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: OCTOBER 21, 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)
_____________________________________
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Item 5. Other Events
Attached hereto as Exhibit 99 is a Press Release issued by Kimberly-Clark
Corporation on October 21, 1997 reporting earnings for the third quarter of
1997.
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: October 30, 1997 By:/s/ Randy J. Vest
Randy J. Vest
Vice President and
Controller
EXHIBIT INDEX
(99) Press Release issued by Kimberly-Clark Corporation on October 21,
1997 reporting earnings for the third quarter of 1997.
Tina S. Barry
(972) 281-1484
KIMBERLY-CLARK REPORTS THIRD QUARTER EARNINGS
Earnings Were 57 Cents Per Share in 1997 Compared to 62 Cents Per Share in
1996, Excluding Nonoperating Items
DALLAS, October 21, 1997 _ Kimberly-Clark Corporation (NYSE: KMB) today
reported third quarter 1997 net income of $316.0 million, or 57 cents per
share. The per share earnings declined 8.1 percent from earnings from
operations of 62 cents per share in last year's third quarter. Reported
earnings in the third quarter of 1996, including nonoperating gains, were
67 cents per share.
Sales of $3.1 billion for the third quarter were 5.5 percent lower
than in 1996; however, excluding the revenues from businesses sold during
1996 to meet the regulatory requirements of the company's merger with Scott
Paper Company and from other businesses divested in 1997, sales were up
approximately 1 percent. Sales for the quarter reflect an increase in
worldwide sales volumes of 4 percent excluding divested businesses. The
strengthening of the U.S. dollar and devaluations of certain Asian
currencies negatively affected sales by approximately 3 percent and reduced
earnings by approximately 2 cents per share.
Excluding divested businesses, sales of personal care products in the
third quarter rose 6 percent from last year, driven by an increase in sales
volumes of 10 percent. Personal care sales volumes were higher in every
region, with continuing strong growth in Europe and Latin America.
Third quarter sales of tissue-based products excluding divested
businesses were nearly 4 percent lower than in 1996, primarily because of
changes in foreign currency exchange rates. On a worldwide basis, sales
volumes and selling prices were virtually even with last year's levels. In
North America, sales volumes of consumer tissue products were down about 2
percent from 1996, while sales volumes of away-from-home products increased
by 9 percent. As a result of intensified competition, sales volumes of
tissue-based products in Europe were down 4 percent compared to the third
quarter of 1996, and selling prices averaged approximately 2 percent lower.
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Third quarter operating profit of $466.5 million was 14.5 percent
lower than in 1996. The company's operating margin was 15.1 percent of
sales compared to 16.7 percent in last year's third quarter. Excluding
the divested businesses, operating profit for the quarter declined about 10
percent.
Wayne R. Sanders, chairman and chief executive officer, said: "Our
personal care businesses continued to perform very well in the third
quarter, and our strong cash flow resulted in lower interest expense.
However, these improvements were not sufficient to overcome the effects of
heightened competition in European tissue markets, the loss of earnings of
divested businesses, adverse currency impacts and lower earnings in our
away-from-home business in North America."
The decrease in third quarter operating profit was attributable mainly
to the impact of competitive conditions on the company's tissue businesses
in Europe and the loss of earnings of the divested businesses. Operating
profit also was adversely affected by strategic changes related to the
combination of Kimberly-Clark's and Scott Paper Company's away-from-home
businesses in North America, which will improve the ongoing profitability
of this business. These strategies are now reaching full implementation;
in the third quarter, as noted above, sales volumes increased 9 percent in
this business as compared to a decrease of 4 percent in the first half of
the year. To date, however, the transition has resulted in higher costs
and a negative impact on operating profit in the third quarter of 1997
equivalent to approximately 2 cents per share.
Interest expense for the quarter declined $8.0 million from 1996, due
primarily to a reduction in the average level of debt. However, as a
result of borrowings during this year's third quarter to fund common stock
repurchases, total debt was approximately $2.4 billion at the end of the
third quarter of 1997, compared to $2.2 billion at the end of the third
quarter of 1996 and $2.3 billion at year-end 1996. The company's debt to
capital ratio at the end of the third quarter of 1997 was 34.8 percent.
The company repurchased 8.9 million shares of common stock during the
third quarter. Year-to-date, 14.5 million shares have been repurchased at
a cost of $724 million. The board of directors recently authorized the
repurchase of an additional 20 million shares of common stock, of which the
remaining authority is currently 18.9 million shares.
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Kimberly-Clark's share of net income of equity companies in the third
quarter was $39.1 million in 1997 and $38.0 million in 1996. Net income of
Kimberly-Clark de Mexico, S.A. de C.V. was slightly higher, as its sales
and earnings have begun to recover from the effects of adverse economic
conditions in Mexico over the last two years.
For the first nine months of 1997, sales of $9.5 billion were down 3.7
percent from $9.8 billion last year. Excluding the sales of the divested
businesses in both years, however, sales increased approximately 1 percent.
