Clorox Earnings Exceed Second-Quarter Expectations.Business Editors OAKLAND, Calif.--(BUSINESS WIRE)--Feb. 5, 2002 The Clorox Company (NYSE NYSE See: New York Stock Exchange :CLX (library, graphics) CLX - The Common Lisp library providing a low-level interface to the X Window System, equivalent to Xlib. Graphics toolkits can be built on top of CLX, e.g. McCLIM, Garnet, CLUE and CLIO. )(PSE PSE 1. pale soft exudative pork. 2. portosystemic encephalopathy. :CLX) today announced that it exceeded analysts' consensus earnings estimates for its fiscal second quarter. Driven by continued strength in the company's Glad and cat litter Cat litter (often called kitty litter) is one of any of a number of materials used in litter boxes to absorb moisture from cat feces and urine, which reduces foul odors such as ammonia and renders them more tolerable within the home. businesses, record second-quarter Kingsford charcoal charcoal, substance obtained by partial burning or carbonization (destructive distillation) of organic material. It is largely pure carbon. The entry of air during the carbonization process is controlled so that the organic material does not turn to ash, as in a and Armor All auto care shipments, and significant progress on cost-saving initiatives, the company also exceeded its previously announced earnings guidance for the quarter. "Despite significant external events, Clorox delivered solid results in the second quarter, demonstrating that our investment in media spending to fuel growth and our margin-improvement and cost-saving initiatives are working," said Chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Craig Sullivan Craig Sullivan, American Known for being an Exceptional EMS Director Currently operating a successful EMS in Boone NC]. born and raised in Ashe County NC. Currently living in Zionville NC with wife and 3 kids External links
Net earnings for the quarter were $51 million, or 22 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the fiscal second quarter ended Dec. 31, 2001, compared with net earnings of $64 million, or 27 cents per diluted share, in the prior-year quarter. Before special charges, on a pro-forma basis, earnings increased 24 percent to $92 million, or 39 cents per diluted share, compared with earnings of $74 million, or 31 cents per diluted share, before special charges, in the prior-year quarter. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the quarter increased 3 percent to $901 million, compared with $876 million in the prior-year quarter, and overall net volume rose 2 percent. Overall volume, excluding the April 2001 divestiture The breakup of AT&T. By federal court order, AT&T divested itself on January 1, 1984 of its 23 operating companies, which became known as the Regional Bell Operating Companies (RBOCs). of the company's fire logs business, increased 4 percent, reflecting solid performance in all segments, partially offset by the impact of Kmart's financial difficulties and economic conditions in Argentina. Driven by volume growth and favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. mix, second-quarter sales, excluding foreign-currency effects and the fire logs business, rose 5 percent versus the year-ago period. Separately, the company today announced it has sold its Maxforce professional insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides business to Aventis Environmental Science of Lyon, France. Terms of the transaction were not disclosed. The sale will result in a one-time, pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain of $36 million in the third quarter, which has not been reflected in Clorox's earnings guidance to date. As previously announced, effective July 1, 2001, Clorox adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ." Following its adoption of the accounting standard, the company has completed a review of its domestic businesses, and concluded that there are no impairments in the carrying amounts of the goodwill and intangible assets associated with its U.S. businesses. Clorox is continuing to review the investments it has made in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. over the past 10 years, and, in the second quarter, took a $39 million pretax charge to write down the carrying amount associated with its business in Colombia. In the second quarter, Clorox recorded a currency translation adjustment on net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. of $63 million, net of tax, reflecting a 38 percent currency devaluation Currency devaluation A deliberate downward adjustment in the official exchange rates established, or pegged, by a government against a specified standard, such as another currency or gold. of the Argentina peso. This non-cash adjustment to the balance sheet reduced stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. . The company is taking steps to mitigate the impact of the Argentina devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. and resulting economic crisis. Subject to the success of these steps, the company will evaluate whether it will need to record an asset-impairment charge for its Argentina business. In addition to the special charge related to the write-down for Colombia, the company also took $27 million in pretax charges in the quarter, primarily related to reducing the size of its workforce and closing the Chicago S Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. .O.S plant. Total special charges for the second quarter, net of a $3 million favorable inventory adjustment, were $63 million. These special charges are included in the $200 million of special charges the company previously announced it would take by the end of calendar year 2001. Second-Quarter Results by Segment A summary of key results by business segment follows. Unless otherwise noted, comparisons are with the second quarter of fiscal 2001.
