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Whirlpool Corporation
CONTACT: Whirlpool Corporation
Media: Tom Kline, 616/923-3738
thomas_e_kline@email.whirlpool.com
Financial: Thomas Filstrup, 616/923-3189
thomas_c_filstrup@email.whirlpool.com
WHIRLPOOL CORPORATION REPORTS FIRST QUARTER EARNINGS
-- Core EPS Up 10% from Fourth Qtr. 2000 Despite Industry Weakness --
BENTON HARBOR, Mich., April 18, 2001--Whirlpool Corporation (NYSE:WHR) today
reported first quarter core earnings of $1.10 per diluted share, despite a
difficult industry environment in North America and Europe.
"Our performance throughout this challenging period for the industry
underscores the strength of Whirlpool's global platform, high-value brands and
our focus on productivity," said David R. Whitwam, chairman and chief executive
officer. "Although we are cautious about the economic picture for the remainder
of 2001, we continue to expect a better second half for the industry in North
America and Europe, as well as solid improvement in our operating performance."
First quarter core earnings--which exclude restructuring and related
charges, and a one-time gain relating to the adoption of SFAS No. 133--were $73
million, or $1.10 per diluted share, compared to $112 million, or $1.52 per
diluted share in first quarter 2000. The prior year period was a record first
quarter for the company during the far-more-favorable industry environment of
early 2000.
Compared to fourth quarter 2000, first quarter 2001 core earnings were
up 10 percent.
Net earnings for the current quarter--including restructuring and
related charges of $40 million, after tax and minority interest, and a one-time
gain of $8 million, after tax, relating to the adoption of SFAS No. 133--were
$41 million, or $0.61 per diluted share.
--more--
PAGE 2/WHIRLPOOL CORPORATION REPORTS FIRST QUARTER EARNINGS
First quarter 2001 net sales of $2.5 billion were down approximately 3
percent from first quarter 2000. Absent currency translations of $71 million,
net sales were essentially flat with the prior year period.
"Based on our current forecasts for the global economy and regional
industries, as well as the record number of new product introductions from
Whirlpool this year, we continue to believe that we will deliver record core
operating results for 2001," Whitwam noted. "As indicated previously, we expect
our full-year core earnings to improve 15 percent over 2000 levels, with
sequential improvement quarter by quarter throughout the year."
North America
Whirlpool North America first quarter net sales and core operating
profit were down from the prior year record quarter. Revenues for the quarter
declined 1.2 percent, despite an overall industry decline of 10.5 percent in
appliance industry unit shipments. Compared to fourth quarter 2000, operating
margins improved by 1.8 percentage points in the first quarter 2001.
North America performance was driven by consumer preference for
Whirlpool manufactured products, as well as by the strength of the company's
value-added distribution strategy.
Whirlpool North America will introduce a record number of products in
2001. In the second quarter, the Whirlpool brand will launch the new Calypso
wash motion clothes washer and the latest line of Conquest energy-efficient
refrigerators. Later in the year, the KitchenAid brand will launch its new
high-end Pro-Line of cooking products.
The company currently anticipates continuing challenges for the
appliance industry in 2001, but expects year-over-year comparisons to improve
during the second half of the year.
--more--
PAGE 3/WHIRLPOOL CORPORATION REPORTS FIRST QUARTER EARNINGS
For the full year, appliance industry unit shipments in North America
are currently expected to be down 2 percent versus 2000. Based on the current
industry outlook, the company expects its record number of new product
introductions and productivity gains to drive North America full-year
performance to record levels in 2001.
Europe
During the quarter, a combination of factors--including slowing
appliance industry unit shipments, continuing pricing pressure and the effects
of currency translation--led to unfavorable comparisons of sales and core
operating profit with the prior year period. Excluding currency translations,
net sales were down 3 percent year over year. Operating margins for the quarter
were 2.1 percentage points higher than fourth quarter 2000.
For the full year, the company currently anticipates a 2 percent
increase in appliance industry unit shipments. Based on the current industry
outlook for Europe, the company expects ongoing productivity improvements and
high-value new product introductions under the Whirlpool and Bauknecht brands to
drive operating margin expansion quarter by quarter in 2001.
Latin America
Whirlpool Latin America performance was in line with the company's
expectations for the quarter. Excluding currency translations, net sales were up
5 percent compared to the prior year period.
First quarter net sales and core operating profit continue to be
positively affected by Befiex, a Brazilian export tax credit program that
effectively allows the company to reduce operating taxes, such as sales taxes.
Whirlpool Latin America realized a Befiex tax credit of $17 million in the first
quarter.
Product launches in the first quarter targeted high-end consumer
segments. The new products include Jet Defrost microwave ovens, refrigerators
and freezers, as well as counter-top appliances under the Brastemp brand.
--more--
PAGE 4/WHIRLPOOL CORPORATION REPORTS FIRST QUARTER EARNINGS
For the full year, the company currently anticipates a 5 to 8 percent
increase in appliance industry unit shipments in Latin America. Based on the
current industry outlook, the company expects improved revenue growth and
operating profits to continue throughout the year because of better pricing,
productivity and new product introductions.
Asia
Despite a slowing appliance industry in India and in some other Asia
Pacific markets during the first quarter 2001, Whirlpool Asia reported a record
first quarter performance. Excluding currency translations, net sales were up 6
percent over the prior year period.
