01—Abstract
Summary
Summary of the 10-K filed February 22, 2008. Cited figures are marked; the original filing is the authoritative source.
Kimberly-Clark Corporation's 2007 Form 10-K reports net sales of $18.27 billiona, up 9.1 percent from $16.75 billion in 2006, with operating profit rising 24.5 percent to $2.62 billion and net income of $1.82 billion, or $4.09 per diluted share, up 25.8 percent in diluted EPS.
The filing attributes growth to higher sales volumes, favorable currency effects, increased net selling prices and improved product mix, while noting significant raw materials cost inflation of about $350 millionb. Lower Strategic Cost Reduction Plan charges of $377.2 million helped drive the profit improvement. Cash provided by operations was $2.43 billion, a decrease of 5.8 percent.
The company returned $3.7 billionc to shareholders in 2007 through dividends and share repurchases, including $2 billion under an accelerated share repurchase agreement funded by $2.1 billion of long-term notes issued in July 2007. Total debt and redeemable preferred securities rose to $6.5 billion from $4.4 billion at year-end 2006, and the debt-to-capital ratio reached 53.2 percent versus 40.3 percent a year earlier. Standard & Poor's lowered the senior unsecured rating to A+ with a negative outlook, and Moody's lowered it to A2.
Management expects top-line growth in 2008 and plans to keep reducing costs, while investing more in innovation, marketing and customer development. The Strategic Cost Reduction Plan is expected to reach cumulative pretax charges of approximately $880 million to $910 milliond by the end of 2008, with anticipated annual pretax savings of at least $350 million by 2009.
02—Key points
Key Highlights
- Net sales rose 9.1 percent to $18.27 billion, driven by volume growth, favorable currency effects, higher net selling prices and improved mix.
- Operating profit increased 24.5 percent to $2.62 billion; operating profit as a percent of net sales rose to 14.3 percent from 12.5 percent.
- Diluted EPS was $4.09, up 25.8 percent, and net income was $1.82 billion, up 21.6 percent.
- Raw materials cost inflation of about $350 million offset part of the gains, and cash provided by operations fell 5.8 percent to $2.43 billion.
- Returned $3.7 billion to shareholders through dividends and share repurchases, including a $2 billion accelerated share repurchase agreement.
- Total debt and redeemable preferred securities increased to $6.5 billion from $4.4 billion, lifting the debt-to-capital ratio to 53.2 percent from 40.3 percent.
- Strategic Cost Reduction Plan charges fell to $107.2 million pretax in 2007 from $484.4 million in 2006, with cumulative charges expected at $880 million to $910 million by end-2008.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2007, Kimberly-Clark kept $0.10.
- Revenue$18.27B100.0%
- Cost of revenue−$12.56B68.8%
- Gross profit$5.70B31.2%
- Operating costs−$3.09B16.9%
- Operating income$2.62B14.3%
- Interest, other & tax−$793.0M4.3%
- Net income$1.82B10.0%
Where FY2007 revenue went
$18.27B- Cost of revenue: $12.56B, 69% of revenue
- Operating costs: $3.09B, 17% of revenue
- Net income: $1.82B, 10.0% of revenue
- Interest, other & tax: $793.0M, 4.3% of revenue
Kept 10.0% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 22, 2008Financial Statements
05—Questions
Frequently Asked Questions
What drove the growth in Kimberly-Clark's 2007 results?
Net sales rose 9.1 percent, with sales volumes up 4 percent, currency effects adding about 3 percent, and net selling prices and product mix each adding about 1 percent. Personal Care sales increased 12.2 percent, and Consumer Tissue sales increased 8.2 percent.
How did the company fund its 2007 share repurchases?
On July 23, 2007, the company entered into a $2 billion accelerated share repurchase agreement for about 29.6 million shares at an initial price of $67.48 per share. It issued $2.1 billion of long-term notes on July 30, 2007, and used part of the proceeds to repay a $2 billion short-term revolving credit borrowing.
What is the outlook for 2008?
The company expects top-line growth in 2008, plans to continue reducing costs and will invest more in innovation, marketing and customer development. It expects Strategic Cost Reduction Plan savings of at least $350 million annually by 2009 and anticipates a net workforce reduction of about 10 percent by the end of 2008.
Did the credit ratings change in 2007?
Yes. In July 2007, Standard & Poor's lowered the senior unsecured debt rating to A+ with a negative outlook and lowered the commercial paper rating from A1+ to A1. Moody's lowered the senior rating to A2 with a stable outlook, and its commercial paper rating remained P1.
06—Continue