UNITED
STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
________________
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 OR
15(d) of the Securities Exchange Act of 1934
Date of Report (Date of
earliest event reported): May 1, 2015
THE CLOROX
COMPANY
(Exact name of registrant
as specified in its charter)
________________
| Delaware |
|
1-07151 |
|
31-0595760 |
| (State or other jurisdiction of |
|
(Commission File Number) |
|
(I.R.S. Employer |
| incorporation) |
|
|
|
Identification No.) |
1221 Broadway, Oakland,
California 94612-1888
(Address of principal executive offices) (Zip
code)
(510)
271-7000
(Registrant's
telephone number, including area code)
Not
applicable
(Former name or
former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
| [ ] |
Written communications pursuant to
Rule 425 Under the Securities Act (17 CFR 230.425) |
| [ ] |
Soliciting material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
| [ ] |
Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 2.02 Results of Operations and Financial
Condition
On May 1, 2015, The Clorox
Company issued a press release announcing its financial results for its third
quarter ended March 31, 2015. The full text of the press release is attached
hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 7.01 Regulation FD
Disclosure
Attached hereto as Exhibit
99.2 and incorporated herein by reference is supplemental financial
information.
Item 9.01 Financial
Statements and Exhibits
(d) Exhibits
| Exhibit |
|
Description |
| 99.1 |
|
Press Release
dated May 1, 2015 of The Clorox Company |
| 99.2 |
|
Supplemental
information regarding financial results |
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
THE CLOROX
COMPANY |
| |
| |
| Date:
May 1, 2015 |
By:
|
|
/ s/ Laura Stein |
|
|
|
Executive Vice
President – |
|
|
|
General
Counsel |
THE CLOROX COMPANY
FORM 8-K
INDEX TO EXHIBITS
| Exhibit |
Description |
| 99.1 |
Press Release
dated May 1, 2015 of The Clorox Company |
| 99.2 |
Supplemental
information regarding financial results |
| PRESS RELEASE |
 |
| |
The Clorox Company Reports 3 Percent Sales
Growth in Q3; Updates Fiscal Year 2015 Outlook for Sales and EPS
OAKLAND, Calif., May 1, 2015 – The Clorox
Company (NYSE:CLX) today reported sales growth of 3 percent and a decrease of 5
percent diluted net earnings per share (EPS) from continuing operations for its
third quarter, which ended March 31, 2015. On a currency-neutral basis, sales
grew 5 percent.
“I’m pleased we delivered strong results
in the third quarter, allowing us to raise our fiscal year sales outlook and
update our EPS outlook,” said Chief Executive Officer Benno Dorer. “All U.S.
segments contributed to sales growth, and sales for International grew strongly
on a currency-neutral basis. Importantly, our continued incremental investments
in demand building, including meaningful innovation, are paying off, as we saw
the highest market share growth in about four years.
“In addition, the company delivered gross
margin expansion in the quarter, demonstrating that we’re on track with our
strategy to deliver growth profitably through strong cost savings programs and
price increases.
“As we look to the remainder of the year and into fiscal 2016,
I believe we have the right plans in place to address the challenges we continue
to anticipate, including increasingly unfavorable foreign currencies and slowing
international economies.”
All results in this press release are reported on a
continuing operations basis, unless otherwise stated. As previously announced,
Corporación Clorox de Venezuela S.A. (Clorox Venezuela) discontinued operations
effective Sept. 22, 2014. For the current and year-ago quarters, the results
from Clorox Venezuela are now included in discontinued operations in the
company’s financial statements. Some information in this release is reported on
a non-GAAP basis. See “Non-GAAP Financial Information” below and the tables
toward the end of this press release for more information and reconciliations of
key third-quarter results to the most directly comparable financial measures
calculated in accordance with generally accepted accounting principles in the
U.S. (GAAP).
Fiscal Third-Quarter
Results
Following is a summary of key
third-quarter results. All comparisons are with the third quarter of fiscal year
2014, unless otherwise stated.
| * |
$1.08 diluted EPS (5%
decrease) |
| * |
1% volume growth |
| * |
3% sales
growth |
In the third quarter, Clorox delivered
earnings from continuing operations of $144 million, or $1.08 diluted EPS,
compared to $151 million, or $1.14 cents diluted EPS, in the year-ago quarter.
Third-quarter results reflected higher performance-based incentive compensation
costs as the company anticipates exceeding its annual incentive targets; whereas
in the prior-year, earnings benefitted from a 12-cent impact when the company
fell significantly below these targets.
The impact of incentive compensation costs is
reflected in selling and administrative expenses, cost of products sold, and
research and development on the income statement. Third-quarter diluted EPS was
also negatively impacted by higher manufacturing and logistics costs, increased
investments in total demand-building programs and the impact of unfavorable
foreign currency exchange rates. These factors were partially offset by higher
sales, as well as the benefit of cost savings and price increases. Third-quarter
commodity costs were flat.
In the third quarter, sales grew 3 percent, reflecting the benefit of price increases, favorable mix and assortment and higher volume. These factors were partially offset by 2 percentage points of unfavorable foreign currency exchange rates and 1 percentage point of increased trade promotion spending. Volume for the third quarter increased 1 percent, reflecting growth in the Cleaning, Lifestyle and International segments.
The company’s third-quarter gross margin
increased 110 basis points to 43.2 percent, reflecting the benefits of cost
savings and price increases, favorable mix and assortment and flat commodity
costs. These factors were partially offset by higher manufacturing and logistics
costs and higher incentive compensation costs.
