Delaware | 1-07151 | 31-0595760 |
(State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer Identification |
incorporation) | No.) |
Not applicable |
(Former name or former address, if changed since last report) |
Item 9.01 Financial Statements and Exhibits | ||||
(d) | Exhibits | |||
Exhibit | Description | |||
99.1 | Press Release dated May 3, 2011 of The Clorox Company | |||
99.2 | Supplemental information regarding financial results |
THE CLOROX COMPANY
|
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Date: May 3, 2011 | By: | /s/ Laura Stein | |
Senior Vice President – | |||
General Counsel |
Exhibit | Description |
99.1 | Press Release dated May 3, 2011 of The Clorox Company |
99.2 | Supplemental Information |
PRESS RELEASE
|
The Clorox Company |
Three Months Ended | Nine Months Ended | |||||||||||||
3/31/2011 | 3/31/2010 | 3/31/2011 | 3/31/2010 | |||||||||||
Net sales | $ | 1,304 | $ | 1,287 | $ | 3,749 | $ | 3,805 | ||||||
Cost of products sold | 729 | 713 | 2,121 | 2,119 | ||||||||||
Gross profit | 575 | 574 | 1,628 | 1,686 | ||||||||||
Selling and administrative expenses | 182 | 178 | 543 | 535 | ||||||||||
Advertising costs | 125 | 122 | 360 | 367 | ||||||||||
Research and development costs | 29 | 30 | 86 | 85 | ||||||||||
Goodwill impairment | - | - | 258 | - | ||||||||||
Interest expense | 29 | 34 | 94 | 107 | ||||||||||
Other (income) expense, net | (9 | ) | 1 | (22 | ) | 29 | ||||||||
Earnings from continuing operations before income taxes | 219 | 209 | 309 | 563 | ||||||||||
Income taxes on continuing operations | 78 | 66 | 191 | 187 | ||||||||||
Earnings from continuing operations | 141 | 143 | 118 | 376 | ||||||||||
Discontinued operations: | ||||||||||||||
Earnings from Auto businesses, net of tax | - | 22 | 23 | 56 | ||||||||||
Gain on sale of Auto businesses, net of tax | 10 | - | 247 | - | ||||||||||
Earnings from discontinued operations | 10 | 22 | 270 | 56 | ||||||||||
Net earnings | $ | 151 | $ | 165 | $ | 388 | $ | 432 | ||||||
Earnings per share | ||||||||||||||
Basic | ||||||||||||||
Continuing operations | $ | 1.03 | $ | 1.01 | $ | 0.85 | $ | 2.66 | ||||||
Discontinued operations | 0.07 | 0.16 | 1.95 | 0.40 | ||||||||||
Basic net earnings per share | $ | 1.10 | $ | 1.17 | $ | 2.80 | $ | 3.06 | ||||||
Diluted | ||||||||||||||
Continuing operations | $ | 1.02 | $ | 1.00 | $ | 0.84 | $ | 2.64 | ||||||
Discontinued operations | 0.07 | 0.16 | 1.93 | 0.40 | ||||||||||
Diluted net earnings per share | $ | 1.09 | $ | 1.16 | $ | 2.77 | $ | 3.04 | ||||||
Weighted average shares outstanding (in thousands) | ||||||||||||||
Basic | 136,364 | 140,764 | 138,172 | 140,270 | ||||||||||
Diluted | 137,689 | 142,014 | 139,527 | 141,509 |
The Clorox Company
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Third Quarter | Net Sales | Earnings/(Losses) from Continuing Operations Before Income Taxes |
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Three Months Ended | Three Months Ended | ||||||||||||||||||||
3/31/2011 | 3/31/2010 (2) | % Change (1) | 3/31/2011 | 3/31/2010 (2) | % Change (1) | ||||||||||||||||
Cleaning Segment | $ | 407 | $ | 397 | 3 | % | $ | 89 | $ | 94 | -5 | % | |||||||||
Household Segment | 394 | 408 | -3 | % | 73 | 72 | 1 | % | |||||||||||||
Lifestyle Segment | 227 | 226 | 0 | % | 68 | 82 | -17 | % | |||||||||||||
International Segment | 276 | 256 | 8 | % | 39 | 38 | 3 | % | |||||||||||||
Corporate (4) | - | - | 0 | % | (50 | ) | (77 | ) | -35 | % | |||||||||||
