How did Kimberly-Clark perform in 2000 compared with 1999?

Net sales increased to $13.98 billion from $13.01 billion, and net income rose to $1.80 billion from $1.67 billion. Diluted earnings per share were $3.31, compared with $3.09 in 1999. Excluding unusual items, earnings from operations were $3.32 per share versus $2.98 in 1999.

What drove the growth in net sales and operating profit?

Management attributed the sales increase primarily to sales volumes growing approximately 9 percent, with each business segment contributing, and selling prices rising nearly 2 percent. Currency changes, primarily in Europe, reduced net sales by almost 3 percent. Excluding unusual items, operating profit increased 12.6 percent, driven by higher volumes and selling price increases that more than offset higher pulp costs.

How much debt does the company carry and how is its balance sheet positioned?

Total debt was $3.5 billion at December 31, 2000, an increase of almost $0.8 billion from the prior year. Net debt was nearly $3.3 billion, and the net debt-to-capital ratio was 35.2 percent, approximately the midpoint of its targeted 30 to 40 percent range. Long-term debt securities carry a Double-A rating.

What are the company's stated objectives and plans for 2001?

Management expects 2001 to be a year of continued growth and targets annual sales increases of 6 to 8 percent and double-digit increases in earnings per share from operations. It plans to invest more than $50 million in marketing and start-up costs for Cottonelle Fresh rollwipes and to incur start-up costs for new tissue machines in Oklahoma and Tennessee.

What significant legal or contingent matters does the filing disclose?

The filing discloses securities class actions and a shareholder derivative action against Safeskin, product liability lawsuits against Safeskin, a Maine lawsuit by nineteen plaintiffs, and the Mobile Energy Services Company matter, where a settlement of approximately $30 million is subject to court approval. Management does not expect these matters to have a material adverse effect on the company's financial condition or results of operations.

KMB 10-K FY2000 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed March 23, 2001. Cited figures are marked; the original filing is the authoritative source.

Kimberly-Clark Corporation's 10-K for fiscal 2000 reports net sales of $13.98 billion^a, up from $13.01 billion in 1999, and net income of $1.80 billion, or $3.31 per diluted share, compared with $1.67 billion, or $3.09 per diluted share, in 1999.

Operating profit rose to $2.63 billion^b from $2.44 billion. Management states that excluding unusual items, operating profit increased 12.6 percent and earnings from operations were $3.32 per diluted share versus $2.98 in 1999. Results were aided by the consolidation of Safeskin and S-K Corporation acquisitions and by a $75.8 million patent settlement and accrued liability reversal recorded in operating profit, while sales volumes rose approximately 9 percent and selling prices nearly 2 percent, offset by currency effects of almost 3 percent.

The company's total assets grew to $14.48 billion^c, and total debt reached $3.5 billion, an increase of almost $0.8 billion. Cash provided by operations was $2.13 billion, essentially flat year over year, while capital spending rose to $1.17 billion from $786.4 million. The company repurchased 21.0 million shares for nearly $1.2 billion in 2000, and the net debt-to-capital ratio was 35.2 percent, within its targeted range of 30 to 40 percent.

Management's outlook for 2001 targets sales increases of 6 to 8 percent and double-digit earnings-per-share growth from operations annually, and the company plans to launch Cottonelle Fresh rollwipes with more than $50 million^d in marketing and start-up costs. The filing also notes the completed Linostar acquisition on January 31, 2001, and that the 1997 and 1998 restructuring plans were completed as of December 31, 2000. The filing reports that pending litigation, including the Safeskin securities actions, the Mobile Energy Services Company matter, and environmental matters, is not expected to have a material adverse effect on the company's financial condition, though the MESC settlement remains subject to court approval and the company has developed contingency plans for its Mobile tissue mill.

02—Key points

Key Highlights

Net sales rose to $13.98 billion in 2000 from $13.01 billion in 1999, with sales volumes up approximately 9 percent.
Diluted net income per share was $3.31 in 2000 versus $3.09 in 1999; excluding unusual items, earnings from operations were $3.32 per share versus $2.98.
Operating profit reached $2.63 billion, including a $75.8 million patent settlement and accrued liability reversal and $35.1 million of business integration costs.
Total debt rose to $3.5 billion, an increase of almost $0.8 billion, and the net debt-to-capital ratio was 35.2 percent.
Capital spending increased to $1.17 billion from $786.4 million, and cash provided by operations was $2.13 billion.
The company repurchased 21.0 million shares for nearly $1.2 billion during 2000.
Acquisitions of Safeskin (approximately $750 million) and the Linostar diaper business (completed January 31, 2001) expanded health care and European diaper operations; the company targets 6 to 8 percent annual sales growth and double-digit EPS growth from operations.

03—Questions

Frequently Asked Questions

How did Kimberly-Clark perform in 2000 compared with 1999?
Net sales increased to $13.98 billion from $13.01 billion, and net income rose to $1.80 billion from $1.67 billion. Diluted earnings per share were $3.31, compared with $3.09 in 1999. Excluding unusual items, earnings from operations were $3.32 per share versus $2.98 in 1999.
What drove the growth in net sales and operating profit?
Management attributed the sales increase primarily to sales volumes growing approximately 9 percent, with each business segment contributing, and selling prices rising nearly 2 percent. Currency changes, primarily in Europe, reduced net sales by almost 3 percent. Excluding unusual items, operating profit increased 12.6 percent, driven by higher volumes and selling price increases that more than offset higher pulp costs.
How much debt does the company carry and how is its balance sheet positioned?
Total debt was $3.5 billion at December 31, 2000, an increase of almost $0.8 billion from the prior year. Net debt was nearly $3.3 billion, and the net debt-to-capital ratio was 35.2 percent, approximately the midpoint of its targeted 30 to 40 percent range. Long-term debt securities carry a Double-A rating.
What are the company's stated objectives and plans for 2001?
Management expects 2001 to be a year of continued growth and targets annual sales increases of 6 to 8 percent and double-digit increases in earnings per share from operations. It plans to invest more than $50 million in marketing and start-up costs for Cottonelle Fresh rollwipes and to incur start-up costs for new tissue machines in Oklahoma and Tennessee.
What significant legal or contingent matters does the filing disclose?
The filing discloses securities class actions and a shareholder derivative action against Safeskin, product liability lawsuits against Safeskin, a Maine lawsuit by nineteen plaintiffs, and the Mobile Energy Services Company matter, where a settlement of approximately $30 million is subject to court approval. Management does not expect these matters to have a material adverse effect on the company's financial condition or results of operations.

04—Continue

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