Kimberly-Clark's Record First Quarter Earnings From Operations Were Driven By Sales and Operating Profit Gains in All Businesses
Kimberly-Clark's Record First Quarter Earnings From Operations Were Driven By Sales and Operating Profit Gains in All Businesses DALLAS, April 24 -- In conjunction with the company's annual meeting on April 13, Kimberly-Clark Corporation (NYSE: KMB) reported that sales in the first quarter of 2000 were $3.4 billion and earnings from operations of 80 cents per share set an all-time quarterly record. Today the company provided additional details about its first quarter results.
Commenting on the company's record first quarter results, Wayne R. Sanders, chairman and chief executive officer of Kimberly-Clark, said: "We're off to a great start and looking forward to another excellent year in 2000. Our global teams are doing an outstanding job of delivering both top- and bottom-line growth. We're benefiting from new and improved products and global expansion of our core businesses. Meanwhile, a strong focus on productivity and cost reduction efforts, including our Go-To-Market programs, also contributed to improved gross profit and operating profit margins.
"Importantly, we're continuing to generate excellent cash flow. In fact, cash provided by operations was about $580 million in the first quarter, nearly 35 percent greater than last year. Our strong cash flow is the engine that powers our growth."
Previously reported results
First quarter earnings from operations were a record 80 cents per share, an increase of 11.1 percent compared with 72 cents per share in 1999. Double- digit growth in sales volumes, along with continued cost savings, enabled the company to more than offset significantly higher costs for raw materials worldwide and currency effects in Europe.
Including unusual items, diluted net income per share for the first quarter was 86 cents per share in 2000, an increase of 24.6 percent compared with 69 cents per share in 1999. The unusual items consisted primarily of proceeds from settlement of a patent dispute in 2000 and charges for business improvement and other programs in 1999.
Sales of $3.4 billion for the first quarter were up 8.4 percent compared with 1999. Sales would have increased approximately 10 percent if the revenues of the company's pulp and timberlands operations in the southeastern United States and pulp operations in Spain, which were sold or closed in 1999, were excluded. Sales volumes, excluding divestitures, were 12 percent higher, while changes in foreign currency rates reduced sales by about 2 percent.
Additional details reported today
The company said that sales in the first quarter of 2000 improved in each of the company's core businesses and in every region of the world.
Tissue sales rose 4.6 percent from the first quarter of 1999. Excluding the revenues of divested businesses, however, sales were up nearly 8 percent, driven by an increase in sales volumes of approximately 10 percent. Sales volume growth in North America was well above category growth for both consumer and away-from-home products, led by improved products such as Kleenex Cottonelle and Scott bathroom tissue, Scott paper towels and Kleenex Scottfold hand towels. The acquisition of Attisholz's tissue business in Europe also contributed to the volume gains.
Sales of personal care products were 8.1 percent greater than in 1999, with increased sales volumes accounting for the entire gain. Sales volumes of Huggies diapers were higher in all regions, with strong double-digit growth in Europe, Asia and Latin America. Market share gains for Kotex feminine pads in Korea, and Depend and Poise incontinence products in North America also boosted growth in personal care.
Sales of health care and other products rose 40.8 percent, due to the acquisitions of Ballard Medical Products and Safeskin Corporation along with solid growth in sales volumes of the company's base business.
Operating profit in the first quarter of 2000 was $678.7 million, 24.6 percent greater than in the prior year. Excluding unusual items, operating profit rose 10.1 percent to $624.6 million in the first quarter of 2000 compared with $567.4 million in 1999, with improvement in each business segment. The increase was achieved despite significantly higher raw materials costs worldwide, mainly for fiber used in the company's tissue business, higher marketing costs and currency effects in Europe.
Kimberly-Clark's share of net income of equity companies in the first quarter was $47.6 million in 2000 compared with $43.6 million in 1999. The increase was primarily attributable to higher earnings at Kimberly-Clark de Mexico, S.A. de C.V., which benefited from strong double-digit sales growth and continued excellent margins.
Excluding unusual items, the company's effective tax rate in the first quarter was 31.0 percent in 2000 compared with 32.4 percent in 1999. During the quarter, the company repurchased 7.5 million shares of common stock at a cost of $387 million.
Kimberly-Clark Corporation is a leading global manufacturer of tissue, personal care and health care products. The company's global brands include Huggies, Pull-Ups, Kotex, Depend, Kleenex, Scott, Kimberly-Clark, Safeskin, Tecnol, Kimwipes and WypAll. Other brands well known outside the U.S. include Andrex, Scottex, Page, Popee and Kimbies. Kimberly-Clark also is a major producer of premium business, correspondence and technical papers. The company has manufacturing operations in 40 countries and sells its products in more than 150 countries.
Certain matters contained in this news release concerning the business outlook, anticipated financial and operating results, strategies, contingencies and transactions of the company constitute forward-looking statements and are based upon management's expectations and beliefs concerning future events impacting the company. For a description of certain factors that could cause the company's future results to differ materially from those expressed in any such forward-looking statements, see the section of Part I, Item 1 of the company's Annual Report on Form 10-K for the year ended December 31, 1999 entitled "Factors That May Affect Future Results."
