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Kimberly-Clark Annual Report, Year Ended Dec 31, 1998

Filing Date
Filed March 26, 1999
Period End
December 31, 1998
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 26, 1999. Cited figures are marked; the original filing is the authoritative source.

Kimberly-Clark Corporation's 1998 Form 10-K describes a company transitioning from diversified businesses into a global consumer products company organized into three segments: Tissue, Personal Care, and Health Care and Other.

In 1998, net sales were $12,297.8 milliona (versus $12,546.6 million in 1997), operating profit rose to $1,676.1 million (from $1,303.2 million), and net income was $1,165.8 million, or $2.11 diluted per share (versus $901.5 million, or $1.61 diluted, in 1997). Excluding unusual items, the company reported earnings per share from operations of $2.46, up from $2.44 in 1997. Results were affected by a $108.8 million 1998 Charge and a $123.2 million facility consolidation charge, as well as a $101.5 million restructuring line item, and the company reports that the Announced Plan is expected to reduce operating costs by about $220 million annually by 2000.

Key portfolio actions in the filing include the August 1998 sale of K-C Aviation for $250 millionb in cash, the acquisition of a 50 percent interest in Klabin Tissue in Brazil, and a definitive agreement announced December 23, 1998 to acquire Ballard Medical Products for a value of approximately $764 million, payable in Kimberly-Clark common stock. Cash provided by operations was $1,991.3 million, and the company repurchased 19.5 million shares for about $900 million in 1998.

Total stockholders' equity declined to $3,887.2 millionc from $4,133.3 million, and the ratio of net debt to capital rose to 36.4 percent from 33.5 percent. The filing also flags risks, including intense competition, raw material price swings in pulp, foreign market exposure in 38 manufacturing countries, and a pending antitrust complaint filed by the State of Florida and related class actions over away-from-home tissue pricing, which management does not expect to have a material adverse effect.

02—Key points

Key Highlights

  1. Net sales of $12,297.8 million in 1998, compared with $12,546.6 million in 1997
  2. Operating profit of $1,676.1 million in 1998, compared with $1,303.2 million in 1997
  3. Net income of $1,165.8 million, or $2.11 diluted EPS, versus $1.61 diluted EPS in 1997
  4. Earnings per share from operations, excluding unusual items, of $2.46 in 1998 versus $2.44 in 1997
  5. Cash provided by operations of $1,991.3 million and share repurchases of about $900 million in 1998
  6. Pending acquisition of Ballard Medical Products valued at approximately $764 million, payable in common stock
  7. Net debt to capital ratio rose to 36.4 percent from 33.5 percent, within a target range of 30 to 40 percent

03—Questions

Frequently Asked Questions

  1. What drove the change in operating profit in 1998?

    Operating profit rose to $1,676.1 million from $1,303.2 million, largely because 1997 included the $701.2 million 1997 Charge, while 1998 included a smaller $108.8 million 1998 Charge and a $123.2 million facility consolidation charge. Excluding unusual items, operating profit was essentially even, per management's commentary.

  2. What are the main risks the filing identifies?

    The filing cites intense competition from branded and private label products, volatile pulp prices affecting tissue margins, foreign market and currency risks across manufacturing in 38 countries, the ability to realize cost savings and acquisition synergies, and a pending Florida-led antitrust complaint with class actions over away-from-home tissue pricing.

  3. What is the status of the Ballard Medical Products acquisition?

    On December 23, 1998, Kimberly-Clark agreed to acquire Ballard Medical Products for about $764 million, with Ballard shareholders receiving $25 per share in Kimberly-Clark common stock. The transaction remained subject to regulatory clearances and Ballard shareholder approval and was expected to close in April 1999.

  4. How is the company's balance sheet and cash generation positioned?

    Cash provided by operations was $1,991.3 million in 1998. Total debt was $2.7 billion, and net debt was $2.3 billion. The company's long-term debt securities carried a Double-A rating, and it had $1.0 billion of revolving credit facilities. Stockholders' equity fell to $3,887.2 million, largely reflecting treasury stock purchases.

04—Continue

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