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WHIRLPOOL REPORTS EARNINGS IN LINE WITH EXPECTATIONS; PLANS
FIRST PHASE OF GLOBAL RESTRUCTURING
Benton Harbor, Mich. - Jan. 24, 2001 - Whirlpool Corporation (NYSE: WHR)
today announced fourth quarter and full-year earnings per diluted share of $1.00
and $5.20 respectively, in line with the revised expectations of Dec. 13, 2000.
The company also said that it was finalizing plans for the first phase of its
global restructuring.
"We produced the fourth quarter results in line with previous guidance,"
said Whirlpool Chairman and CEO David R. Whitwam. "2000 was a challenging year.
In the first and second quarters, we set all time company performance records.
Then in the third and fourth quarters, we began to see signs of broader economic
uncertainty, a pronounced industry slowdown in our North American market,
softness in our European market and intense price competition. We have taken
decisive actions to address the challenges.
"We expect that these actions - combined with an unprecedented number of
innovative, higher margin, new-product introductions and improved economic
conditions later this year - will result in a stronger performance for 2001. In
addition, we expect recoveries in the second half in North America and Europe,
along with continued performance improvements in Latin America and another
record-setting year in Asia, will contribute to our performance in 2001."
Fourth-Quarter Earnings and Sales
Fourth-quarter 2000 net earnings were $67 million, down from net earnings
of $113 million in the prior year. Fourth-quarter earnings per diluted share
were $1.00, down 34 percent from $1.51 per diluted share in the prior year.
Fourth-quarter sales of $2.6 billion were down 4 percent from the prior year.
Absent currency translation, quarterly sales would have been down 1 percent.
Whirlpool North America reported lower year-over-year fourth quarter sales
and operating profits as consumer demand slowed and competitive pricing
pressures remained intense. Despite the challenging environment, the company
gained market share in the fourth quarter and for the full year.
Whirlpool Europe, facing slower consumer demand, competitive pricing
pressures, higher material costs and the effects of currency translations,
reported
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lower year-over-year sales and a small operating loss for the fourth quarter.
The company anticipates a return to profitability in the first quarter of 2001
and margin expansion in subsequent quarters.
Whirlpool Latin America reported double digit increases in fourth quarter
operating profit, as well as gains in sales and shipments versus the 1999
period.
Whirlpool Asia reported an all-time record in fourth quarter operating
profit, and posted full-year gains in sales and unit shipments.
Full-Year Earnings and Sales
Full-year 2000 net earnings were $367 million, down from core earnings of
$407 million in the prior year. Full-year 2000 earnings per diluted share of
$5.20 were down 3 percent from core earnings per diluted share of $5.35 in 1999.
Core earnings for 1999 are earnings from continuing operations excluding the
impact of the first-quarter 1999 Brazilian currency devaluation.
Full-year sales were $10.3 billion, down 2 percent from 1999. Absent
currency translation, which lowered sales by about $280 million, full-year sales
would have been up 1 percent. Plans Comprehensive Restructuring
Last month, the company outlined a global restructuring plan that when
fully implemented is expected to result in pre-tax charges of between $300
million and $350 million and an annualized savings of between $225 million and
$250 million.
The plan will enhance Whirlpool's competitiveness and performance, as well
as reinforce its capacity to invest in its brand building strategies. The plan
is expected to eliminate up to 6,000 positions worldwide and will be announced
in phases during the next four quarters.
"We are moving quickly to finalize plans for the first phase of our global
restructuring initiatives," Whitwam said. "We should be prepared within the
next two weeks to announce the specific details of this phase."
The company anticipates that this phase of its restructuring will include
the elimination of slightly more than 2,000 positions worldwide, resulting in a
one- time charge against first-quarter earnings of about $75 million. The
company expects that this phase of the restructuring will result in 2001 savings
of about $35 million, climbing to about $50 million when fully implemented.
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Anticipates Improved Performance in 2001
"Although economic and appliance industry projections are difficult to make
in today's environment, our current outlook does call for more favorable market
conditions in the second half of 2001," said Whitwam. "That outlook, combined
with the implementation of our restructuring program and continued numerous
branded, innovative new product introductions, should make 2001 a year of
performance improvements at Whirlpool."
Whitwam continued: "Our Latin American and Asian operations are expected to
again deliver strong performances throughout 2001. This will help to balance
the challenges we will face in North America and Europe in the first half of
2001 because of uncertainty in the economy, lower levels of consumer demand, and
unfavorable year-over-year comparisons with our record first half results in
2000.
"During the second half of 2001, we expect improved performance in North
America and Europe from the introductions of new, higher margin products and
from higher consumer demand levels driven by a healthier worldwide economy, as
well as by more favorable year-over-year comparisons."
The company expects performance in the first quarter of 2001, excluding
restructuring, to be in-line with fourth quarter 2000 earnings of $1.00 per
diluted share. Margin expansion is expected to enhance profitability in
subsequent quarters.
For the full-year 2001, Whirlpool expects North American appliance industry
unit shipments to be flat versus 2000. The company currently expects European
appliance industry unit shipments to grow 2 percent in 2001, while appliance
industry unit shipments in Latin America and Asia are expected to grow between 5
and 8 percent.
