EXHIBIT (99)- A
KIMBERLY-CLARK REPORTS FOURTH QUARTER 2001 RESULTS
IN LINE WITH EXPECTATIONS
CASH PROVIDED BY OPERATIONS SHOWS CONTINUED STRENGTH
DALLAS, January 24, 2002-Kimberly-Clark Corporation (NYSE: KMB) today reported
that sales for the fourth quarter of 2001 were approximately $3.7 billion, an
increase of 2.0 percent compared with 2000. Excluding currency effects, sales
rose about 3 percent. Diluted net income per share for the fourth quarter was
68 cents in 2001 compared with 85 cents in 2000, a decrease of 20.0 percent.
Fourth quarter earnings before unusual items were 82 cents per share,
down 5.7 percent from 87 cents per share in 2000. As previously announced,
the unusual items in the fourth quarter of 2001 relate primarily to the
streamlining of manufacturing operations in Latin America, including the
shutdown of four small, older plants, as well as the closure of a Technical
Paper mill in the U.S. and the write off of excess manufacturing equipment and
a one-time payment under a contract settlement agreement in North America. In
addition, the company recorded a pretax charge of approximately $17 million
pursuant to an arbitration ruling released on January 21, 2002. The ruling
resolves the first of two disputes related to the closure of the company's
Mobile, Ala., pulp mill in 1999 and the supply of energy to the company's
Mobile tissue mill. A second arbitration ruling is expected at the end of the
month. In total, the company recorded pretax charges of approximately $118
million, equivalent to 14 cents per share, in the fourth quarter of 2001. The
unusual items in 2000 consisted of charges for business integration,
improvement and other programs.
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As expected, the decline in earnings per share before unusual items was
due primarily to lower sales and earnings for the company's operations in
Argentina and Brazil and for most of the company's business-to-business
operations in North America in the face of difficult economic conditions. The
weakness in Argentina and Brazil was the main reason for lower operating
profit in the company's personal care business. Meanwhile, the company's
consumer tissue business posted solid improvements in sales and operating
profit before unusual items despite continued competitive market conditions.
Health care sales and operating profit increased again in the fourth quarter,
capping a strong year. During the quarter, the company also incurred start-up
costs equivalent to approximately 2 cents per share to support the rollout of
new and improved products. These investments are intended to drive future
growth.
Cash provided by operations rose approximately 19 percent in the
fourth quarter on a comparable basis with 2000, adjusting for differences
in the timing of income tax payments. For the full year, cash provided by
operations was $2.3 billion in 2001, approximately 6 percent greater than in
the prior year. During the quarter, the company repurchased 5.9 million
shares of common stock at a cost of $338 million. Kimberly-Clark invested a
total of $900 million in 2001 to repurchase 15.0 million shares, or nearly 3
percent of the shares outstanding at the beginning of the year.
The net impact of currency and energy costs on the company's earnings in
the fourth quarter of 2001 was minimal, marking a significant improvement
versus the first nine months of the year when those factors penalized earnings
by an unprecedented 19 cents per share.
REVIEW OF FOURTH QUARTER SALES BY SEGMENT
Sales of $3.7 billion for the fourth quarter were up 2.0 percent compared
with 2000. Excluding currency effects, sales increased about 3 percent,
driven mainly by higher sales of consumer tissue products. Overall sales
volumes were approximately 4 percent higher while selling prices were about 1
percent lower. Sales in the fourth quarter of 2001 included approximately
$125 million as a result of the
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company's acquisition in July 2001 of an additional 5 percent of
Kimberly-Clark Australia Pty. Limited (KCA), bringing K-C's ownership of the
former equity affiliate to 55 percent. Effective July 1, the company began
consolidating KCA's net sales and operating results.
Consumer tissue sales climbed 6.6 percent compared with the fourth
quarter of 2000, with gains in all major regions of the world. Sales volumes
were up 5 percent and selling prices were approximately 1 percent higher,
mainly due to increases implemented in North America and Europe over the past
year. Product mix improvements also contributed to the increase. Sales were
up sharply in Europe, driven by market share gains for Andrex and Scottex
bathroom tissue, and also in Asia, as a result of the consolidation of KCA.
The increase in Latin America was highlighted by double-digit growth in the
Andean region due to new and improved products. In North America, sales of
consumer tissue products rose 2 percent, led by higher sales of improved Scott
paper towels and Huggies baby wipes.
