TMCnet News
Whirlpool Corporation Reports First-Quarter 2015 Results And Updates Full-Year 2015 GuidanceBENTON HARBOR, Mich., April 28, 2015 /PRNewswire/ -- Whirlpool Corporation (NYSE: WHR) announced today first-quarter GAAP net earnings of $191 million, or $2.38 per diluted share, compared to $160 million, or $2.02 per diluted share, reported for the same prior-year period. Ongoing business earnings per diluted share(1) totaled $2.14, compared to $2.20 in the same prior-year period. The benefit of cost and capacity-reduction initiatives, ongoing cost productivity and benefits from the acquisition integration activities were offset by unfavorable currency and a weakened demand environment in Brazil. Net sales in the quarter were a first-quarter record $4.8 billion compared to $4.4 billion during the same prior-year period, an increase of over 11 percent. Excluding the impact of both foreign currency and Brazilian (BEFIEX) tax credits, sales increased over 23 percent, primarily driven by the acquisitions. "Our integration plans in Europe and China remain on track and we have taken actions to overcome recent currency movements," said Jeff M. Fettig, chairman and chief executive officer of Whirlpool Corporation. "We continue to invest in our leading brand portfolio and innovative new products while adjusting to a continuing volatile global economy." First-quarter GAAP operating profit totaled $303 million compared to $281 million in the same prior-year period. Record first-quarter ongoing business operating profit(2) totaled $318 million, or 6.6 percent of sales, compared to $302 million, or 6.9 percent of sales, in the same prior-year period. Ongoing business operating margins benefited from acquisition integration activities and cost and capacity-reduction initiatives, which were offset by unfavorable currency. For the three months ended March 31, 2015, the company reported cash used in operating activities of $(569) million compared to cash used in operating activities of $(339) million in the same prior-year period. Whirlpool Corporation reported free cash flow(3) of $(651) million in the first quarter of 2015 compared to free cash flow(3) of $(456) million in the same prior-year period. As expected, the decrease in free cash flow was primarily driven by seasonal working capital requirements associated with the acquisitions. OUTLOOK Whirlpool Corporation has adjusted its full-year 2015 guidance to reflect the impact of unfavorable currency and a weakened demand environment in Brazil. The company now expects full-year GAAP net earnings per diluted share available to Whirlpool of $9.00 to $10.00 and full-year ongoing business earnings per diluted share of $12.00 to $13.00. Whirlpool Corporation recently announced cost-based price increases in Latin America and Eastern Europe, which along with strong cost productivity programs are expected to deliver significant second-half 2015 margin expansion. The company expects to deliver record sales and ongoing earnings for the year.
For the full-year 2015, the company now expects to generate free cash flow(3) of approximately $700 million. Included in this guidance are restructuring cash outlays of up to $250 million, capital spending of approximately $750 million to $800 million and U.S. pension contributions of approximately $72 million. "Our previously outlined long-term growth strategy remains on track," said Fettig, "and we are committed to creating significant shareholder value with our larger global platform, competitive cost structure, industry leading brands and broad product offering." FIRST-QUARTER REGIONAL REVIEW Whirlpool North America Whirlpool North America reported first-quarter net sales of $2.3 billion, up slightly from the same prior-year period. Excluding the impact of currency, sales increased over 2 percent. The region reported a first-quarter operating profit of $276 million, compared to $228 million in the same prior-year period. During the first quarter of 2015, the region incurred a one-time, non-cash benefit plan curtailment gain of approximately $47 million. Ongoing business segment operating profit(4) totaled $230 million, or 9.8 percent of sales, compared to $228 million, or 9.8 percent of sales, in the same prior-year period. Ongoing cost productivity and higher unit volumes were offset by unfavorable currency and the completion of prior-year product transitions. The company expects full-year 2015 industry unit shipments to increase by approximately 4 percent. Whirlpool Europe, Middle East and Africa Whirlpool Europe, Middle East and Africa reported first-quarter net sales of $1.3 billion compared to $0.7 billion in the same prior-year period. The region reported first-quarter operating profit of $17 million, compared to $7 million in the same prior-year period. During the first quarter of 2015, the region incurred a one-time, non-cash pension settlement charge of approximately $12 million. Ongoing business segment operating profit(4) totaled $35 million, or 2.7 percent of sales, compared to $7 million, or 1.0 percent of sales, in the same prior-year period. The benefits from the acquisition integration activities, ongoing cost productivity and the benefit of cost and capacity-reduction initiatives more than offset unfavorable currency. The company expects full-year 2015 industry unit shipments to be flat to up 2 percent. Whirlpool Latin America Whirlpool Latin America reported first-quarter net sales of $0.9 billion, compared to $1.2 billion in the same prior-year period. Excluding the impact of currency and BEFIEX tax credits, sales decreased approximately 11 percent. The region reported first-quarter GAAP operating profit of $59 million, compared to $123 million in the same prior-year period. During the first quarter of 2014, the company monetized $14 million of BEFIEX tax credits. Ongoing business segment operating