Operating profit decreased 1.4 percent to $1,505.2 million in 1997 from
$1,527.3 million in 1996, but was nearly 5 percent greater excluding the
operating profit of the divested businesses. Earnings per share were $1.88
in 1997 versus $1.87 in 1996. Excluding extraordinary gains in 1997 and
other nonoperating items in both years, earnings per share from operations
were $1.82 in 1997 compared to $1.74 in 1996, an increase of 4.6 percent.
Commenting on the company's 1997 earnings, Mr. Sanders said, "While we
have made progress toward our long-term goals in a number of areas, our
overall financial performance this year is not acceptable. We incurred
significant costs to implement strategic changes in our away-from-home
business in North America and have not sufficiently offset the effects of
heightened competition in Europe and continued low selling prices for our
products elsewhere around the world. However, we are taking aggressive
steps to ensure our results will improve from this point forward. Our focus
on profitable growth and cost reductions in our away-from-home business is
beginning to pay off, and I am encouraged by the recovery in sales and
earnings at Kimberly-Clark de Mexico.
"Before the end of the year, we will finalize and announce plans for
further, significant cost reductions in our worldwide operations. Our
plans will be designed to increase operating efficiencies, focus on
advantaged technologies and create a world-class cost and distribution
structure to support our growth through the year 2000 and beyond."
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A Fortune 100 company, Kimberly-Clark is celebrating its 125th
anniversary in 1997. The company 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 36 countries and sells its products in more than 150
countries.
Certain matters contained in this news release concerning the business
outlook, anticipated financial and operating 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. For a description of certain factors that could
cause the company's future results to differ materially from those
expressed in any such forward-looking statements, see the section of Part
I, Item 1 of the company's Annual Report on Form 10-K for the year ended
December 31, 1996 entitled "Factors That May Affect Future Results."
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<TABLE>
<CAPTION>
KIMBERLY-CLARK CORPORATION
THIRD QUARTER ENDED SEPTEMBER 30
(Millions except per share amounts)
1997 1996 Change
<S> <C> <C> <C>
Net Sales $ 3,095.3 $ 3,275.7 - 5.5%
Cost of products sold 1,937.0 2,019.7 - 4.1%
Gross Profit 1,158.3 1,256.0 - 7.8%
Advertising, promotion and selling
expenses 482.0 501.9 - 4.0%
Research expense 51.0 50.0 + 2.0%
General expense 158.8 158.3 + 0.3%
Operating Profit 466.5 545.8 - 14.5%
Interest income 5.9 5.9 --
Interest expense (35.0) (43.0) - 18.6%
Other income (expense), net (14.5) 34.0 N.M.
Income Before Income Taxes 422.9 542.7 - 22.1%
Provision for income taxes 139.5 189.9 - 26.5%
Income Before Equity Interests 283.4 352.8 - 19.7%
Share of net income of
equity companies 39.1 38.0 + 2.9%
Minority owners' share of
subsidiaries' net income (6.5) (13.6) - 52.2%
Net Income $ 316.0 $ 377.2 - 16.2%
Net Income Per Share $ .57 $ .67 - 14.9%
</TABLE>
See Notes to Financial Summaries
N.M.-Not meaningful
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<TABLE>
<CAPTION>
KIMBERLY-CLARK CORPORATION
NINE MONTHS ENDED SEPTEMBER 30
(Millions except per share amounts)
1997 1996 Change
<S> <S> <C> <C>
Net Sales $ 9,457.2 $ 9,825.5 - 3.7%
Cost of products sold 5,865.7 6,147.1 - 4.6%
Gross Profit 3,591.5 3,678.4 - 2.4%
Advertising, promotion and selling
expenses 1,465.8 1,567.2 - 6.5%
Research expense 150.0 147.0 + 2.0%
General expense 470.5 436.9 + 7.7%
Operating Profit 1,505.2 1,527.3 - 1.4%
Interest income 24.5 20.6 + 18.9%
Interest expense (118.3) (145.1) - 18.5%
Other income (expense), net (4.9) 106.4 N.M.
Income Before Income Taxes 1,406.5 1,509.2 - 6.8%
Provision for income taxes 464.1 528.2 - 12.1%
Income Before Equity Interests 942.4 981.0 - 3.9%
Share of net income of
equity companies 122.8 110.8 + 10.8%
Minority owners' share of
subsidiaries' net income (34.2) (35.1) - 2.6%
Income Before Extraordinary Gains 1,031.0 1,056.7 - 2.4%
Extraordinary gains, net of
income taxes 17.5 - N.M.
Net Income $ 1,048.5 $ 1,056.7 - 0.8%
Per Share Basis:
Income before extraordinary gains $ 1.85 $ 1.87 - 1.1%
Extraordinary gains, net of
income taxes .03 - N.M.