Sales of personal care products rose almost 1 percent compared with the
fourth quarter of 2000 despite a decline in sales in Argentina and Brazil in
excess of 30 percent. Global sales were up more than 2 percent before
currency effects on a 5 percent rise in sales volumes, partially offset by a
shift in product mix, primarily in Latin America. Selling prices were slightly
lower. The volume gains were highlighted by continued double-digit growth in
sales volumes of Huggies diapers in Europe and a strong increase in Asia due to
the consolidation of KCA. In North America, sales volumes of Pull-Ups training
pants, GoodNites youth pants and Depend and Poise adult incontinence products
registered solid improvement, but sales volumes of Huggies diapers were down
compared with all-time record levels in the fourth quarter of 2000.
Sales of business-to-business products declined 4.1 percent. Overall
volumes were flat and selling prices were nearly 4 percent lower. Sales of
health care products continued to improve, boosted by sales volume growth
of 7 percent. Meanwhile, sales of K-C Professional's away-from-home products
in North America were more than
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7 percent lower, as further slowing in the economy since September
caused market demand to soften.
OTHER FOURTH QUARTER OPERATING RESULTS
Operating profit in the fourth quarter of 2001 was $514.0 million, 23.8
percent lower than the prior year. Excluding unusual items, operating profit
declined 8.5 percent to $632.1 million in the fourth quarter of 2001 compared
with $690.7 million in 2000. The decline was due primarily to difficult
business conditions affecting the company's operations in Latin America and
its business-to-business operations in North America, as noted above. In
addition, the fourth quarter included costs of about $13 million related to
start-up of new tissue machines and the company's Cottonelle Fresh rollwipes
operations. Lower fiber costs of approximately $75 million were more than
offset by a step-up in advertising and promotion expenses for both new product
introductions and increased levels of competitive activity.
Other income and expense in the fourth quarter of 2001 includes a charge
of approximately 3 cents per share related to sales tax credits in Latin
America partially offset by foreign currency gains from Australian dollar
forward contracts equivalent to nearly 2 cents per share. As previously
announced, the forward contracts relate to the anticipated acquisition of the
remaining 45 percent ownership interest in Kimberly-Clark Australia. In
addition, there was a net gain on the devaluation of the Argentine peso of
about 1 cent per share in the fourth quarter, as the company's consolidated
operation in Argentina recorded a gain that was partially offset by a loss at
the company's equity affiliate in that country.
Kimberly-Clark's share of net income of equity companies in the fourth
quarter decreased in 2001 due primarily to lower net income at Klabin Kimberly
S.A. in Brazil, as well as the consolidation of Kimberly-Clark Australia and
above-mentioned devaluation loss at the company's equity affiliate in
Argentina. These reductions offset improved results at Kimberly-Clark de
Mexico, S.A. de C.V., which benefited from continued strong operating profit
margin and an increase in the value of the Mexican peso.
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FULL YEAR RESULTS
For the full year of 2001, sales of $14.5 billion were up 3.9 percent
from $14.0 billion in the prior year. Excluding currency effects, sales were
more than 6 percent higher. Operating profit declined 10.2 percent to $2,364.8
million in 2001 versus $2,633.8
million in 2000. However, before unusual items, year-to-date operating profit
decreased 3.1 percent to $2,551.1 million from $2,632.7 million in 2000.
Diluted earnings per share for 2001 were $3.05 versus $3.31 in 2000, a decline
of 7.9 percent. Earnings per share before unusual items were $3.27 in 2001
compared with $3.32 in 2000, a decline of 1.5 percent.
Wayne R. Sanders, chairman and chief executive officer of Kimberly-Clark,
said, "In 2001, Kimberly-Clark faced the most difficult business environment
in recent memory. While everyone at K-C is disappointed with our performance
last year, we are confident that we have been doing the right things to drive
profitable growth going forward. Comprehensive marketing programs will
continue to drive volume growth for our consumer products. While the outlook
for improvement in Argentina and Brazil remains uncertain, we should benefit
from improved market conditions for our business-to-business operations in
North America as the economy recovers. We're building competitive advantage
to grow the top- and bottom-lines, and we're focused on increasing cash flow
to help fund our growth."