Fiscal year-to-date net cash provided by
continuing operations was $481 million, compared with $444 million in the
year-ago period, an increase of 8 percent. Contributing factors include lower
incentive compensation and tax payments in the current period, as well as the
initial funding of the company’s non-qualified deferred compensation plan in the
year-ago period. These benefits were partially offset by $25 million in payments
to settle interest-rate hedges related to the company's issuance of long-term
debt in December 2014. The company continues to use its cash flow to invest in
its business, maintain debt leverage within its targeted range and return excess
cash to stockholders through dividends and share repurchases. Fiscal-year-to
date, the company has repurchased about 1.5 million shares of its common stock
at a cost of approximately $158 million.
Discontinued
Operations
In the third quarter, the company
recognized $30 million of previously unrecognized tax benefits in discontinued
operations upon the expiration of the applicable statute of limitations.
Recognition of these previously disclosed tax benefits had no impact on the
company’s cash flows or earnings from continuing operations.
Key Segment Results
Following is a summary of key
third-quarter results from continuing operations by reportable segment. All
comparisons are with the third quarter of fiscal year 2014, unless otherwise
stated.
Cleaning
(Laundry, Home Care, Professional
Products)
| ● |
1% volume growth |
| ● |
1% sales growth |
| ● |
8% pretax earnings
growth |
Volume growth in the segment was driven
primarily by gains in Home Care, reflecting double-digit volume growth of
Clorox® disinfecting wipes behind increased merchandising support and
product innovation, as well as record shipments of toilet cleaners. Laundry
volume results reflected lower shipments of Green Works® laundry
detergent and lower shipments of Clorox bleach primarily due to the impact of
the recent price increase. Home Care and Laundry grew market share in total,
with gains across multiple brands. Pretax earnings growth reflected higher
volume, as well as the benefit of cost savings and price increases, partially
offset by an increase in demand-building investments.
Household
(Bags and Wraps, Charcoal, Cat
Litter)
| ● |
Flat volume |
| ● |
5% sales growth |
| ● |
34% pretax earnings
growth |
Segment volume results reflected
double-digit growth in Charcoal on top of high single-digit growth in the
year-ago quarter. Charcoal’s strong results were driven primarily by increased
merchandising support in anticipation of the grilling season. Offsetting factors
include decreased shipments in Bags & Wraps, primarily due to the impact of
price increases and lower shipments in Cat Litter, largely due to continuing
competitive activity. The variance between volume and sales results was due
primarily to the benefit of price increases in Bags & Wraps. Pretax earnings growth
reflected higher
sales, significant cost savings and the benefit of price increases. These
factors were partially offset by higher logistics costs and an increase in
demand-building investments.
Lifestyle
(Dressings and Sauces, Water Filtration,
Natural Personal Care)
| ● |
2% volume growth |
| ● |
3% sales growth |
| ● |
6% pretax earnings
growth |
Volume results in the segment were driven
by gains in Natural Personal Care, largely due to product innovation in Burt’s
Bees® lip and face-care products, including lip crayons and Renewal
face products. Dressings and Sauces also grew volume primarily from increased
distribution of Hidden Valley® dry mixes and dips. These results were
partially offset by lower shipments in Water Filtration due to continued
competitive activity and category softness.
Pretax earnings growth reflected lower commodity
costs, higher volume and the benefit of cost savings, partially offset by higher
manufacturing and logistics and an increase in demand-building
investments.
International
(All countries outside of the
U.S.)
| ● |
1% volume growth |
| ● |
Flat sales (10% growth,
currency-neutral basis) |
| ● |
26% pretax earnings decrease |
The segment’s volume growth reflected
gains in Mexico and Canada, partially offset by lower shipments in Argentina and
Asia. Segment sales reflected the impact of unfavorable foreign currency
exchange rates across most countries, offset by the benefit of price increases,
favorable mix and assortment and higher volume. On a currency-neutral basis,
segment sales grew 10 percent. Pretax earnings decreased $6 million primarily
due to increases in selling and administrative expenses, driven by inflation and
higher performance-based incentive compensation costs; the impact of unfavorable
foreign currency exchange rates; higher manufacturing and logistics costs; and
higher commodity costs. These factors were partially offset by the benefit of
price increases, favorable mix and assortment and the benefit of cost
savings.
Clorox Updates Outlook for Fiscal Year
2015
| ● |
1% to 2% sales growth
(previously about 1% sales growth) |
| ● |
EBIT margin about flat
(unchanged) |
| ● |
$4.45
to $4.55 diluted EPS range (previously $4.40 to
$4.55) |
The company now anticipates fiscal-year
2015 sales to grow in the range of 1 percent to 2 percent. Clorox’s updated
sales outlook reflects stronger results through the third quarter and more than
2 percentage points of impact from unfavorable foreign currency exchange rates.
Other moderating factors include slowing economies in international markets and
an increase in trade-promotion spending to drive the company’s core business and
trial of new products in a highly competitive environment.
Clorox continues to anticipate moderate
gross margin expansion in fiscal year 2015, reflecting the benefit of cost
savings and price increases. The company continues to anticipate commodity costs
to be about flat due to energy cost declines. Offsetting factors to gross margin
expansion include higher logistics costs, as well as the aforementioned increase
in trade-promotion spending.
Clorox continues to anticipate EBIT margin
to be about flat for fiscal year 2015, reflecting moderate gross margin
expansion, offset by higher performance-based incentive compensation costs. The
company’s fiscal-year EBIT margin also reflects higher demand-building
investments.
Clorox continues to anticipate its
effective fiscal year 2015 tax rate to be about 34 percent.
Net of all these factors, Clorox now
anticipates fiscal year 2015 diluted EPS from continuing operations in the range
of $4.45 to $4.55.
