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Kimberly-Clark Annual Report, Year Ended Dec 31, 1994

Filing Date
Filed March 24, 1995
Period End
December 31, 1994
Security
KMB
In the record · 2016–202610-K1110-Q328-K111

KMB filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 111 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Leadership change8-K · Sep ’19Sep ’19
  3. Change in control8-K · Sep ’21Sep ’21
  4. Leadership change8-K · Nov ’25Nov ’25

01—Abstract

Summary

Summary of the 10-K filed March 24, 1995. Cited figures are marked; the original filing is the authoritative source.

Kimberly-Clark Corporation's 1994 Form 10-K reports net sales of $7,364.2 milliona, up from $6,972.9 million in 1993, and net income of $535.1 million, or $3.33 per share, compared with $510.9 million, or $3.18 per share, a year earlier.

Operating profit rose to $819.1 millionb from $793.5 million, but the company states that operating profit declined as a percentage of sales (11.1% versus 11.4%) due mainly to lower selling prices, higher labor and fiber costs, and lower training pant volumes in North America. Cash provided by operations fell to $669.0 million from $746.7 million, largely because operating working capital needs increased by $184.2 million. Capital spending declined to $485.2 million from $654.5 million, and the total debt to capital ratio was 38.9%, above the company's 28% to 32% target range.

The company's Class I products (tissue, infant, child, feminine and incontinence care) generated $5,911.4 millionc in net sales and $655.6 million in operating profit. Europe posted an operating loss of $59.4 million, which management attributes largely to the cost of launching Huggies diapers, and expects losses in 1995 to be less than in 1994. Net income was reduced by a nonoperating after-tax charge of $39.2 million ($.24 per share) for the company's 43 percent-owned Mexican affiliate's foreign currency losses following the December 1994 peso devaluation.

Management says it cannot yet assess the effect of this currency risk on 1995 net income. The filing also discloses a 1995 outlook of expected tissue, newsprint and paper price increases, planned 1995 capital spending of $500 million to $600 milliond, and a decision to retain North American pulp and newsprint operations for now rather than divest them. Legal matters include a West Virginia Attorney General suit seeking medical cost recovery from tobacco-related illnesses, asbestos claims tied to the Coosa Pines mill (with tentative settlements in four actions), and potentially responsible party designations at 28 waste disposal sites.

02—Key points

Key Highlights

  1. Net sales rose 5.6% to $7,364.2 million in 1994, driven by higher sales volumes that more than offset lower selling prices.
  2. Net income increased to $535.1 million, or $3.33 per share, up from $510.9 million, or $3.18 per share, in 1993.
  3. Operating profit reached $819.1 million, but the operating margin declined to 11.1% from 11.4% of net sales.
  4. A $39.2 million ($.24 per share) nonoperating charge related to the Mexican peso devaluation reduced 1994 results through the 43 percent-owned Mexican affiliate.
  5. Cash provided by operations declined to $669.0 million from $746.7 million, reflecting a $184.2 million increase in operating working capital needs.
  6. Total debt to capital was 38.9%, above the company's long-term target range of 28% to 32%, with management expecting it to move closer to target by year-end 1995.
  7. The company is retaining its North American pulp and newsprint operations for now instead of divesting them, citing rapid price escalation in those markets.

03—Questions

Frequently Asked Questions

  1. How did Kimberly-Clark perform financially in 1994?

    Net sales grew 5.6% to $7,364.2 million and net income rose to $535.1 million, or $3.33 per share, from $510.9 million, or $3.18 per share, in 1993. Operating profit increased 3.2% to $819.1 million, though the operating margin slipped to 11.1% from 11.4%.

  2. What caused the drop in 1994 earnings from the Mexican affiliate?

    The December 1994 devaluation of the Mexican peso led the 43 percent-owned Mexican affiliate to record foreign currency losses on dollar-denominated liabilities. Kimberly-Clark's share was a nonoperating, after-tax charge of $39.2 million, or $.24 per share, and management says it cannot yet assess the effect on 1995 net income.

  3. How is the company's balance sheet and cash flow positioned?

    Cash provided by operations was $669.0 million, down from $746.7 million, and capital spending fell to $485.2 million from $654.5 million. Long-term debt was $929.5 million and stockholders' equity was $2,595.8 million at year-end 1994. The total debt to capital ratio of 38.9% remains above the 28% to 32% target.

  4. What is the outlook for 1995?

    Management expects benefits from price increases on tissue, newsprint and other paper products, and expects European losses to be smaller than in 1994. Planned capital spending is $500 million to $600 million, and the debt to capital ratio is expected to move closer to the target range by the end of 1995.

  5. What are the main legal and environmental risks disclosed?

    The company faces a West Virginia Attorney General lawsuit seeking to recover medical costs for tobacco-related illnesses and asbestos-related personal injury claims tied to the Coosa Pines, Alabama mill, where tentative settlements were reached in four of the actions. It has been named a potentially responsible party at 28 waste disposal sites, and management does not believe any of these could have a material adverse impact.

04—Continue

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