CONFERENCE CALL
A conference call to discuss this news release and other matters of
interest to investors and analysts will be held at 9:00 a.m. (CST) today. The
conference call will be simultaneously broadcast over the World Wide Web.
Stockholders and others are invited to listen to the live broadcast or a
playback, which can be accessed by following the instructions set out in the
Investors section of the company's Web site (www.kimberly-clark.com).
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Kimberly-Clark Corporation is a leading consumer products company. Its
global personal care, tissue and health care brands include Huggies, Pull-Ups,
Kotex, Depend, Kleenex, Scott, Kimwipes,
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Kimberly-Clark, WypAll, Safeskin and Tecnol. Other brands well known outside
the U.S. include Andrex, Scottex, Page, Popee and Kimbies. Kimberly-Clark
also is a major producer of premium business, correspondence and technical
papers. The company has manufacturing operations in 41 countries and sells
its products in more than 150 countries.
Certain matters contained in this news release concerning the business
outlook, including new product introductions, cost savings and acquisitions,
anticipated financial and operating results, strategies, contingencies and
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 future events
will occur as anticipated or that the company's results will be as estimated.
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, 2000 entitled "Factors That May
Affect Future Results."
Kimberly-Clark Web site: www.kimberly-clark.com
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KIMBERLY-CLARK CORPORATION
PERIOD ENDED DECEMBER 31
(Millions, except per share amounts)
EARNINGS SUMMARY:
Fourth Quarter Twelve Months
Ended December 31 Ended December 31
------------------------ ------------------------
2001 2000 Change 2001 2000 Change
---- ---- ------ ---- ---- ------
<s> <c> <c> <c> <c> <c> <c>
Diluted Earnings Per Share
Before Unusual Items . . . . . . . . . . . $ .82 $ .87 - 5.7% $ 3.27 $ 3.32 -1.5%
(Charges) Credits for
Unusual Items:
North American Mill
Closing and Other
Write-offs . . . . . . . . . . . . . . . (.06) - (.06) -
Latin American Asset
Plan . . . . . . . . . . . . . . . . . . (.04) - (.04) -
Arbitration Settlement . . . . . . . . . . (.02) - (.02) -
Business Integration
and Other Costs. . . . . . . . . . . . . (.01) (.01) (.04) (.04)
Business Improvement
Programs . . . . . . . . . . . . . . . . (.01) (.01) (.06) (.03)
Litigation Settlements
and Other. . . . . . . . . . . . . . . . - - - .06
-------- -------- -------- --------
Diluted Net Income
Per Share. . . . . . . . . . . . . . . . . $ .68 $ .85 -20.0% $ 3.05 $ 3.31 -7.9%
========= ========= ========= ========
Net Income . . . . . . . . . . . . . . . . . $ 358.3 $ 455.7 -21.4% $1,626.5 $1,800.6 -9.7%
========= ========= ========= ========
Earnings Before
Unusual Items. . . . . . . . . . . . . . . $ 430.3 $ 467.0 - 7.9% $1,742.2 $1,802.8 -3.4%
========= ========= ========= ========
Average Diluted Common
Shares Outstanding . . . . . . . . . . . . 527.0 538.5 533.2 543.8
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OTHER INFORMATION:
TWELVE MONTHS ENDED DECEMBER 31. . . . . . . 2001 2000 Change
--------- --------- -------
Cash Dividends Declared Per Share. . . . . . $ 1.12 $ 1.08 + 3.7%
Capital Spending . . . . . . . . . . . . . . 1,099.5 1,170.3 - 6.0%
Net Income Return on Average Stockholders'
Equity . . . . . . . . . . . . . . . . . . 28.5% 33.2% -14.2%
AS OF DECEMBER 31
Net Debt and Preferred Securities to Capital 38.9% 35.2% +10.5%
Number of Common Shares Outstanding. . . . . 521.0 533.4
Unaudited
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KIMBERLY-CLARK CORPORATION
FOURTH QUARTER ENDED DECEMBER 31
(Millions, except per share amounts)
2001 2000 Change
---- ---- ------
<s> <c> <c> <c>
Net Sales . . . . . . . . . . . $3,671.8 $3,600.8 + 2.0%
Cost of products sold . . . . 2,199.0 2,117.4 + 3.9%
-------- --------
Gross Profit. . . . . . . . . . 1,472.8 1,483.4 - 0.7%
Advertising, promotion
and selling expenses. . . . 610.7 521.3 + 17.1%
Research expense. . . . . . . 79.5 80.4 - 1.1%
General expense . . . . . . . 216.7 201.6 + 7.5%
Goodwill amortization . . . . 22.4 21.1 + 6.2%
Other (income) expense, net . 29.5 (15.7) N.M.