For More Detailed Financial Information
Visit the Investors: Financial Reporting:
Financial Results section of the company’s website at TheCloroxCompany.com for the following:
| * |
Combined financial tables that include the schedules below |
| * |
Supplemental unaudited condensed volume and sales growth information |
| * |
Supplemental unaudited condensed gross margin driver information |
| * |
Supplemental unaudited reconciliation of
certain non-GAAP financial information, including earnings from continuing
operations before interest and taxes (EBIT) and earnings from continuing
operations before interest, taxes, depreciation and amortization
(EBITDA) |
| * |
Supplemental balance sheet and cash flow
information and free cash flow reconciliation (unaudited) |
| * |
Supplemental price-change
information |
Note: Percentage and basis-point changes
noted in this press release are calculated based on rounded numbers.
Supplemental materials are available in the Investors: Financial Reporting:
Financial Results section of the company’s website at TheCloroxCompany.com.
The Clorox Company
The Clorox Company is a leading
multinational manufacturer and marketer of consumer and professional products
with about 7,700 employees worldwide and fiscal year 2014 sales of $5.5 billion.
Clorox markets some of the most trusted and recognized consumer brand names,
including its namesake bleach and cleaning products; Pine-Sol®
cleaners; Liquid Plumr® clog removers; Poett® home care
products; Fresh Step® cat litter; Glad® bags, wraps and
containers; Kingsford® charcoal; Hidden Valley® and KC
Masterpiece® dressings and sauces; Brita® water-filtration
products and Burt’s Bees® natural personal care products. The company
also markets brands for professional services, including Clorox
Healthcare®, HealthLink®, Aplicare® and
Dispatch® infection control products for the healthcare industry.
More than 80 percent of the company's brands hold the No. 1 or No. 2 market
share positions in their categories. Clorox's commitment to corporate
responsibility includes making a positive difference in its communities. In
fiscal year 2014, The Clorox Company and The Clorox Company Foundation
contributed more than $16 million in combined cash grants, product donations,
cause marketing and employee volunteerism. For more information, visit
TheCloroxCompany.com.
Forward-Looking
Statements
This press release contains
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, and such forward-looking statements involve risks and uncertainties.
Except for historical information, matters discussed above, including statements
about future volume, sales, costs, cost savings, earnings, cash flows, plans,
objectives, expectations, growth, or profitability, are forward-looking
statements based on management's estimates, assumptions and projections. Words
such as "could," "may," "expects," "anticipates," "targets," "goals,"
"projects," "intends," "plans," "believes," "seeks," "estimates," and variations
on such words, and similar expressions, are intended to identify such
forward-looking statements. These forward-looking statements are only
predictions, subject to risks and uncertainties, and actual results could differ
materially from those discussed above. Important factors that could affect
performance and cause results to differ materially from management's
expectations are described in the sections entitled "Risk Factors" in the
company's Annual Report on Form 10-K for the fiscal year ended June 30, 2014,
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" in Exhibit 99.2 of the Company’s Current Report on Form 8-K filed on
December 4, 2014, as updated from time to time in the company's SEC filings.
These factors include, but are not limited to: risks related to international
operations, including political instability; government-imposed price controls
or other regulations; foreign currency exchange rate controls, including
periodic changes in such controls, fluctuations and devaluations; labor unrest
and inflationary pressures, particularly in Argentina and other challenging
markets; risks related to the possibility of nationalization, expropriation of
assets, or other government action in foreign jurisdictions; risks related to
the Company’s discontinuation of operations in Venezuela; intense competition in
the company's markets; changes in the company’s leadership; worldwide, regional
and local economic conditions and financial market volatility; volatility and
increases in commodity costs such as resin, sodium hypochlorite and agricultural
commodities and increases in energy, transportation or other costs; the ability
of the company to drive sales growth, increase price and market share, grow its
product categories and achieve favorable product and geographic mix; dependence
on key customers and risks related to customer consolidation and ordering
patterns; costs resulting from government regulations; the ability of the
company to successfully manage global political, legal, tax and regulatory
risks, including changes in regulatory or administrative activity; supply
disruptions and other risks inherent in reliance on a limited base of suppliers;
the ability of the company to implement and generate anticipated cost savings
and efficiencies; the success of the company's business strategies; the impact
of product liability claims, labor claims and other legal proceedings, including
in foreign jurisdictions and the company's litigation related to its
discontinued operations in Brazil; the ability of the company to develop and
introduce commercially successful products; risks relating to acquisitions, new
ventures and divestitures and associated costs, including the potential for
asset impairment charges, related to, among others, intangible assets and
goodwill; risks related to reliance on information technology systems, including
potential security breaches, cyber attacks or privacy breaches that result in
the unauthorized disclosure of consumer, customer, employee or company
information, or service interruptions; the company's ability to attract and
retain key personnel; the company's ability to maintain its business reputation
and the reputation of its brands; environmental matters including costs
associated with the remediation of past contamination and the handling and/or
transportation of hazardous substances; the impact of natural disasters,
terrorism and other events beyond the company's control; the company's ability
to maximize, assert and defend its intellectual property rights; any
infringement or claimed infringement by the company of third-party intellectual
property rights; the effect of the company's indebtedness and credit rating on
its operations and financial results; the company's ability to maintain an
effective system of internal controls; uncertainties relating to tax positions,
tax disputes and changes in the company's tax rate; the accuracy of the
company's estimates and assumptions on which its financial statement projections
are based; the company's ability to pay and declare dividends or repurchase its
stock in the future; and the impacts of potential stockholder
activism.
The company's forward-looking statements
in this press release are based on management's current views and assumptions
regarding future events and speak only as of their dates. The company undertakes
no obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise, except as
required by the federal securities laws.
Non-GAAP Financial
Information
This press release contains non-GAAP
financial information relating to sales growth, diluted EPS and EBIT margin. The
company has included reconciliations of these non-GAAP financial measures to the
most directly comparable financial measure calculated in accordance with GAAP.
See the end of this press release for these reconciliations.
