Clorox Earns 40 Cents for 82% EPS Growth in Second Quarter.Business Editors OAKLAND, Calif.--(BUSINESS WIRE)--Feb. 11, 2003 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 strong 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 , gross margin, earnings, working capital reduction and cash flow results for the second quarter of fiscal year 2003 ended Dec. 31, 2002. Excluding divestitures, overall volume increased 3 percent, reflecting a 5 percent increase in the combined Household Products-North America and Specialty Products segments, partially offset by declines 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. . Also excluding divestitures, overall company net sales increased 7 percent. Including divestitures (that is, Himolene(R), Maxforce(R) and Jonny Cat(R)), overall company volume increased 1 percent and net sales increased 4 percent to $926 million compared to $887 million in the year-ago quarter. Clorox reported second-quarter net earnings of $89 million, or 40 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. This compares with net earnings of $51 million in the year-ago quarter, or 22 cents per diluted share, for an increase of 18 cents per diluted share, or 82 percent. The current period net earnings reflect a previously announced $30 million, or 11 cents per diluted share, asset-impairment charge for the company's Argentina business. The year-ago earnings include net charges of 17 cents per diluted share primarily related to goodwill 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 for the company's Latin America business, costs to close a manufacturing facility and workforce reductions. Second-quarter gross margin increased 340 basis points to 46.5 percent, contributing to a 13 percent increase in operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. due to sales growth, cost-saving activities and lower promotional expenses Noun 1. promotional expense - the cost of promoting a product business expense, trade expense - ordinary and necessary expenses incurred in a taxpayer's business or trade , partially offset by a 36 percent increase in advertising, higher R&D expenses and a shift in timing of plant maintenance activities. Further improvements in managing inventories and receivables resulted in working capital of -2.0 percent of net customer sales for the quarter. The company reported a 15 percent increase in cash provided by operations over the year-ago quarter, setting a new second-quarter record. During the quarter, Clorox acquired approximately 3.8 million shares of the company's common stock at a total cost of about $162 million. A portion of the shares purchased was allocated to the company's ongoing program to offset the potential impact of stock-option dilution. The remainder was allocated to the board-authorized $1 billion repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. program, bringing the total number of shares repurchased to approximately 13.8 million at a total cost of about $579 million under that program. "We're extremely pleased to report strong results," 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
The attached financial statements and schedules are reported solely in accordance with U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). To clarify the company's results with respect to prior-year periods, Clorox has posted additional details regarding previously reported earnings on the company's Web site at www.clorox.com/investors/qr.html. Second-Quarter Results by Business Segment A summary of key second-quarter results by segment follows. All comparisons are with second quarter fiscal year 2002. Household Products - North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. -- 3% volume growth, 5% growth excluding divestitures -- 8% sales growth, 10% growth excluding divestitures -- 19% pretax earnings growth New products, including the Clorox(R) ReadyMop(TM) self-contained mopping system, Clorox(R) Oxygen Action(TM) multipurpose mul·ti·pur·pose adj. Designed or used for several purposes: a multipurpose room; multipurpose software. multipurpose Adjective stain remover stain remover n → quitamanchas m inv stain remover n → détachant m stain remover stain n → and Pine-Sol(R) Orange Energy(TM) cleaner, drove volume growth in this segment. Also contributing to volume gains were Clorox(R) disinfecting wipes resulting from strong consumer demand, Brita(R) pour-through pitchers due to the launch of systems with electronic filter change indicators, Glad(R) trash bags, and GladWare(R) products due to a Hillshire Farm Hillshire Farm is a brand of meat products marketed by Sara Lee. External link