Total Company | $ | 1,304 | $ | 1,287 | 1 | % | $ | 219 | $ | 209 | 5 | % | |||||||||
Year-to-Date | Net Sales | Earnings/(Losses) from Continuing Operations Before Income Taxes |
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Nine Months Ended | Nine Months Ended | ||||||||||||||||||||
3/31/2011 | 3/31/2010 (2) | % Change (1) | 3/31/2011 | 3/31/2010 (2) | % Change (1) | ||||||||||||||||
Cleaning Segment | $ | 1,210 | $ | 1,229 | -2 | % | $ | 274 | $ | 283 | -3 | % | |||||||||
Household Segment | 1,068 | 1,123 | -5 | % | 151 | 154 | -2 | % | |||||||||||||
Lifestyle Segment (3) | 646 | 638 | 1 | % | (66 | ) | 226 | -129 | % | ||||||||||||
International Segment | 825 | 815 | 1 | % | 120 | 113 | 6 | % | |||||||||||||
Corporate (4) | - | - | 0 | % | (170 | ) | (213 | ) | -20 | % | |||||||||||
Total Company | $ | 3,749 | $ | 3,805 | -1 | % | $ | 309 | $ | 563 | -45 | % | |||||||||
(1) | Percentages based on rounded numbers. | |
(2) | As a result of the Auto Businesses' results being included in discontinued operations in the three and nine months ended March 31, 2011, the prior comparative period has been reclassified to conform with the current period presentation. | |
(3) | The earnings/(losses) from continuing operations before income taxes for the nine months ended March 31, 2011 for the Lifestyle segment includes a $258 noncash goodwill impairment charge recognized in the fiscal 2011 second quarter for the Burt's Bees business. | |
(4) | The decrease in corporate losses for the three and nine months ended March 31, 2011, as compared to the three and nine months ended March 31, 2010, is primarily due to lower employee compensation costs, gains on low-income housing properties and lower interest expense, primarily due to a decline in average debt balances. These factors were partially offset by the incremental investments for information technology projects. |
The Clorox Company | |
3/31/2011 | 6/30/2010 | 3/31/2010 | ||||||||||
ASSETS | ||||||||||||
Current assets | ||||||||||||
Cash and cash equivalents | $ | 153 | $ | 87 | $ | 241 | ||||||
Receivables, net | 499 | 540 | 550 | |||||||||
Inventories, net | 435 | 332 | 390 | |||||||||
Assets held for sale, net | - | 405 | 403 | |||||||||
Other current assets | 117 | 125 | 117 | |||||||||
Total current assets | 1,204 | 1,489 | 1,701 | |||||||||
Property, plant and equipment, net | 1,006 | 966 | 923 | |||||||||
Goodwill | 1,066 | 1,303 | 1,311 | |||||||||
Trademarks, net | 550 | 550 | 553 | |||||||||
Other intangible assets, net | 86 | 96 | 99 | |||||||||
Other assets | 139 | 144 | 147 | |||||||||
Total assets | $ | 4,051 | $ | 4,548 | $ | 4,734 | ||||||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | ||||||||||||
Current liabilities | ||||||||||||
Notes and loans payable | $ | 343 | $ | 371 | $ | 586 | ||||||
Current maturities of long-term debt | - | 300 | 300 | |||||||||
Accounts payable | 360 | 409 | 341 | |||||||||
Accrued liabilities | 452 | 491 | 475 | |||||||||
Income taxes payable | 77 | 74 | 66 | |||||||||
Total current liabilities | 1,232 | 1,645 | 1,768 | |||||||||
Long-term debt | 2,125 | 2,124 | 2,132 | |||||||||
Other liabilities | 715 | 677 | 610 | |||||||||
Deferred income taxes | 61 | 19 | 44 | |||||||||
Total liabilities | 4,133 | 4,465 | 4,554 | |||||||||
Contingencies | ||||||||||||
Stockholders’ (deficit) equity | ||||||||||||
Common stock | 159 | 159 | 159 | |||||||||
Additional paid-in capital | 623 | 617 | 599 | |||||||||
Retained earnings | 1,059 | 920 | 838 | |||||||||
Treasury shares | (1,616 | ) | (1,242 | ) | (1,109 | ) | ||||||