The company disclosed these non-GAAP
financial measures to supplement its consolidated financial statements presented
in accordance with GAAP. These non-GAAP financial measures exclude certain items
that are included in the company’s results reported in accordance with GAAP,
including income taxes, interest income, interest expense and foreign exchange
impact. The exclusion of foreign exchange impact is also referred to as
currency-neutral. Management believes these non-GAAP financial measures provide
useful additional information to investors about trends in the company’s
operations and are useful for period-over-period comparisons. These non-GAAP
financial measures should not be considered in isolation or as a substitute for
the comparable GAAP measures. In addition, these non-GAAP measures may not be
the same as similar measures provided by other companies due to potential
differences in methods of calculation and items being excluded. They should be
read in connection with the company’s consolidated financial statements
presented in accordance with GAAP.
Media Relations
Aileen Zerrudo (510) 271-3075,
aileen.zerrudo@clorox.com
Kathryn Caulfield (510) 271-7209,
kathryn.caulfield@clorox.com
Investor Relations
Landon Dunn (510) 271-7256,
landon.dunn@clorox.com
Steve Austenfeld (510) 271-2270,
steve.austenfeld@clorox.com
For recent presentations made by company
management and other investor materials, visit Investor Events on the company’s
website.
Condensed Consolidated Statements of
Earnings (Unaudited)
Dollars in millions,
except per share amounts
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
3/31/2015 |
|
3/31/2014 |
|
3/31/2015 |
|
3/31/2014 |
| Net sales |
|
$ |
1,401 |
|
|
$ |
1,366 |
|
|
$ |
4,098 |
|
|
$ |
4,017 |
|
| Cost of products sold |
|
|
796 |
|
|
|
791 |
|
|
|
2,343 |
|
|
|
2,303 |
|
| Gross profit |
|
|
605 |
|
|
|
575 |
|
|
|
1,755 |
|
|
|
1,714 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Selling and administrative
expenses |
|
|
206 |
|
|
|
178 |
|
|
|
577 |
|
|
|
568 |
|
| Advertising costs |
|
|
124 |
|
|
|
120 |
|
|
|
372 |
|
|
|
362 |
|
| Research and development costs |
|
|
34 |
|
|
|
28 |
|
|
|
97 |
|
|
|
90 |
|
| Interest expense |
|
|
25 |
|
|
|
25 |
|
|
|
77 |
|
|
|
77 |
|
| Other income, net |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
- |
|
|
|
(4 |
) |
| Earnings from continuing operations before income
taxes |
|
|
217 |
|
|
|
226 |
|
|
|
632 |
|
|
|
621 |
|
| Income taxes on continuing
operations |
|
|
73 |
|
|
|
75 |
|
|
|
215 |
|
|
|
213 |
|
| Earnings from continuing operations |
|
|
144 |
|
|
|
151 |
|
|
|
417 |
|
|
|
408 |
|
| Earnings (losses) from discontinued
operations, net of tax |
|
|
30 |
|
|
|
(14 |
) |
|
|
(28 |
) |
|
|
(20 |
) |
| Net earnings |
|
$ |
174 |
|
|
$ |
137 |
|
|
$ |
389 |
|
|
$ |
388 |
|
| |
| Net earnings (losses) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.09 |
|
|
$ |
1.16 |
|
|
$ |
3.20 |
|
|
$ |
3.15 |
|
|
Discontinued operations |
|
|
0.22 |
|
|
|
(0.11 |
) |
|
|
(0.22 |
) |
|
|
(0.16 |
) |
| Basic net earnings
per share |
|
$ |
1.31 |
|
|
$ |
1.05 |
|
|
$ |
2.98 |
|
|
$ |
2.99 |
|
| |
| Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations |
|
$ |
1.08 |
|
|
$ |
1.14 |
|
|
$ |
3.14 |
|
|
$ |
3.10 |
|
|
Discontinued operations |
|
|
0.22 |
|
|
|
(0.10 |
) |
|
|
(0.21 |
) |
|
|
(0.16 |
) |
| Diluted
net earnings per share |
|
$ |
1.30 |
|
|
$ |
1.04 |
|
|
$ |
2.93 |
|
|
$ |
2.94 |
|
| |
| Weighted average shares outstanding (in
thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
131,833 |
|
|
|
129,318 |
|
|
|
130,566 |
|
|
|
129,743 |
|
|
Diluted |
|
|
134,115 |
|
|
|
131,555 |
|
|
|
133,090 |
|
|
|
132,004 |
|
Reportable Segment
Information
(Unaudited)
Dollars in
millions
|
|
|
|
|
|
|
|
|
|
|
Earnings (Losses) from
Continuing Operations |
| Third
Quarter |
|
Net Sales |
|
Before Income Taxes |
|
|
Three Months Ended |
|
|
|
|
Three Months Ended |
|
|
|
|
|
3/31/15 |
|
3/31/14 |
|
% Change (1) |
|
3/31/15 |
|
3/31/14 |
|
% Change (1) |
| Cleaning Segment
|
|
$ |
442 |
|
$ |
437 |
|
1
|
% |
|
$ |
