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Kimberly-Clark Annual Report (Amendment), Year Ended Dec 31, 1998

Filing Date
Filed August 6, 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.

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  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/A filed August 6, 1999. Cited figures are marked; the original filing is the authoritative source.

Kimberly-Clark Corporation's Form 10-K/A for the year ended December 31, 1998 restates its 1996, 1997 and 1998 financial statements, following discussions with the SEC's Division of Corporation Finance.

The restatement shifts certain merger-related costs from the 1995 Scott merger into later periods when incurred, revises how changes in restructuring estimates and accelerated depreciation are recorded, and records a Mobile, Alabama pulp mill energy contract termination penalty ($24.3 milliona) and severance ($18.0 million) in 1998 rather than the planned third quarter of 1999. Restated 1998 net income is $1,103.1 million, diluted EPS of $1.99, versus $1,165.8 million and $2.11 as previously reported. Restated 1998 operating profit is $1,573.3 million, against $1,676.1 million previously reported, while restated 1997 net income is $1,002.9 million (previously $901.5 million).

Net sales for 1998 were $12,297.8 millionb, down from $12,546.6 million in 1997. Stockholders' equity fell to $4,031.5 million at December 31, 1998, from $4,340.3 million, and long-term debt rose to $2,068.2 million. Cash provided by operations was $1,991.3 million in 1998, and the company repurchased 19.5 million shares for approximately $900 million.

The filing also describes pending transactions: the sale of about 460,000 acres of Southeast Timberlands to Joshua Management, LLC for approximately $400 millionc, expected to produce a net gain, and the acquisition of Ballard Medical Products valued at approximately $764 million, expected to close by September 30, 1999. The filing notes a putative antitrust class action regarding away-from-home tissue pricing, which the company does not expect to be material.

02—Key points

Key Highlights

  1. Restatement of 1995 through first quarter 1999 financials, with 1996, 1997 and 1998 results restated; restated 1998 net income of $1,103.1 million versus $1,165.8 million previously reported
  2. Restated 1998 operating profit of $1,573.3 million versus $1,676.1 million as previously reported; restated 1997 operating profit of $1,468.4 million versus $1,303.2 million previously reported
  3. Net sales of $12,297.8 million in 1998, compared with $12,546.6 million in 1997
  4. Diluted EPS of $1.99 restated for 1998 (previously $2.11); income before extraordinary items and accounting change of $1,114.3 million
  5. Pending $400 million sale of about 460,000 acres of Southeast Timberlands, expected to produce a net gain at closing
  6. Pending acquisition of Ballard Medical Products valued at approximately $764 million, expected to be completed by September 30, 1999
  7. Stockholders' equity of $4,031.5 million at year-end 1998, down from $4,340.3 million, with treasury stock purchases of about $900 million in 1998

03—Questions

Frequently Asked Questions

  1. Why did Kimberly-Clark restate its financial statements?

    Following discussions with the SEC's Division of Corporation Finance about restructuring and other charges recorded after the 1995 Scott merger, the 1997 restructuring plan and the 1998 facilities consolidation plan, the company restated its 1995, 1996, 1997, 1998 and first quarter 1999 financial statements. Changes include recording certain merger costs and severance in later periods when incurred, and recording changes in restructuring estimates in the periods they occurred.

  2. How did the restatement change 1998 earnings?

    Restated 1998 net income was $1,103.1 million, compared with $1,165.8 million previously reported. Restated 1998 diluted EPS was $1.99, compared with $2.11 previously reported. Restated 1998 operating profit was $1,573.3 million, compared with $1,676.1 million previously reported.

  3. What asset sales and acquisitions are pending?

    Kimberly-Clark agreed on June 10, 1999 to sell about 460,000 acres of Southeast Timberlands to Joshua Management, LLC for approximately $400 million, with a net gain expected at closing. It also agreed to acquire Ballard Medical Products, valued at about $764 million payable in common stock, with completion expected by September 30, 1999.

  4. How is the company's debt and liquidity position?

    Long-term debt was $2,068.2 million at December 31, 1998, versus $1,803.9 million a year earlier. Cash provided by operations was $1,991.3 million in 1998. The company had $1.0 billion of revolving credit facilities, which were unused at year-end, and its long-term debt carried a Double-A rating.

  5. What legal proceedings could affect the company?

    The State of Florida and other states, along with approximately 45 class action complaints, allege that manufacturers of away-from-home tissue products, including Kimberly-Clark and Scott, coordinated price increases. The company denies liability and intends to contest the claims vigorously, and management does not expect a material adverse effect. A separate January 1999 action by Mobile Energy Services Company claims unspecified damages over the contract cancellation, which is also not expected to be material.

04—Continue

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