Net Income $ 1.88 $ 1.87 + 0.5%
</TABLE>
See Notes to Financial Summaries
N.M.-Not meaningful
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<TABLE>
<CAPTION>
KIMBERLY-CLARK CORPORATION
THIRD QUARTER ENDED SEPTEMBER 30
(Millions except per share amounts)
1997 1996 Change
<S> <C> <C> <C>
NINE MONTHS ENDED SEPTEMBER 30
Cash Dividends Declared Per Share $ .72 $ .69 + 4.3
Capital Spending 692.6 557.3 + 24.3
TWELVE MONTHS ENDED SEPTEMBER 30
Net Income Return on Average
Stockholders' Equity 32.5% 28.5%* + 14.0
Operating Profit Return on Average
Assets 18.9% 16.5%* + 14.5
</TABLE>
*Excluding restructuring and other unusual charges.
See Notes to Financial Summaries
Unaudited
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KIMBERLY-CLARK CORPORATION
NOTES TO FINANCIAL SUMMARIES
(1)Share of net income of equity companies for the nine months ended
September 30, 1997 includes a net nonoperating gain of $16.3 million, or
$.03 per share, primarily related to the sale of a portion of the tissue
business of Kimberly-Clark de Mexico, S.A. de C.V. ("KCM"). The sale was
required by the Mexican regulatory authorities following the 1996 merger
of KCM and Scott Paper Company's ("Scott") former Mexican affiliate.
(2)In June 1997, the Corporation sold Scott Paper Limited, a 50.1 percent-
owned Canadian tissue subsidiary, and in March 1997, it sold its Coosa
Pines, Alabama, newsprint and pulp manufacturing mill, together with
related woodlands. Also in March, the Corporation recorded impairment
losses on the planned sales of a pulp manufacturing mill in Miranda,
Spain; a recycled fiber facility in Oconto Falls, Wisconsin; and a tissue
converting facility in Yucca, Arizona; and on an integrated pulp making
facility in Everett, Washington. These transactions were aggregated and
reported as extraordinary gains totaling $17.5 million, or $.03 per share,
for the nine months ended September 30, 1997.
(3)Other income (expense), net in 1996 includes the following gains related
to sales of businesses and assets to meet regulatory requirements for the
1995 merger of Kimberly-Clark and Scott and the sale of the Corporation's
remaining 20 percent interest in Midwest Express.
Third Quarter Nine Months
Ended Ended
($ Millions, except per share September 30, 1996 September 30, 1996
Certain U.K. tissue businesses,
a tissue mill in Prudhoe,
England and Lakeview tissue
mill in Neenah, Wisconsin $ 23.0 $ 23.0
Scott baby wipes and facial
tissue business in the U.S.
and Midwest Express - 70.0
Total $ 23.0 $ 93.0
Effect on net income per share $ 0.05 $ 0.13
(4)The average number of common shares outstanding for the nine months ended
September 30, 1997 and 1996 was 557.8 million and 564.0 million,
respectively. The number of common shares outstanding as of September 30,
1997 and 1996 was 550.6 million and 564.6 million, respectively.
Unaudited
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<TABLE>
<CAPTION>
KIMBERLY-CLARK CORPORATION
SELECTED PRODUCT SEGMENT DATA
(millions)
Third Quarter Nine Months
Ended September 30 Ended September 30
1997 1996 Change 1997 1996 Change
NET SALES:
<S> <C> <C> <C> <C> <C> <C>
Personal Care Products $1,328.9 $1,260.9 + 5.4% $3,916.7 $3,601.9 + 8.7%
Tissue-Based Products 1,599.1 1,801.0 -11.2% 4,997.1 5,540.7 - 9.8%
Newsprint, Paper and
Other 179.8 237.7 -24.4% 581.1 742.9 -21.8%
Intersegment Sales (12.5) (23.9) N.M. (37.7) (60.0) N.M.
Consolidated $3,095.3 $3,275.7 - 5.5% $9,457.2 $9,825.5 - 3.7%
OPERATING PROFIT:
Personal Care Products $ 232.6 $ 213.9 + 8.7% $ 732.7 $ 578.5 +26.7%
Tissue-Based Products 202.3 296.0 -31.7% 662.9 818.6 -19.0%
Newsprint, Paper and
Other 43.3 53.0 -18.3% 128.0 170.5 -24.9%
Unallocated Items-net (11.7) (17.1) N.M. (18.4) (40.3) N.M.
Consolidated $ 466.5 $ 545.8 -14.5% $1,505.2 $1,527.3 - 1.4%
</TABLE>
Description of Product Segments
Personal Care Products includes infant, child, feminine and
incontinence care products: wet wipes; health care products; and
related products.
Tissue-Based Products includes tissue and wipers for household and
away-from-home use; pulp; and related products.
Newsprint, Paper and Other includes newsprint, printing papers,
premium business and correspondence papers, specialty papers,
technical papers, and related products; and other products and
services.
N.M.-Not meaningful
Unaudited
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