100 |
|
|
$ |
93 |
|
|
8% |
|
| Household Segment |
|
|
451 |
|
|
428 |
|
5 |
% |
|
|
102 |
|
|
|
76 |
|
|
34% |
|
| Lifestyle Segment
|
|
|
243 |
|
|
237 |
|
3 |
% |
|
|
71 |
|
|
|
67 |
|
|
6% |
|
| International Segment |
|
|
265 |
|
|
264 |
|
0 |
% |
|
|
17 |
|
|
|
23 |
|
|
-26% |
|
| Corporate |
|
|
- |
|
|
- |
|
- |
|
|
|
(73 |
) |
|
|
(33 |
) |
|
121%
|
|
| Total Company |
|
$ |
1,401 |
|
$ |
1,366 |
|
3 |
% |
|
$ |
217
|
|
|
$ |
226
|
|
|
-4% |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (Losses) from
Continuing Operations |
| Year-to-Date |
|
Net Sales |
|
Before Income Taxes |
|
|
Nine Months Ended |
|
|
|
|
Nine Months Ended |
|
|
|
| |
|
3/31/15 |
|
3/31/14 |
|
% Change (1) |
|
3/31/15 |
|
3/31/14 |
|
% Change (1) |
| Cleaning Segment
|
|
$ |
1,359 |
|
$ |
1,348 |
|
1 |
% |
|
$ |
331 |
|
|
$ |
325 |
|
|
2% |
|
| Household Segment |
|
|
1,214 |
|
|
1,152 |
|
5 |
% |
|
|
205 |
|
|
|
169 |
|
|
21% |
|
| Lifestyle Segment
|
|
|
705 |
|
|
692 |
|
2 |
% |
|
|
200 |
|
|
|
189 |
|
|
6% |
|
| International Segment |
|
|
820 |
|
|
825 |
|
-1 |
% |
|
|
67 |
|
|
|
87 |
|
|
-23%
|
|
| Corporate |
|
|
- |
|
|
- |
|
- |
|
|
|
(171 |
) |
|
|
(149 |
) |
|
15% |
|
| Total Company |
|
$ |
4,098 |
|
$ |
4,017 |
|
2 |
% |
|
$ |
632 |
|
|
$ |
621 |
|
|
2% |
(2) |
| (1) |
Percentages based on rounded
numbers. |
| (2) |
The decrease was primarily due to higher performance-based
incentive compensation expenses compared to lower incentive compensation
expenses in the prior year when the company fell significantly below its
incentive targets |
Condensed Consolidated Balance
Sheets
Dollars in millions
|
3/31/2015 |
|
6/30/2014 |
|
3/31/2014 |
|
(Unaudited) |
|
|
|
|
|
(Unaudited) |
| ASSETS |
|
|
|
|
|
|
|
|
|
|
|
| Current
assets |
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash
equivalents |
$ |
378 |
|
|
$ |
329 |
|
|
$ |
364 |
|
| Receivables,
net |
|
528 |
|
|
|
546 |
|
|
|
551 |
|
| Inventories,
net |
|
440 |
|
|
|
386 |
|
|
|
447 |
|
| Other current
assets |
|
149 |
|
|
|
134 |
|
|
|
158 |
|
| Total
current assets |
|
1,495 |
|
|
|
1,395 |
|
|
|
1,520 |
|
| |
| Property, plant and equipment, net |
|
917 |
|
|
|
977 |
|
|
|
970 |
|
| Goodwill |
|
1,067 |
|
|
|
1,101 |
|
|
|
1,096 |
|
| Trademarks,
net |
|
535 |
|
|
|
547 |
|
|
|
547 |
|
| Other intangible assets, net |
|
52 |
|
|
|
64 |
|
|
|
67 |
|
| Other
assets |
|
162 |
|
|
|
174 |
|
|
|
174 |
|
| Total assets |
$ |
4,228 |
|
|
$ |
4,258 |
|
|
$ |
4,374 |
|
| |
| LIABILITIES
AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
|
|
| Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
| Notes and loans
payable |
$ |
70 |
|
|
$ |
143 |
|
|
$ |
394 |
|
| Current maturities of
long-term debt |
|
300 |
|
|
|
575 |
|
|
|
575 |
|
| Accounts
payable |
|
397 |
|
|
|
440 |
|
|
|
388 |
|
| Accrued
liabilities |
|
533 |
|
|
|
472 |
|
|
|
481 |
|
| Income taxes
payable |
|
- |
|
|
|
8 |
|
|
|
- |
|
| Total
current liabilities |
|
1,300 |
|
|
|
1,638 |
|
|
|
1,838 |
|
| Long-term
debt |
|
1,796 |
|
|
|
1,595 |
|
|
|
1,595 |
|
| Other liabilities |
|
733 |
|
|
|
768 |
|
|
|
764 |
|
| Deferred income
taxes |
|
97 |
|
|
|
103 |
|
|
|
124 |
|
| Total
liabilities |
|
3,926 |
|
|
|
4,104 |
|
|
|
4,321 |
|
| |
| Stockholders’
equity |
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
159 |
|
|
|
159 |
|
|
|
159 |
|
| Additional
paid-in capital |
|
762 |
|
|
|
709 |
|
|
|
699 |
|
| Retained earnings |
|
1,832 |
|
|
|
1,739 |
|
|
|
1,667 |
|
| Treasury
shares |
|
(1,970 |
) |
|
|
(2,036 |
) |
|
|
(2,054 |
) |
| Accumulated other comprehensive net losses |
|
(481 |
) |
|
|
(417 |
) |
|
|
(418 |
) |
| Stockholders’
equity |
|
302 |
|
|
|
154 |
|
|
|
53 |
|
| Total liabilities and stockholders’ equity |
$ |
4,228 |
|
|
$ |
4,258 |
|
|
$ |
4,374 |
|
The tables below present the
reconciliation of non-GAAP financial measures to the most directly comparable
financial measures calculated in accordance with GAAP and other supplemental
information. See “Non-GAAP Financial Information” above for further information
regarding the company’s use of non-GAAP financial measures.