-------- --------
Operating Profit. . . . . . . . 514.0 674.7 - 23.8%
Interest income . . . . . . . 5.0 4.6 + 8.7%
Interest expense. . . . . . . (46.2) (59.6) - 22.5%
-------- --------
Income Before Income Taxes. . . 472.8 619.7 - 23.7%
Provision for income taxes. . 142.8 192.4 - 25.8%
-------- --------
Income Before Equity Interests. 330.0 427.3 - 22.8%
Share of net income of equity
companies . . . . . . . . . 32.1 45.3 - 29.1%
Minority owners' share of
subsidiaries' net income. . (3.8) (16.9) - 77.5%
-------- --------
Net Income. . . . . . . . . . . $ 358.3 $ 455.7 - 21.4%
======== ========
Net Income Per Share - Diluted. $ .68 $ .85 - 20.0%
======== ========
Notes:
1. In 2001, charges (credits) for unusual items are included as follows:
cost of products sold - $90.9 million; advertising, promotion and selling
expenses - $3.1 million; research expense - $.4 million; general expense -
$5.3 million; other (income) expense, net - $18.4 million; share of net
income of equity companies - $.3 million; and minority owners' share of
subsidiaries' net income - (6.7) million.
2. In 2000, charges for unusual items are included as follows: cost of
products sold - $7.0 million; advertising, promotion and selling
expenses - $3.7 million; research expense - $.4 million; general
expense - $4.3 million; and other (income) expense, net - $.6 million.
N.M.-Not meaningful
Unaudited
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KIMBERLY-CLARK CORPORATION
TWELVE MONTHS ENDED DECEMBER 31
(Millions, except per share amounts)
2001 2000 Change
---- ---- ------
<s> <c> <c> <c>
Net Sales . . . . . . . . . . . $14,524.4 $13,982.0 + 3.9%
Cost of products sold . . . . 8,615.5 8,228.5 + 4.7%
--------- ---------
Gross Profit. . . . . . . . . . 5,908.9 5,753.5 + 2.7%
Advertising, promotion
and selling expenses. . . . 2,334.4 2,122.7 + 10.0%
Research expense. . . . . . . 295.3 277.4 + 6.5%
General expense . . . . . . . 767.9 742.1 + 3.5%
Goodwill amortization . . . . 89.4 81.7 + 9.4%
Other (income) expense, net . 57.1 (104.2) N.M.
--------- ---------
Operating Profit. . . . . . . . 2,364.8 2,633.8 - 10.2%
Interest income . . . . . . . 17.8 24.0 - 25.8%
Interest expense. . . . . . . (191.6) (221.8) - 13.6%
--------- ---------
Income Before Income Taxes. . . 2,191.0 2,436.0 - 10.1%
Provision for income taxes. . 655.7 758.5 - 13.6%
--------- ---------
Income Before Equity Interests. 1,535.3 1,677.5 - 8.5%
Share of net income of equity
companies . . . . . . . . . 154.4 186.4 - 17.2%
Minority owners' share of
subsidiaries' net income. . (63.2) (63.3) - 0.2%
--------- ---------
Net Income. . . . . . . . . . . $ 1,626.5 $ 1,800.6 - 9.7%
========= =========
Net Income Per Share - Diluted. $ 3.05 $ 3.31 - 7.9%
========= =========
Notes:
1. In 2001, charges (credits) for unusual items are included as follows:
cost of products sold - $141.7 million; advertising, promotion and selling
expenses - $5.8 million; research expense - $.4 million; general expense -
$19.5 million; other (income) expense, net - $18.9 million; share of net
income of equity companies - $.1 million; and minority owners' share of
subsidiaries' net income - $(6.7) million.
2. In 2000, charges (credits) for unusual items are included as follows:
cost of products sold - $30.3 million; advertising, promotion and selling
expenses - $9.2 million; research expense - $.5 million; general expense -
$19.5 million; and other (income) expense, net - $(60.6) million.