profit(4) totaled $59 million, or 6.6 percent of sales, compared to $109 million, or 9.2 percent of sales, in the same prior-year period. Improved product price/mix was offset by unfavorable currency and lower unit volumes due to a weaker demand environment in Brazil. The company now expects full-year 2015 industry unit shipments to be down 10 to 12 percent. Whirlpool Asia Whirlpool Asia reported first-quarter net sales of $378 million compared to $166 million in the same prior-year period. The region reported a first-quarter GAAP operating profit of $24 million, compared to an operating profit of $5 million in the same prior-year period. Ongoing business segment operating profit(4) totaled $26 million, or 6.9 percent of sales, compared to $5 million, or 2.9 percent of sales, in the same prior-year period. The benefits from the acquisition integration activities, ongoing cost productivity, improved price/mix and the benefits of cost and capacity-reduction initiatives positively impacted margins. The company expects full-year 2015 industry unit shipments to be up 1 to 3 percent. (1) A reconciliation of ongoing business earnings per diluted share, a non-GAAP financial measure, to reported net earnings per diluted share available to Whirlpool and other important information, appears below. (2) A reconciliation of ongoing business operating profit, a non-GAAP financial measure, to reported operating profit and other important information, appears below. (3) A reconciliation of free cash flow, a non-GAAP financial measure, to cash provided by (used in) operating activities and other important information, appears below. (4) A reconciliation of ongoing business segment operating profit (loss), a non-GAAP financial measure, to reported segment operating profit (loss) and other important information, appears below. FIRST-QUARTER 2015 // PRODUCT LEADERSHIP, INNOVATION AND AWARDS Whirlpool Corporation is at the forefront of the home appliance industry - with deep consumer insights and a strong portfolio of brands worldwide. Our products are ideally positioned with consumers because they are as inventive as they are purposeful. We offer compelling home solutions that expand beyond our core appliance business, delivering innovation that matters to consumers and positioning our company for continued growth and profitability. Company Awards & Recognition
Product Innovation
About Whirlpool Corporation Whirlpool Additional Information:
Additional information concerning these and other factors can be found in Whirlpool's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K.
SUPPLEMENTAL INFORMATION - CONSOLIDATED FINANCIAL STATEMENTS RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Millions of dollars except per share data) We supplement the reporting of our financial information determined under U.S. generally accepted accounting principles (GAAP) with certain non-GAAP financial measures, some of which we refer to as "ongoing business" measures, including ongoing business operating profit (loss), ongoing business operating margin, earnings before interest and taxes (EBIT), earnings before interest and taxes (EBIT) margin, ongoing business earnings before interest and taxes (EBIT), ongoing business earnings before interest and taxes (EBIT) margin, ongoing business earnings (loss) before income taxes, ongoing business earnings per diluted share, ongoing business segment operating profit (loss), ongoing business segment operating margin, sales excluding foreign currency and BEFIEX, and free cash flow. Ongoing business measures exclude items that may not be indicative of, or are unrelated to, results from our ongoing business operations and provide a better baseline for analyzing trends in our underlying businesses. Sales excluding foreign currency and BEFIEX is calculated by translating the current period net sales excluding BEFIEX, in functional currency, to U.S. dollars using the prior-year period's exchange rate compared to the prior-year period net sales excluding BEFIEX. Management believes that sales excluding foreign currency and BEFIEX provides stockholders with a clearer basis to assess our results over time. Management believes that free cash flow provides investors and stockholders with a relevant measure of liquidity and a useful basis for assessing the company's ability to fund its activities and obligations. We believe that these non-GAAP measures provide meaningful information to assist investors and stockholders in understanding our financial results and assessing our prospects for future performance. Because non-GAAP financial measures are not standardized, it may not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names. These ongoing business financial measures should not be considered in isolation or as a substitute for reported operating profit (loss), net earnings per diluted share available to Whirlpool, reported operating profit (loss) by segment, net sales, and cash provided by (used in) operating activities, the most directly comparable GAAP financial measures. These non-GAAP financial measures reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results and the following reconciliations to corresponding GAAP financial measures, provide a more complete understanding of our business. We strongly encourage investors and stockholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Ongoing Business Operating Profit, Ongoing Business Earnings Before Interest and Taxes and Ongoing Business Earnings Per Diluted Share The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before interest and taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP financial measures, operating profit and net earnings per diluted share available to Whirlpool, for the three months ended March 31, 2015. Ongoing business operating margin is calculated by dividing ongoing business operating profit by net sales.