The reconciliations below are on a
continuing operations basis
Third-Quarter and Fiscal Year-to-Date
Sales Growth Reconciliation
|
|
Q3 |
|
Q3 |
|
Q3 YTD |
|
Q3 YTD |
|
|
Fiscal |
|
Fiscal |
|
Fiscal |
|
Fiscal |
|
|
2015 |
|
2014 |
|
2015 |
|
2014 |
| Total Sales Growth –
GAAP |
|
2.6% |
|
-1.9% |
|
2.0% |
|
0.2% |
| Less: Foreign exchange |
|
-2.0 |
|
-2.9 |
|
-2.3 |
|
-2.1 |
| Currency Neutral Sales Growth -
Non-GAAP |
|
4.6% |
|
1.0% |
|
4.3% |
|
2.3% |
The reconciliations below for fiscal
year 2014 are provided as a reference point for the fiscal year 2015 outlook,
and reflect the reclassification of Clorox Venezuela to discontinued operations
in Q1FY15.
Fiscal Year EBIT Margin(1)
Reconciliation
|
|
FY |
|
|
Fiscal |
|
|
2014 |
| Earnings from continuing operations |
|
$ |
884 |
| before income taxes – GAAP |
|
|
|
| |
| Interest Income |
|
|
-3 |
| Interest Expense |
|
|
103 |
| |
| EBIT (1)
– Non-GAAP |
|
$ |
984 |
| |
| Net Sales |
|
$ |
5,514 |
| EBIT margin(1) –
Non-GAAP |
|
|
17.8% |
(1) EBIT represents earnings from
continuing operations before interest and taxes. EBIT margin is the ratio of
EBIT to net sales.
For Gross Margin Drivers, please
refer to the Supplemental Information: Gross Margin Driver page in the Financial
Results section of the company’s website TheCloroxCompany.com.
|
|
| The Clorox Company
|
Supplemental Unaudited Condensed Information – Volume Growth
Reportable
Segment |
% Change vs. Prior Year |
|
| FY14(1) |
FY15(1) |
Major Drivers of Change |
| Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
Q2 |
Q3 |
YTD |
|
| Cleaning |
0% |
3% |
-5% |
0% |
-1% |
-1% |
3% |
1% |
1% |
Q3 volume
increase driven by higher shipments in Home Care, primarily from
Clorox® Disinfecting Wipes,
several new product launches and Clorox® toilet
cleaners, partially offset by lower shipments of Green Works®
laundry detergent, as well as Clorox® bleach primarily due to the recent price
increase. |
| Household |
2% |
-1% |
5% |
-2% |
1% |
4% |
3% |
0% |
2% |
Q3 volume is
flat reflecting higher shipments in Kingsford® Charcoal, offset by lower shipments
in Bags and Wraps, primarily due to price increases, and Cat
Litter. |
| Lifestyle |
4% |
-1% |
-1% |
2% |
1% |
0% |
5% |
2% |
2% |
Q3 volume
increase driven by higher shipments of Burt’s Bee’s® lip and face care products and Hidden
Valley® salad dressings, partially offset by lower shipments of
Brita® products. |
| International |
1% |
3% |
1% |
2% |
2% |
5% |
5% |
1% |
4% |
Q3 volume
increase driven by higher shipments in Mexico and Canada, partially offset
by lower shipments in Argentina and Asia. |
| Total Company |
1% |
1% |
0% |
0% |
1% |
1% |
4% |
1% |
2% |
|
Supplemental Unaudited
Condensed Information – Sales Growth
Reportable
Segment |
% Change vs. Prior Year |
|
| FY14(1) |
FY15(1) |
Major Drivers of Change |
| Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
Q2 |
Q3 |
YTD |
|
| Cleaning |
1% |
2% |
-4% |
-1% |
0% |
-2% |
3% |
1% |
1% |
Q3 variance
between volume and sales was flat. |
| Household |
5% |
-1% |
4% |
-2% |
1% |
5% |
5% |
5% |
5% |
Q3 variance
between volume and sales driven by the benefit of price increases in Bags
and Wraps. |
| Lifestyle |
5% |
0% |
-3% |
2% |
1% |
-1% |
4% |
3% |
2% |
Q3 variance
between volume and sales driven by favorable mix and
assortment. |
| International |
-2% |
1% |
-6% |
-6% |
-3% |
0% |
-2% |
0% |
-1% |
Q3 variance
between volume and sales driven by unfavorable foreign currency exchange
rates, partially offset by the benefit of price increases and favorable
mix and assortment. |
| Total Company |
2% |
0% |
-2% |
-2% |
0% |
1% |
3% |
3% |
2% |
|
| (1) |
Volume growth and sales growth
percentage changes for the International reportable segment and Total Company
reflect the reclassification of Clorox
Venezuela to discontinued operations effective Q1 fiscal 2015 for all periods
presented. |
|
|
| The Clorox
Company |
Supplemental Unaudited
Condensed Information –
Gross
Margin
Drivers
The table below provides details on the drivers of gross margin change
versus the prior year.