Household Products-North America
-- 3% growth in volume
-- 3% growth in sales
-- 1% decline in pretax earnings before special charges, 4%
growth including special charges
Volume and sales growth in this segment were primarily fueled by strong performance from Glad as the brand posted its highest volume increases since Clorox acquired the business in January 1999. Recent GladWare product introductions resulted in distribution gains and record volumes for Clorox's line of disposable containers. Increased advertising and improved consumer value resulted in share gains across all bags and wraps categories. Clorox liquid bleach Noun 1. liquid bleach - a solution containing bleaching agents; used for laundry solution - a homogeneous mixture of two or more substances; frequently (but not necessarily) a liquid solution; "he used a solution of peroxide and water" , disinfecting wipes and toilet bowl cleaner each posted strong volume gains, while Brita faucet-mount water filtration systems and filters achieved record second-quarter volume. Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: laundry care products and declines in a number of home care brands due to intense competitive activity partially offset growth throughout most of the segment.
Household Products-Latin America and Other
-- 4% growth in volume
-- 1% growth in sales
-- 16% decline in pretax earnings before special charges, 184%
decline including special charges
In the second quarter, shipments in Latin America were up strongly through November, but declined sharply in late December as a result of Argentina's economic crisis. Fragranced cleaners, notably the Poett brand, continued to be a major driver of volume in Latin America, gaining share across the region. Increased demand for bleach bleach Solid or liquid chemical compound used to whiten or remove the natural colour of fibres, yarns, paper, and textile fabrics. Sunlight was the chief bleaching agent up to the discovery of chlorine in 1774 by Karl Wilhelm Scheele (b. 1742—d. also contributed positively to the segment's results. Excluding foreign-currency effects in Australia, Brazil, Canada and Chile, sales in this segment increased 6 percent. Increased advertising and trade spending, and the write-down of assets in Colombia had a significant negative impact on segment profits.
Specialty Products
-- 0% growth in volume
-- 5% growth in sales
-- 8% growth in pretax earnings before special charges, 15%
growth including special charges
Excluding base-period volume from the divested fire logs business, volume in this segment posted a 5 percent increase, reflecting healthy gains in charcoal, cat litter and auto care, partially offset by a decline in dressings and sauces. Kingsford charcoal achieved share gains and a third consecutive quarter of record volume behind increased advertising and merchandising, a narrowing private label price gap and warm weather. Increased promotions, advertising and merchandising activity led to solid volume gains in cat litter with double-digit shipment increases in Fresh Step litter litter /lit·ter/ (lit´er) stretcher. lit·ter n. 1. A flat supporting framework, such as a piece of canvas stretched between parallel shafts, for carrying a disabled or dead person; a and solid gains in Scoop Away. Fresh Step regular and Fresh Step crystals cat litters posted all-time-record second-quarter volumes. Significant volume growth in auto care, led by Armor All cleaning and protectant protectant /pro·tec·tant/ (pro-tek´tant) protective. protectant, protective 1. affording defense or immunity. 2. an agent affording defense against harmful influence. wipes, was partially offset by declines in fuel additives due to warm weather this quarter versus unseasonably cold weather in the prior-year quarter. The increase in segment profits was driven by overall volume growth (excluding fire logs), favorable mix and benefits from cost-saving activities. Outlook Looking ahead to the second half of the fiscal year, Sullivan said: "We expect fiscal-year sales and volume growth in the low- to mid-single digits, which takes into consideration Kmart's bankruptcy and economic conditions in Argentina, as well as the sale of Maxforce. We're very encouraged by the improvements we're making in our cost structure and expect this to continue. As a result, and given our strong second-quarter earnings performance, we now expect to deliver full-year earnings of $1.84-$1.87 per share, before special charges, which represents the upper end of the range we previously communicated." Estimated fiscal 2002 earnings of $1.84-$1.87 per share exclude the impact of special charges taken in calendar year 2001, the gain or loss on any divestitures or potential divestitures, and the potential asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges described above. The Clorox Company is a $3.9 billion multinational manufacturer and marketer of household products and products for institutional markets. Except for historical information, matters discussed above, including statements about future volume, sales and earnings growth, profitability, costs, cost savings or expectations, are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. based on management's estimates, assumptions and projections. Important factors that could cause results to differ materially from management's expectations are described in "Forward-Looking Statements and Risk Factors" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operation" in the company's SEC Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ending June 30, 2001, as updated from time to time in the company's SEC filings. Those factors include, but are not limited to, general economic and marketplace conditions and events, the company's costs, disruption associated with staff reductions, risks inherent in litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. , the success of new products, integration of acquisitions, and environmental, regulatory and intellectual property matters. Today, Clorox will host a live audio webcast of a discussion with the investment community regarding the company's second-quarter results and its outlook going forward. The webcast, which can be accessed at www.clorox.com/investors, will begin at 10:30 a.m. PST PST Paroxysmal supraventricular tachycardia, see there (1:30 p.m. EST P.M. also p.m. or p.m. abbr. post meridiem Usage Note: By definition, 12 a.m. ). A replay of the webcast will be archived for one week on the company's Web site.