Appliance industry unit shipments in the region are expected to grow by
about 5 percent for the full year. Based on the current industry outlook and a
number of new Whirlpool brand product introductions in India, the company
expects a record operating performance for the region in 2001.
Restructuring/SG&A Reduction
In December 2000, the company announced plans to take a series of
restructuring actions that when fully implemented are expected to result in
pre-tax charges of between $300 million and $350 million. The 12-to-18 month
restructuring effort is expected to eliminate up to 6,000 positions worldwide.
The combination of restructuring activities and the company's SG&A
expense reduction initiative is expected to produce annualized savings of
between $225 million and $250 million.
In January 2001, the company announced the first phase of the
restructuring activity, which resulted in a pre-tax charge of $70 million ($48
million restructuring charge and $22 million restructuring-related charges) in
the quarter. The actions are expected to produce savings of about $35 million in
2001, increasing to approximately $50 million on an annualized basis.
--more--
PAGE 5/WHIRLPOOL CORPORATION REPORTS FIRST QUARTER EARNINGS
In accordance with accounting standards and SEC guidelines on
restructuring, details about subsequent restructuring actions will be announced
as the company finalizes its plans throughout the remainder of the year.
Summary
"We are cautious about the global economic picture, but we continue to
expect recoveries in North America and Europe during the second half of the
year, ongoing performance improvements in Latin America, and another
record-setting year in Asia," Whitwam stated. "We believe that our record number
of new product introductions, as well as our continual improvement in
productivity, will generate a strong global performance for Whirlpool
Corporation in 2001."
At 9:00 a.m. (EDT) 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.
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
(millions of dollars)
March 31 December 31
2001 2000
----------------- ------------------
ASSETS
Current Assets
- --------------
Cash and equivalents $ 177 $ 114
Trade receivables, less allowances of
(2001: $94 ;2000: $103 ) 1,640 1,748
Inventories 1,127 1,119
Prepaid expenses and other 201 206
Deferred income taxes 27 50
---------------- -----------------
Total Current Assets 3,172 3,237
Other Assets
- ------------
Investment in affiliated companies 113 113
Intangibles, net 731 762
Deferred income taxes 226 253
Other 650 403
---------------- -----------------
1,720 1,531
Property, Plant and Equipment
- -----------------------------
Land 59 64
Buildings 784 838
Machinery and equipment 4,261 4,374
Accumulated depreciation (3,099) (3,142)
---------------- -----------------
2,005 2,134
---------------- -----------------
Total Assets $ 6,897 $ 6,902
================ =================
March 31 December 31
2001 2000
------------------ -----------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
-------------------
Notes payable $ 1,050 $ 961
Accounts payable 1,121 1,257
Employee compensation 242 256
Accrued expenses 768 795
Restructuring costs 40 5
Current maturities of long-term debt 18 29
----------------- ----------------
Total Current Liabilities 3,239 3,303
Other Liabilities
-----------------
Deferred income taxes 157 175
Postemployment benefits 628 630
Other liabilities 144 168
Long-term debt 1,005 795
----------------- ----------------
1,934 1,768
Minority Interests 138 147
Stockholders' Equity
--------------------
Common stock 84 84
Paid-in capital 398 393
Retained earnings 2,558 2,539
Unearned restricted stock (8) (11)
Accumulated other comprehensive income (618) (495)
Treasury stock - at cost (828) (826)
----------------- ----------------
Total Stockholders' Equity 1,586 1,684
----------------- ----------------
Total Liabilities and Stockholders' Equity $ 6,897 $ 6,902
================= ================
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS (UNAUDITED)
WHIRLPOOL CORPORATION
FOR THE PERIOD ENDED MARCH 31
(millions of dollars except share and dividend data)
Three Months Ended
------------------------------------------------------
2001 Pro-forma 2001 2000
-------------------- ------------- -------------
Net sales $ 2,517 $ 2,517 $ 2,590
EXPENSES:
Cost of products sold 1,939 1,959 1,942
Selling and administrative 404 406 405
Intangible amortization 7 7 8
Restructuring costs - 48 -
-------- --------- -------
2,350 2,420 2,355
-------- --------- -------
OPERATING PROFIT 167 97 235
OTHER INCOME (EXPENSE):
Interest and sundry income (expense) (5) (5) (9)
Interest expense (44) (44) (38)
-------- --------- -------
EARNINGS BEFORE INCOME TAXES
AND OTHER ITEMS 118 48 188
Income taxes 43 17 71
-------- --------- -------
EARNINGS BEFORE EQUITY EARNINGS
AND MINORITY INTERESTS 75 31 117
Equity in earnings of affiliated companies 1 1 (2)
Minority interests (3) 1 (3)
-------- --------- -------
EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 73 33 112
Cumulative effect of change in accounting
principle, net of tax - 8 -
-------- --------- -------
NET EARNINGS $ 73 $ 41 $ 112
======== ========= =======
Per share of common stock:
Basic earnings before cumulative effect of accounting change $ 1.11 $ .49 $ 1.53
Basic net earnings $ 1.11 $ .62 $ 1.53
Diluted earnings before cumulative effect of accounting change $ 1.10 $ .49 $ 1.52
Diluted net earnings $ 1.10 $ .61 $ 1.52
Dividends declared $ .34 $ .34 $ .34
======== ========= =======
Note: 2001 Pro-forma excludes a change in accounting principle, restructuring,
and one-time charges related to restructuring within COGS and SG&A.