|
Gross Margin Change vs. Prior Year (basis
points) |
| Driver |
FY14 |
FY15 |
|
Q1 |
Q2 |
Q3 |
Q4 |
FY |
Q1 |
Q2 |
Q3 |
| Cost
Savings |
+180 |
+150 |
+140 |
+110 |
+140 |
+120 |
+130 |
+170 |
| Price
Changes |
+80 |
+70 |
+80 |
+80 |
+80 |
+90 |
+100 |
+140 |
| Market
Movement (commodities) |
-110 |
-140 |
-120 |
-110 |
-120 |
-40 |
-90 |
- |
| Manufacturing & Logistics |
-140 |
-120 |
-120 |
-240 |
-160 |
-170 |
-90 |
-120 |
| All
other(1) |
-10 |
-20 |
-10 |
-10 |
-10 |
-70 |
-40 |
-80 |
Impact of Clorox Venezuela
reclassification
to discontinued
operations(2) |
+30 |
+10 |
- |
+40 |
+20 |
- |
- |
- |
| Change vs prior year |
+30 |
-50 |
-30 |
-130 |
-50 |
-70 |
+10 |
+110 |
| Gross Margin (%) |
43.5% |
42.4% |
42.1% |
42.9% |
42.7% |
42.8% |
42.5% |
43.2% |
| (1) |
In Q3 of
fiscal year 2015, ‘All other’ includes about -60bps for higher
performance-based incentive compensation costs vs. the year-ago
quarter. |
| (2) |
Other than
the impact of the Clorox Venezuela reclassification, none of the fiscal
year 2013 and 2014 gross margin drivers have changed; all effects of the
Clorox Venezuela reclassification to discontinued operations are reflected
in this line. |
|
| The Clorox
Company |
Supplemental Information – Balance
Sheet
(Unaudited)
As of March
31, 2015
(Adjusted to reflect Clorox
Venezuela reclassified to discontinued operations)
Working Capital Update
|
Q3 |
|
|
|
|
|
FY 2015
($ millions) |
FY 2014
($ millions) |
Change
($ millions) |
Days(5)
FY
2015 |
Days(5)
FY
2014 |
Change |
| Receivables, net |
$528 |
$551 |
-$23 |
32 |
35 |
-3 |
| Inventories |
$440 |
$447 |
-$7 |
50 |
52 |
-2 |
| Accounts
payable (1) |
$397 |
$388 |
$9 |
44 |
44 |
0 |
| Accrued
liabilities |
$533 |
$481 |
$52 |
|
|
|
| Total WC
(2) |
$187 |
$287 |
-$100 |
|
|
|
| Total WC
% net sales (3) |
3.3% |
5.3% |
|
|
|
|
| Average
WC (2) |
$203 |
$304 |
-$101 |
|
|
|
| Average
WC % net sales (4) |
3.6% |
5.6% |
|
|
|
|
Receivables,
net: Decrease driven primarily by
timing of sales and unfavorable foreign exchange rates.
Accrued
liabilities: Increase driven
primarily by year over year higher performance-based incentive compensation
costs.
| (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 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. |
Supplemental Information – Cash
Flow
(Unaudited)
For the quarter ended March
31, 2015
Capital expenditures for the
third quarter were $23 million versus $24 million in the year-ago quarter.
Depreciation and amortization for the third quarter was $41 million versus $43
million in the year ago quarter.
Net cash provided by continuing operations in
the third quarter was $214 million, or 15 percent of sales.
|
| The Clorox
Company |
Supplemental Unaudited Condensed
Information
Fiscal Year to Date Free Cash Flow
Reconciliation
|
|
Q3
Fiscal
YTD
2015 |
|
Q3
Fiscal
YTD
2014 |
| Net cash provided by continuing operations –
GAAP |
|
$481 |
|
$444 |
| Less: Capital
expenditures |
|
83 |
|
87 |
| Free cash flow – non-GAAP (1) |
|
$398 |
|
$357 |
| Free cash flow as a percent of sales – non-GAAP
(1) |
|
9.7% |
|
8.9% |
| Net
sales |
|
$4,098 |
|
$4,017 |
| (1) |
In
accordance with the 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 uses free cash flow and free cash
flow as a percent of sales to help assess the cash generation ability of
the business and funds available for investing activities, such as
acquisitions, investing in the business to drive growth, and financing
activities, including debt payments, dividend payments and share
repurchases. Free cash flow does not represent cash available only for
discretionary expenditures, since the Company has mandatory debt service
requirements and other contractual and non-discretionary expenditures. In
addition, free cash flow may not be the same as similar measures provided
by other companies due to potential differences in methods of calculation
and items being excluded. |
|
| The Clorox
Company |
Supplemental unaudited reconciliation
of earnings from continuing operations before income taxes to EBIT(1)(3)
and EBITDA (2)(3)
(Adjusted to reflect Clorox
Venezuela reclassified to discontinued operations)
Dollars in millions and
percentages based on rounded numbers
|
|
FY 2014 |
|
|
FY 2015 |
| |
|
|
|
|
|
Q1
|
|
Q2 |
|
Q3 |
|
Q4 |
|
FY |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
|
9/30/13 |
|
12/31/13 |
|
3/31/14 |
|
6/30/14 |
|
6/30/14 |
|
|
9/30/14 |
|
12/31/14 |
|
3/31/15 |
| Earnings from continuing operations |
|
$ |
211 |
|
|
$ |
184 |
|
$ |
226 |
|
|
$ |
263 |
|
|
$ |
884 |
|
|
|
$ |
218 |
|
|
$ |
197 |
|
|
$ |
217 |
|
| before income taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Interest
income |
|
|
(1 |
) |
|
|
- |
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(3 |
) |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
| Interest