Whitwam noted: "2001 will be a year marked by an historic rate of new
product introductions, including the Whirlpool brand launch of the new Calypso
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Wash motion clothes washer. In the first half of the year we also plan to
launch a new line of energy-efficient Whirlpool brand Conquest refrigerators and
premium KitchenAid brand Pro-Line cooking products."
Whitwam added: "And, as previously announced, we have been selected as the
supplier of Internet-enabled appliances for Playa Vista, the first fully
Internet-connected community in North America. The first phase of Playa Vista
will have more than 3,200 homes. This is indicative of the commitment we have
to offering products that help consumers manage their homes and family lives in
new and creative ways."
He concluded, "This will be a year of challenge and opportunity. We
believe that our strong brands, global platform, innovative products and
consumer focus - combined with our restructuring efforts and the associated
lower cost structure - will produce a strong operational performance and solid
financial results in 2001."
At 9:00 a.m. (EST) today the company will be hosting a conference call,
which can be heard live on the Internet by visiting www.WhirlpoolCorp.com and
clicking on the "Investors" button and then the "Conference Call Audio" menu
item.
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. Additional information about the company can be found on the
Internet at www.WhirlpoolCorp.com.
###
Media Financial
Christopher Wyse Thomas Filstrup
616-923-3417 616-923-3189
christopher j wyse@email.whirlpool.com thomas_ c_filstrup@email.whirlpool.com
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This news release contains forward-looking statements, as that term is defined
in the Private Securities Litigation Reform Act of 1995. In addition to the
expected appliance industry results for 2001 noted in this news release, there
are certain factors that could cause results to differ materially from those
anticipated by some of the statements made. These factors are listed in the
company's most recently filed Form 10-Q and/or Form 10-K.
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
WHIRLPOOL CORPORATION
AS OF DECEMBER 31
(millions of dollars)
2000 1999
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ASSETS
Current Assets
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Cash and equivalents $ 114 $ 261
Trade receivables, less allowances of
(2000: $103; 1999: $124) 1,748 1,477
Inventories 1,119 1,065
Prepaid expenses and other 206 286
Deferred income taxes 50 88
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Total Current Assets 3,237 3,177
Other Assets
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Investment in affiliated companies 113 112
Intangibles, net 762 795
Deferred income taxes 253 247
Other 403 317
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1,531 1,471
Property, Plant and Equipment
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Land 64 70
Buildings 838 863
Machinery and equipment 4,374 4,249
Accumulated depreciation (3,142) (3,004)
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2,134 2,178
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Total Assets $ 6,902 $ 6,826
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2000 1999
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
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Notes payable $ 961 $ 444
Accounts payable 1,257 1,081
Employee compensation 256 300
Accrued expenses 795 803
Restructuring costs 5 39
Current maturities of long-term debt 29 225
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Total Current Liabilities 3,303 2,892
Other Liabilities
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Deferred income taxes 175 157
Postemployment benefits 630 612
Other liabilities 168 168
Long-term debt 795 714
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1,768 1,651
Minority Interests 147 416
Stockholders' Equity
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Common stock 84 84
Paid-in capital 393 374
Retained earnings 2,539 2,268
Unearned restricted stock (11) (6)
Accumulated other comprehensive income (495) (443)
Treasury stock - at cost (826) (410)
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Total Stockholders' Equity 1,684 1,867
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Total Liabilities and Stockholders' Equity $ 6,902 $ 6,826
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CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION
FOR THE PERIOD ENDED DECEMBER 31
(millions of dollars except share and dividend data)
Three Months Ended Full Year
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1999 Pro-forma
2000 1999 2000 1999 "Core" Earnings
------- ------- -------- -------- ---------------
Net sales $ 2,579 $ 2,689 $ 10,325 $ 10,511 $ 10,511
EXPENSES:
Cost of products sold 1,966 1,983 7,838 7,852 7,852
Selling and administrative 440 457 1,651 1,753 1,753
Intangible amortization 7 8 29 31 31
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2,413 2,448 9,518 9,636 9,636
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OPERATING PROFIT 166 241 807 875 875
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (25) (19) (50) (195) (37)
Interest expense (48) (40) (180) (166) (166)
------- ------- -------- -------- ---------------
EARNINGS BEFORE INCOME TAXES
AND OTHER ITEMS 93 182 577 514 672
Income taxes 24 62 200 197 250
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EARNINGS BEFORE EQUITY EARNINGS
AND MINORITY INTERESTS 69 120 377 317 422
Equity in earnings of affiliated companies 1 - 3 (4) (4)
Minority interests (3) (7) (13) 34 (11)
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NET EARNINGS $ 67 $ 113 $ 367 $ 347 $ 407
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Per share of common stock:
Basic net earnings $ 1.01 $ 1.52 $ 5.24 $ 4.61 $ 5.42
Diluted net earnings $ 1.00 $ 1.51 $ 5.20 $ 4.56 $ 5.35
Cash dividends $ .34 $ .34 $ 1.36 $ 1.36 $ 1.36
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Note: 1999 Pro-forma excludes 1st quarter Brazil devaluation.