Accumulated other comprehensive net losses | (307 | ) | (371 | ) | (307 | ) | ||||||
Stockholders’ (deficit) equity | (82 | ) | 83 | 180 | ||||||||
Total liabilities and stockholders’ (deficit) equity | $ | 4,051 | $ | 4,548 | $ | 4,734 | ||||||
The Clorox Company
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|
Fiscal 2011 |
Fiscal 2010 |
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Base sales growth | 0.9 | % | 2.0 | % | |
Foreign exchange | 1.0 | -0.3 | |||
Incremental customer pick-up allowances | -0.6 | -- | |||
Total sales growth | 1.3 | % | 1.7 | % | |
Q3 fiscal 2010 gross margin | ||||||||
(adjusted for discontinued | Q3 fiscal 2009 gross margin (as | |||||||
operations) | 44.6 | % | previously reported) | 45.3 | % | |||
Commodities | -1.5 | Commodities | -1.2 | |||||
Cost savings | 1.8 | Cost savings | 1.7 | |||||
Pricing | 0.6 | Pricing | 0.6 | |||||
Logistics and manufacturing | -1.0 | Logistics and manufacturing | 0.0 | |||||
Incremental customer pick-up | Incremental customer pick-up | |||||||
allowances | 0.3 | allowances | 0.0 | |||||
Other | -0.6 | Other | -1.4 | |||||
Q3 fiscal 2011 gross margin before | Q3 fiscal 2010 gross margin before | |||||||
impact of charges | 44.2 | impact of charges | 45.0 | |||||
Restructuring-related charges | -0.1 | Restructuring-related charges | 0.2 | |||||
Impact of Auto Care businesses divestiture | -- | Impact of Auto Care businesses divestiture | -0.6 | |||||
Q3 fiscal 2010 gross margin | ||||||||
Q3 fiscal 2011 gross margin | 44.1 | % | (adjusted for discontinued | 44.6 | % | |||
operations) | ||||||||
Q3 Fiscal 2011 |
Q3 Fiscal 2010 | ||||||||
As previously reported |
Adjusted for discontinued operations |
||||||||
Diluted EPS – non-GAAP | $ | 1.03 | $ | 1.23 | $ | 1.07 | |||
Foreign exchange impact – Venezuela | 0.02 | -0.07 | -0.07 | ||||||
Restructuring and restructuring-related charges | -0.03 | 0.00 | 0.00 | ||||||
Diluted EPS – continuing operations (excl. impairment) | 1.02 | 1.16 | 1.00 | ||||||
Impact of goodwill impairment | -- | -- | -- | ||||||
Diluted EPS – continuing operations | 1.02 | 1.16 | 1.00 | ||||||
Earnings from Auto Care businesses, net of tax | 0.00 | -- | 0.16 | ||||||
Gain on sale of Auto Care businesses, net of tax | 0.07 | -- | -- | ||||||
Diluted EPS – GAAP | $ | 1.09 | $ | 1.16 | $ | 1.16 | |||
Year to Date Fiscal 2011 |
Year to Date Fiscal 2010 |
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Diluted EPS – non-GAAP | $ | 2.88 | $ | 2.90 | ||
Foreign exchange impact – Venezuela | -0.13 | -0.19 | ||||
Restructuring and restructuring-related charges | -0.07 | -0.07 | ||||
Diluted EPS – continuing operations (excl. impairment) | 2.68 | 2.64 | ||||
Impact of goodwill impairment | -1.84 | -- | ||||
Diluted EPS – continuing operations | 0.84 | 2.64 | ||||
Earnings from Auto Care businesses, net of tax | 0.16 | 0.40 | ||||
Gain on sale of Auto Care businesses, net of tax | 1.77 | -- | ||||
Diluted EPS – GAAP | $ | 2.77 | $ | 3.04 | ||
The Clorox Company
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Reportable
Segment
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% Change vs. Prior Year | |||||||||
FY10 (2) | FY11 (2) | Major Drivers of Change | ||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | YTD | ||
Cleaning | 6% | 9% | 3% | -2% | 4% | 1% | -6% | 4% | 0% |
Q3 increase primarily driven by higher shipments of disinfecting products to institutional customers and higher shipments of several Home Care products.