expense |
|
|
26 |
|
|
|
26 |
|
|
25 |
|
|
|
26 |
|
|
|
103 |
|
|
|
|
26 |
|
|
|
26 |
|
|
|
25 |
|
| EBIT (1)(3) |
|
|
236 |
|
|
|
210 |
|
|
250 |
|
|
|
288 |
|
|
|
984 |
|
|
|
|
243 |
|
|
|
222 |
|
|
|
241 |
|
| EBIT margin (1)(3) |
|
|
17.6% |
|
|
|
16.1% |
|
|
18.3% |
|
|
|
19.2% |
|
|
|
17.8% |
|
|
|
|
18.0% |
|
|
|
16.5% |
|
|
|
17.2% |
|
| Depreciation
and amortization |
|
|
43 |
|
|
|
45 |
|
|
43 |
|
|
|
46 |
|
|
|
177 |
|
|
|
|
43 |
|
|
|
42 |
|
|
|
41 |
|
| EBITDA (2)(3) |
|
$ |
279 |
|
|
$ |
255 |
|
$ |
293 |
|
|
$ |
334 |
|
|
$ |
1,161 |
|
|
|
$ |
286 |
|
|
$ |
264 |
|
|
$ |
282 |
|
| EBITDA margin (2)(3) |
|
|
20.8% |
|
|
|
19.5% |
|
|
21.4% |
|
|
|
22.3% |
|
|
|
21.1% |
|
|
|
|
21.2% |
|
|
|
19.6% |
|
|
|
20.1% |
|
| Net
sales |
|
$ |
1,343 |
|
|
$ |
1,308 |
|
$ |
1,366 |
|
|
$ |
1,497 |
|
|
$ |
5,514 |
|
|
|
$ |
1,352 |
|
|
$ |
1,345 |
|
|
$ |
1,401 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total debt
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$2,313 |
|
|
|
|
$2,224 |
|
|
|
$2,672 |
|
|
|
$2,166 |
|
| Debt to EBITDA (3)(5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.0 |
|
|
|
|
1.9 |
|
|
|
2.3 |
|
|
|
1.9 |
|
| (1) |
EBIT (a
non-GAAP measure) represents earnings from continuing operations before
income taxes (a GAAP measure), excluding interest income and interest
expense, as reported above. EBIT margin is the ratio of EBIT to net
sales. |
| (2) |
EBITDA (a
non-GAAP measure) represents earnings from continuing operations before
income taxes (a GAAP measure), excluding interest income, interest
expense, depreciation and amortization, as reported above. EBITDA margin
is the ratio of EBITDA to net sales. |
| (3) |
In
accordance with the 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, EBITDA margin and debt to EBITDA provides
additional useful information to investors about current trends in the
business. |
| (4) |
Total debt
represents the sum of notes and loans payable, current maturities of
long-term debt, and long-term debt. |
| (5) |
Debt to
EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for
the trailing four quarters. The Company calculates debt to Consolidated
EBITDA for compliance with its debt covenants using Consolidated EBITDA
for the trailing four quarters, as contractually defined. |
| |
| The Clorox
Company |
|
| Updated: 5-1-15 |
|
U.S. Retail Pricing Actions from
CY2009 - CY2015
| Brand /
Product |
|
Average Price
Change |
|
Effective
Date |
| Home Care |
|
|
|
|
|
|
| Green Works® cleaners |
|
|
-7
to -21% |
|
|
May
2010 |
| Formula 409® |
|
|
+6% |
|
|
August 2011 |
| Clorox Clean-Up® cleaners |
|
|
+8% |
|
|
August 2011 |
| Clorox® Toilet Bowl Cleaner |
|
|
+5% |
|
|
August 2011 |
| Liquid-Plumr® products |
|
|
+5% |
|
|
August 2011 |
| Pine-Sol® cleaners |
|
|
|
|
|
|
| Clorox Clean-Up®, Formula 409®, |
|
|
+17% |
|
|
April 2012 |
| and Clorox® Disinfecting Bathroom spray
cleaners |
|
|
+5% |
|
|
March 2013 |
| Green Works® cleaners |
|
|
+21% |
|
|
July 2014 |
| Laundry |
|
|
|
|
|
|
| Green Works® liquid detergent |
|
|
approx. -30% |
|
|
May 2010 |
| Clorox® liquid bleach |
|
|
+12% |
|
|
August 2011 |
| Clorox 2® stain fighter and color
booster |
|
|
+5% |
|
|
August 2011 |
| Clorox® liquid bleach |
|
|
+7% |
|
|
February 2015 |
| Glad |
|
|
|
|
|
|
| GladWare® disposable containers |
|
|
-7% |
|
|
April 2009 |
| Glad® trash bags |
|
|
-7% |
|
|
May 2009 |
| Glad® trash
bags |
|
|
+5% |
|
|
August 2010 |
| Glad® trash bags |
|
|
+10% |
|
|
May 2011 |
| Glad® wraps |
|
|
+7% |
|
|
August 2011 |
| Glad® food bags |
|
|
+10% |
|
|
November 2011 |
| GladWare® disposable containers |
|
|
+8% |
|
|
July 2012 |
| Glad® trash bags |
|
|
+6% |
|
|
March 2014 |
| Glad® ClingWrap |
|
|
+5% |
|
|
March 2014 |
| Glad® trash bags |
|
|
+6% |
|
|
November 2014 |
| Glad® wraps |
|
|
+5% |
|
|
January 2015 |
| Litter |
|
|
|
|
|
|
| Cat
litter |
|
|
-8
to -9% |
|
|
March 2010 |
| Cat litter |
|
|
+5% |
|
|
May 2012 |
| Food |
|
|
|
|
|
|
| Hidden Valley Ranch® salad dressing |
|
|
+7% |
|
|
August 2011 |
| Charcoal |
|
|
|
|
|
|
| Charcoal and lighter fluid |
|
|
+7 to +16% |
|
|
January 2009 |
| Charcoal and lighter fluid |
|
|
+8
to 10% |
|
|
January 2012 |
| Charcoal |
|
|
+6% |
|
|
December 2012 |
| Brita |
|
|
|
|
|
|
| Brita® pitchers |
|
|
+3% |
|
|
August 2011 |
| Brita® pitchers and filters |
|
|
+5% |
|
|
July 2012 |
| Natural Personal Care |
|
|
|
|
|
|
| Burt’s Bees® lip balm |
|
|
+10% |
|
|
July 2013 |
| |
|
|
|
|
|
|
| Notes: |
|
|
|
|
|
|
| ● |
Individual SKUs vary within the
range. |
| ● |
This
communication reflects pricing actions on primary items, and does not
reflect pricing actions on our Professional Products
business. |
Clorox (NYSE:CLX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Clorox (NYSE:CLX)
Historical Stock Chart
From Apr 2023 to Apr 2024