THE CLOROX COMPANY
Statements of Consolidated Earnings (Unaudited)
(In millions, except earnings-per-share amounts)
Three Months Ended Six Months Ended
----------------------- -----------------------
12/31/01 12/30/00 12/31/01 12/30/00
--------- --------- --------- ---------
Net sales $ 901 $ 876 $ 1,892 $ 1,839
Cost of products
sold 514 524 1,080 1,073
--------- --------- --------- ---------
Gross profit 387 352 812 766
Selling and
administrative
expenses 135 128 270 251
Advertising costs 78 78 178 166
Research and
development costs 16 17 32 31
Restructuring and
asset impairment
costs 66 4 106 4
Interest expense 12 23 24 49
Other (income)
expense, net 1 3 (4) 11
--------- --------- --------- ---------
Earnings before
income taxes and
cumulative effect
of change in
accounting
principle 79 99 206 254
Income taxes 28(a) 35 76(a) 90
--------- --------- --------- ---------
Earnings before
cumulative effect
of change in
accounting
principle 51 64 130 164
Cumulative effect
of change in
accounting
principle
(FAS 133) -- -- -- (2)
--------- --------- --------- ---------
Net Earnings $ 51 $ 64 $ 130 $ 162
========= ========= ========= =========
Net earnings
before special
charges $ 92 $ 74 $ 200 $ 172
Special charges --
restructuring,
asset impairment
and inventory
costs (b) 41 10 70 10
--------- --------- --------- ---------
Net earnings after
special charges $ 51 $ 64 $ 130 $ 162
========= ========= ========= =========
Earnings per Common Share
Net Earnings
Basic $ 0.22 $ 0.27 $ 0.56 $ 0.69
Diluted 0.22 0.27 0.55 0.68
Net Earnings
before special
charges and
cumulative
effect of
change in
accounting
principle
Basic $ 0.40 $ 0.31 $ 0.86 $ 0.74
Diluted 0.39 0.31 0.85 0.73
Weighted Average Shares Outstanding (in thousands)
Basic 232,763 236,069 233,871 235,796
Diluted 235,920 239,093 237,063 238,956
(a) The effective tax rate before special charges for the three and
six months ended December 31, 2001, was 34.9% and 35%,
respectively.
(b) Net of tax of $22 million and $32 million for the three and six
months ended December 31, 2001, and $6 million for the three and
six months ended December 31, 2000.
The Clorox Company Segment Information (1)
Earnings
Before
Net Sales Chg. vs. Income Taxes Chg. vs.
(millions) year ago (millions) year ago
---------------------------------------------------
Household Products:
North America $ 506 3% $ 125 4%
Latin America/Other 152 1% (26) -184%
Specialty Products 243 5% 84 15%
Corporate -- -- (104) 17%
----- ----- ----- -----
Total $ 901 3% $ 79 -20%
===== ===== ===== =====
Earnings
Before Special
Charges and
Income Taxes Chg. vs.
(millions) year ago
------------------------------
Household Products:
North America $ 130 -1%
Latin America/Other 26 -16%
Specialty Products 84 8%
Corporate (98) 21%
Total $ 142 23%
===== =====
(1) Starting in 2002, the Glad business unit, previously reported
under the Specialty Products segment, is now reported under the
Household Products-North America segment, and the European
automotive care businesses, previously reported under the
Household Products-Latin America/Other segment, is now reported
under the Specialty Products segment. Operating segment
information presented above reflects the Company's current
organization structure, including this change.
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