|
Household | -7% | 0% | 4% | 1% | -1% | -9% | -1% | -3% | -4% |
Q3 decrease primarily driven by lower shipments of Glad® trash bags and food-storage products.
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Lifestyle (1) | 4% | 12% | 8% | 10% | 8% | 1% | 3% | 3% | 2% |
Q3 increase primarily due to higher shipments of Burt’s Bees® natural personal care products and Hidden Valley® salad dressings.
|
International (1) | 3% | 1% | 1% | 0% | 1% | -2% | 3% | 0% | 0% |
Q3 volume change includes higher shipments of Clorox® disinfecting wipes in Canada, offset by lower shipments in Latin America.
|
Total Company | 1% | 5% | 3% | 1% | 3% | -2% | -2% | 1% | -1% |
Reportable
Segment
|
% Change vs. Prior Year | |||||||||
FY10 (2) | FY11 (2) | Major Drivers of Change | ||||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | YTD | ||
Cleaning | 5% | 3% | -2% | -4% | 0% | -1% | -6% | 3% | -2% |
Q3 variance between changes in volume and sales due to incremental customer pickup allowances.
|
Household | -11% | -6% | 0% | 0% | -4% | -7% | -4% | -3% | -5% |
Q3 change in sales includes unfavorable product mix and incremental customer pickup allowances, offset by lower trade promotion spending and the benefit of price increases.
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Lifestyle (1) | 3% | 10% | 5% | 7% | 6% | 1% | 3% | 0% | 1% |
Q3 variance between changes in volume and sales driven by unfavorable product mix and increased trade promotion spending to support innovation.
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International (1) | 4% | 22% | 7% | 2% | 9% | -2% | -1% | 8% | 1% |
Q3 variance between changes in volume and sales was due to the benefit of price increases and favorable foreign currency exchange rates.
|
Total Company | -1% | 5% | 1% | 0% | 1% | -3% | -3% | 1% | -1% |
(1) |
Lifestyle includes results of the worldwide Burt’s Bees business. International includes Canadian results.