(5) Earnings Before Interest & Taxes is a non-GAAP measure calculated by adding Interest and sundry income (expense) [approximately $(53) million] and Operating Profit Ongoing Business Operating Profit, Ongoing Business Earnings Before Interest and Taxes and Ongoing Business Earnings Per Diluted Share The reconciliation provided below reconciles the non-GAAP financial measures ongoing business operating profit, ongoing business earnings before interest and taxes and ongoing business earnings per diluted share, with the most directly comparable GAAP financial measures, operating profit and net earnings per diluted share available to Whirlpool, for the three months ended March 31, 2014. Ongoing business operating margin is calculated by dividing ongoing business operating profit by net sales excluding BEFIEX.
(5) Earnings Before Interest & Taxes is a non-GAAP measure calculated by adding Interest and sundry income (expense) [approximately $(23) million] and Operating Profit Ongoing Business Segment Operating Profit (Loss) The reconciliation provided below reconciles the non-GAAP financial measure ongoing business segment operating profit (loss) with the most directly comparable GAAP financial measure, segment operating profit (loss), for the three months ended March 31, 2015. Ongoing business segment operating margin is calculated by dividing ongoing business segment operating profit (loss) by segment net sales.
The reconciliation provided below reconciles the non-GAAP financial measure ongoing business segment operating profit (loss) with the most directly comparable GAAP financial measure, reported segment operating profit (loss), for the three months ended March 31, 2014. Ongoing business segment operating margin is calculated by dividing ongoing business segment operating profit (loss) by segment net sales excluding BEFIEX.
Footnotes: a. During the first quarter of 2015, we recorded a benefit plan curtailment gain of $47 million. The earnings per diluted share impact is calculated based on an income tax impact of $11 million. b. During the first quarters of 2015 and 2014, we recorded restructuring charges of $33 million and $29 million, respectively. The earnings per diluted share impacts are calculated based on income tax impacts of $8 million and $7 million, respectively. c. During the first quarter of 2015, we recognized acquisition related transition costs of $15 million associated with the acquisition of a majority interest in Hefei Sanyo and the acquisition of Indesit. The earnings per diluted share impact is calculated based on an income tax impact of $4 million. During the first quarter of 2015, we recognized a $2 million inventory purchase price allocation adjustment. The earnings per diluted share impact is calculated based on an income tax impact of $0 million. d. During the first quarter of 2015, the company recognized expenses of $12 million related to an EMEA pension settlement. The earnings per diluted share impact is calculated based on an income tax impact of $3 million. e. During the first quarters of 2015 and 2014, we recognized expenses of approximately $10 million and $1 million, respectively, related to antitrust resolutions. The earnings per diluted share impacts are calculated based on income tax impacts of $2 million and $0 million, respectively. f. During the first quarters of 2015 and 2014, we made adjustments to ongoing business diluted EPS to reconcile specific items reported to anticipated full-year effective tax rates of approximately 24%. g. During the first quarter of 2014, we monetized Brazilian (BEFIEX) tax credits of $14 million. The earnings per diluted share impact is calculated based on an income tax impact of $0 million. h. During the first quarter of 2014 we recognized an investment expense of $8 million primarily related to the acquisition of a majority interest in Hefei Sanyo completed in Q4 2014. The earnings per diluted share impact is calculated based on an income tax impact of $2 million. Free Cash Flow As defined by the company, free cash flow is cash provided by (used in) operating activities after capital expenditures, proceeds from the sale of assets and businesses and changes in restricted cash. The reconciliation provided below reconciles three-month 2015 and 2014 and projected full-year free cash flow with cash provided by (used in) operating activities, the most directly comparable GAAP financial measure.
*Change in restricted cash relates to the private placement funds paid by Whirlpool to acquire majority control of Hefei Sanyo and which are released to fund approved capital expenditures and working capital. Logo - http://photos.prnewswire.com/prnh/20040202/DETU004LOGO To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/whirlpool-corporation-reports-first-quarter-2015-results-and-updates-full-year-2015-guidance-300072899.html SOURCE Whirlpool Corporation |