N.M.-Not meaningful
Unaudited
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KIMBERLY-CLARK CORPORATION
SELECTED BUSINESS SEGMENT DATA
PERIOD ENDED DECEMBER 31
(Millions)
The following Selected Business Segment Data reflects the newly defined
business segments of the company as a result of recent organizational changes.
The new business segments are Personal Care, Consumer Tissue and
Business-to-Business.
The reclassifications of historical financial information are consistent with
the company's announcement during a November 30, 2001 web-casted conference
call. Sales and operating profit of K-C Professional and Neenah Paper have
been removed from the former Tissue segment and included in the new
Business-to-Business segment along with the company's Health Care, Nonwovens
and Technical Paper operations that formerly constituted the Health Care and
Other segment. The now smaller Tissue segment has been renamed Consumer
Tissue. The Personal Care segment has not changed.
Fourth Quarter Twelve Months
Ended December 31 Ended December 31
--------------------------- ---------------------------
2001 2000 Change 2001 2000 Change
---- ---- ------ ---- ---- ------
NET SALES:
<s> <c> <c> <c> <c> <c> <c>
Personal Care . . . . $1,413.2 $1,403.6 + 0.7% $ 5,677.6 $ 5,437.6 + 4.4%
Consumer Tissue . . . 1,403.8 1,316.3 + 6.6% 5,383.5 5,061.3 + 6.4%
Business-to-
Business. . . . . . 892.4 930.1 - 4.1% 3,624.8 3,678.9 - 1.5%
Intersegment
Sales . . . . . . . (37.6) (49.2) N.M. (161.5) (195.8) N.M.
-------- -------- --------- ---------
Consolidated. . . . . $3,671.8 $3,600.8 + 2.0% $14,524.4 $13,982.0 + 3.9%
======== ======== ========= =========
OPERATING PROFIT (a):
Personal Care . . . . $ 225.8 $299.8 -24.7% $ 1,042.7 $1,136.7 - 8.3%
Consumer Tissue . . . 214.4 220.0 - 2.5% 863.7 825.1 + 4.7%
Business-to-
Business. . . . . . 130.0 173.0 -24.9% 599.4 666.0 -10.0%
Unallocated
items - net . . . . (56.2) (18.1) N.M. (141.0) 6.0 N.M.
-------- -------- --------- ---------
Consolidated. . . . . $ 514.0 $ 674.7 -23.8% $ 2,364.8 $ 2,633.8 -10.2%
======== ======== ========= =========
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(a) Operating profit includes charges (credits) for unusual items as follows:
Fourth Quarter Twelve Months
Ended December 31 Ended December 31
----------------- -----------------
2001 2000 2001 2000
---- ---- ---- ----
<s> <c> <c> <c> <c>
Personal Care . . . . . . . $ 32.5 $ .3 $ 76.8 $ 5.2
Consumer Tissue . . . . . . 33.1 5.6 39.2 22.0
Business-to-Business. . . . 34.1 9.5 51.4 32.3
Unallocated items - net . . 18.4 .6 18.9 (60.6)
------ ----- ------ -------
Consolidated. . . . . . . . $118.1 $16.0 $186.3 $ (1.1)
====== ===== ====== ======
Description of Business Segments
The Personal Care segment manufactures and markets disposable diapers,
training and youth pants and swimpants; feminine and incontinence care
products; and related products. Products in this segment are primarily for
household use and are sold under a variety of well-known brand names,
including Huggies, Pull-Ups, Little Swimmers, GoodNites, Kotex, Lightdays,
Depend, Poise and other brand names.
The Consumer Tissue segment manufactures and markets facial and bathroom
tissue, paper towels and napkins for household use; wet wipes; and related
products. Products in this segment are sold under the Kleenex, Scott, Kleenex
Cottonelle, Kleenex Viva, Andrex, Scottex, Page, Huggies, and other brand
names.
The Business-to-Business segment manufactures and markets facial and bathroom
tissue, paper towels, wipers and napkins for away from home use, health care
products such as surgical gowns, drapes, infection control products,
sterilization wraps, disposable face masks and exam gloves, respiratory
products, and other disposable medical products; printing, premium business
and correspondence papers; specialty and technical papers; and other products.
Products in this segment are sold under the Kimberly-Clark, Kleenex, Scott,
Kimwipes, WypAll, Surpass, Safeskin, Tecnol, Ballard and other brand names.
N.M.-Not meaningful
Unaudited
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