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|
(2) | Volume growth and sale growth percentage changes for the Cleaning and International reportable segments and Total Company reflect the reclassification of the Auto Care businesses to discontinued operations in Q1 fiscal 2011 for sales through November 4th of fiscal year 2011. |
The Clorox Company | |
FY 2010 | FY 2011 | |||||||||||||||||||||||||||||||||
Q1 9/30/09 |
Q2 12/31/09 |
Q3 3/31/10 |
Q4 6/30/10 |
FY 6/30/10 |
Q1 9/30/10 |
Q2 12/31/10 |
Q3 3/31/11 |
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Earnings (losses) from continuing | ||||||||||||||||||||||||||||||||||
operations before income taxes | $ | 217 | $ | 137 | $ | 209 | $ | 242 | $ | 805 | $ | 202 | $ | (112 | ) | $ | 219 | |||||||||||||||||
Goodwill impairment (2) | - | - | - | - | - | - | 258 | - | ||||||||||||||||||||||||||
Interest income | (1 | ) | (1 | ) | - | (1 | ) | (3 | ) | (1 | ) | (1 | ) | - | ||||||||||||||||||||
Interest expense | 36 | 37 | 34 | 32 | 139 | 32 | 33 | 29 | ||||||||||||||||||||||||||
EBIT (3) | 252 | 173 | 243 | 273 | 941 | 233 | 178 | 248 | ||||||||||||||||||||||||||
EBIT margin (3) | 19.3% | 14.2% | 18.9% | 19.1% | 18.0% | 18.4% | 15.1% | 19.0% | ||||||||||||||||||||||||||
Depreciation and amortization | 48 | 46 | 44 | 45 | 183 | 45 | 43 | 42 | ||||||||||||||||||||||||||
EBITDA (4) | $ | 300 | $ | 219 | $ | 287 | $ | 318 | $ | 1,124 | $ | 278 | $ | 221 | $ | 290 | ||||||||||||||||||
EBITDA margin (4) | 23.0% | 18.0% | 22.3% | 22.3% | 21.5% | 22.0% | 18.7% | 22.2% | ||||||||||||||||||||||||||
Net sales | $ | 1,303 | $ | 1,215 | $ | 1,287 | $ | 1,429 | $ | 5,234 | $ | 1,266 | $ | 1,179 | $ | 1,304 | ||||||||||||||||||
(1) | In accordance with SEC's Regulation G, this schedule provides the definition of certain non-GAAP measures and the reconciliation to the most closely related GAAP measure. Management believes the presentation of EBIT, EBIT margin, EBITDA and EBITDA margin provides additional useful information to investors about current trends in the business. | |
Note: The Company calculates EBITDA for compliance with its debt covenants using net earnings. | ||
(2) | The goodwill impairment represents a $258 million noncash charge recognized in Q2 fiscal 2011 to adjust the carrying value of the goodwill related to the acquisition of Burt’s Bees to estimated fair value. | |
(3) | EBIT (a non-GAAP measure) represents earnings (losses) from continuing operations before income taxes (a GAAP measure), excluding goodwill impairment, interest income and interest expense, as reported above. EBIT margin is a measure of EBIT as a percentage of net sales. | |
(4) | EBITDA (a non-GAAP measure) represents earnings (losses) from continuing operations before income taxes (a GAAP measure), excluding goodwill impairment, interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is a measure of EBITDA as a percentage of net sales. |
The Clorox Company | |
Q3 | ||||||||
FY 2011 ($ millions) |
FY 2010 ($ millions) |
Change ($ millions) |
Days (5) FY 2011 |
Days (5) FY 2010 |
Change | |||
Receivables, net | $499 | $550 | -$51 | 32 | 34 | -2 days | ||
Inventories, net | $435 | $390 | +$45 | 52 | 48 | +4 days | ||
Accounts payable (1) | $360 | $341 | +$19 | 41 | 40 | +1 days | ||
Accrued liabilities | $452 | $475 | -$23 | |||||
Total WC (2) | $162 | $175 | -$13 | |||||
Total WC % net sales (3) | 3.1 | % | 3.4 | % | ||||
Average WC (2) | $127 | $159 | -$32 | |||||
Average WC % net sales (4) | 2.4 | % | 3.1 | % |
(1) | Days of accounts payable is calculated as follows: average accounts payable / [(cost of products sold + change in inventory) / 90]. | |
