the seventh in the company's
history and the fourth since 1984. This will be the 25th consecutive
year Kimberly-Clark has raised its quarterly dividend.
Mr. Sanders said the company has already repurchased 2.5 million
shares of its common stock this year and expects to buy back the
remaining 2.2 million shares available for repurchase by the end of
the year. He added that he expects additional repurchases will be
authorized during 1997 up to the limits allowed by pooling of
interests accounting.
1997 OUTLOOK
As to the future, Mr. Sanders said the percentage increase in net
sales year-to-year is likely to be relatively modest due to the loss
of revenues of divested businesses; however, volume growth from
ongoing businesses is expected to be at least 6 percent in 1997.
'Assuming prices remain stable, operating margins should continue to
improve on the strengths of volume gains and cost savings,' he said.
Because the merger has afforded additional tax planning
opportunities, the company's consolidated effective tax rate is
expected to decline from 35 percent in 1996 to 33 percent in 1997, Mr.
Sanders said. Expenditures for capital spending and regional
acquisitions this year will be about $1.1 billion to $1.2 billion, he
added.
Mr. Sanders also noted that, as previously disclosed, the sale of
Coosa and mandated changes in accounting for the company's Mexican
affiliate are expected to have a negative impact on 1997 earnings per
share of 5 cents and 3 cents, respectively.
He added that merger savings in 1996 of $280 million exceeded the
company's target by $30 million. 'Therefore, the incremental savings
in 1997 is expected to be $120 million instead of $150 million,' he
said. 'In other words, we're right on track to achieve our original
estimate of a total of $400 million in savings in 1997 and $500
million annually by 1998.
'As usual, we have our work cut out for us, but we have enormous
confidence in Kimberly-Clark's future,' Mr. Sanders said. 'We
delivered on the objectives we set last year, and we are committed to
meeting our new stretch objectives.'
A Fortune 100 company, Kimberly-Clark is a leading global
manufacturer of personal care, consumer tissue and away-from-home
products. The company's global brands include Huggies, Pull-Ups,
Kotex, Depend, Kleenex, Scott, Kimwipes and Wypall. Other brands
well-known outside the U.S. include Andrex, Scottex, Page, Popee and
Kimbies. Kimberly-Clark also is a major producer of professional
health care products and premium business, correspondence and
technical papers. The company has manufacturing operations in 35
countries and sells its products in more than 150 countries.
Certain matters contained in this news release concerning the business
outlook, anticipated financial results and contemplated transactions
of the company constitute forward-looking statements and are based
upon management's expectations and beliefs concerning future events
impacting the company. There can be no assurance that these events
will occur or that the company's results will be as estimated. The
assumptions used as a basis for the forward-looking statements include
many estimates which, among other things, depend on the achievement of
future volume increases and cost savings, including cost savings
related to the merger with Scott Paper Company, the consummation of
projected divestitures on terms advantageous to the company and the
availability of suitable acquisition candidates. In addition,many
factors outside the control of the company, including the prices of
raw materials, potential competitive pressures on selling prices or
advertising and promotion expenses for the company's products, as well
as general economic conditions in the market in which the company does
business, could also impact the realization of such estimates.