(2) | Working capital (WC) is defined in this context as current assets minus current liabilities excluding cash, assets held for sale, and short-term debt, based on end of period balances. Average working capital represents a two-point average of working capital. | |
(3) | Represents working capital at the end of the period divided by annualized net sales (current quarter net sales x 4). | |
(4) | Represents a two-point average of working capital divided by annualized net sales (current quarter net sales x 4). | |
(5) | Days calculations based on a two-point average. | |
The Clorox Company | |
Gross Margin Change vs. Prior Year (basis points) | ||||||||
Driver | FY10 | FY11 | ||||||
Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | |
Cost Savings | +170 | +160 | +170 | +220 | +180 | +200 | +180 | +180 |
Price Changes | +170 | +80 | +60 | +60 | +90 | +80 | +100 | +60 |
Market Movement (commodities) | +240 | +300 | -120 | -260 | +30 | -180 | -150 | -150 |
Manufacturing & Logistics (1) | -40 | -80 | 0 | -30 | -30 | 0 | -80 | -100 |
Customer pick-up allowance | 0 | 0 | 0 | 0 | 0 | +20 | +20 | +30 |
All other (2) | -90 | -70 | -120 | -90 | -90 | -160 | -250 | -70 |
Impact of Auto Businesses sale adjustment (3) | -40 | -40 | -60 | -50 | -50 | -- | -- | -- |
Change vs prior year | +410 | +350 | -70 | -150 | +130 | -40 | -180 | -50 |
Memo: Gross Margin (%) | 44.7% | 43.5% | 44.6% | 44.3% | 44.3% | 44.3% | 41.7% | 44.1% |
(1) |
“Manufacturing & logistics” includes the change in the cost of diesel fuel.
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|
(2) |
“All other” includes all other drivers of gross margin change. Examples of drivers included: volume change, product mix, trade and consumer spending, restructuring and acquisition-related costs, foreign currency, etc. If a driver included in all other is deemed to be material in a given period, it will be disclosed as part of the company’s earnings release.
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(3) |
Fiscal 2010 gross margin changes reflect the reclassification of the Auto Businesses to discontinued operations in Q1 Fiscal 2011. Fiscal 2009 gross margins have not been adjusted for the sale of the Auto Businesses. Fiscal 2010 gross margin drivers have not changed and any differences to gross margin based on this reclassification are reflected here.
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The Clorox Company Updated: 5-3-11 |
|
Brand / Product | Average Price Change | Effective Date | |||
Home Care | |||||
Pine-Sol® cleaners | +13% | May 2008 | |||
Clorox Clean-Up® cleaners | +8% | August 2008 | |||
Formula 409® , Tilex® , and Clorox® Disinfecting Bathroom cleaners | +12% | August 2008 | |||
Liquid-Plumr® products | +9% | August 2008 | |||
Clorox® Toilet Bowl Cleaner and Clorox® ToiletWandTM products | +8 to +13% | August 2008 | |||
Green Works® cleaners | -7 to -21% | May 2010 | |||
Laundry | |||||
Clorox® liquid bleach | +10% | August 2008 | |||
Green Works® liquid detergent | approx. -30% | May 2010 | |||
Glad | |||||
Glad® trash bags (rescinded May 2009) | +7% | February 2008 | |||
GladWare® disposable containers (rescinded April 2009) | +7% | February 2008 | |||
Glad® trash bags (rescinded December 2008) | +10% | October 2008 | |||
Glad® trash bags | -10% | December 2008 | |||
GladWare® disposable containers | -7% | April 2009 | |||
Glad® trash bags | -7% | May 2009 | |||
Glad® trash bags | +5% | August 2010 | |||
Glad® trash bags | +10% | May 2011 | |||
Litter | |||||
Cat litter | +7 to +8% | August 2008 | |||
Cat litter | -8 to -9% | March 2010 | |||
Food | |||||
Hidden Valley Ranch® salad dressing | +7% | August 2008 | |||
Charcoal | |||||
Charcoal | +6% | January 2008 | |||
Charcoal and lighter fluid | +7 to +16% | January 2009 |