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. shipments from shifts to oxygen additives and timing of merchandising activities. Volume and sales gains, lower trade-promotion expenses, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix, and cost-saving initiatives, partially offset by increased advertising expenses, drove the segment's pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern earnings growth. Specialty Products -- 2% volume growth, 6% growth excluding divestitures -- 9% sales growth, 12% growth excluding divestitures -- 20% pretax earnings growth Volume growth was driven by record second-quarter shipments of Kingsford(R) 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 due to share gains and increased distribution; Hidden Valley(R) dressing due to increased advertising, merchandising and category growth; the launch of Scoop Away(R) plus crystals cat litter; and Fresh Step(R) cat litter as a result of promotional activities. Top-line growth, favorable product mix, increased cost savings and lower promotional spending drove the segment's pretax earnings growth. Household Products - Latin America & Other -- 9% volume decline, 8% decline excluding divestitures -- 16% sales decline, 16% decline excluding divestitures -- 68% pretax earnings improvement Continuing weak economic conditions in South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. drove volume declines in this segment. These decreases were partially offset by increased bleach and Lestoil(R) heavy-duty cleaner shipments in Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. . Segment earnings improved as a result of significant margin increases due to the steps Clorox is taking to mitigate conditions in South America, including executing cost-saving initiatives, increasing prices, reducing the size of the organization to improve the cost structure and reducing the number of product items. The company's efforts to aggressively manage working capital resulted in nearly a 7-point improvement as a percent of sales in its Latin America Division for the quarter. As previously announced, Clorox plans to sell its business in Brazil, and operating results of the business are presented on the statements of consolidated earnings as discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Outlook In the first half of fiscal year 2003, Clorox reviewed all of its businesses for impairment in accordance with accounting standard No. 142. For the third quarter, including a 2 percent negative impact from divestitures, Clorox expects volume to be about equal to or slightly below the year-ago quarter as the company anniversaries the introduction of Clorox(R) ReadyMop(TM). Sales are expected to lag volume due to promotional expenses associated with new product introductions. Clorox expects earnings per diluted share in the range of 49 cents to 52 cents (GAAP). This estimate reflects a 1 cent reduction due to an overall increase in the company's effective tax rate as a result of the second-quarter Argentina impairment charge. The third-quarter 2003 outlook compares with earnings per diluted share of 20 cents (GAAP) in the third quarter of fiscal year 2002. The year-ago earnings per share include net charges of 25 cents related to an asset-impairment charge for the company's business in Argentina partially offset by a pretax gain on divestitures. For the fourth quarter, including a 1 percent negative impact from divestitures, Clorox expects low-to-mid single-digit volume and sales growth compared with the year-ago quarter driven by new product introductions. Clorox expects earnings per diluted share in the range of 67 cents to 70 cents (GAAP). This estimate reflects a 2 cent reduction due to an overall increase in the company's effective tax rate as a result of the second-quarter Argentina impairment charge. The fourth-quarter 2003 outlook compares with 63 cents (GAAP) in the fourth quarter of fiscal year 2002. For fiscal 2003, the company continues to expect low-single-digit volume and sales growth. Clorox has increased its expectations for earnings per diluted share to the range of $2.21 to $2.27 (GAAP) compared with $1.37 (GAAP) in fiscal 2002. The increase from Clorox's previously announced expectations is due to the company's strong year-to-date results. Fiscal 2003 earnings expectations include an estimated reduction of 20 cents (of which 17 cents is reflected in first-half results) for noncash charges Noncash charge A cost, such as depreciation, depletion, and amortization, that does not involve any cash outflow. That is, this is treated as an accounting expense -- not a real expense that demands cash. associated with the company's Latin America business and related tax effects. The year-ago earnings per share include net charges of 55 cents primarily related to asset-impairment charges for the company's businesses in Latin America, costs associated with plant closures and costs associated with reducing the size of the company's workforce, which were partially offset by gains on divestitures. Today's Webcast Today, at 1:30 p.m. Eastern time, Clorox will host a live audio webcast of its discussion with the investment community regarding the company's results in the fiscal second quarter. The webcast can be accessed at www.clorox.com/investors. Following the live discussion, a replay of the webcast will be archived for one week on the company's Web site. Clorox to Webcast Presentation at CAGNY CAGNY Consumer Analyst Group of New York As previously announced, Clorox will broadcast its presentation at the Consumer Analysts Group of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (CAGNY) annual conference live via the Internet at approximately 4:30 p.m. Eastern time on Wednesday, Feb. 19, 2003. The live webcast, which can be accessed at www.clorox.com/investors, will feature Chairman and CEO Craig Sullivan and Chief Financial Officer Karen Rose. Following the live webcast, a replay will be archived for one week on the company's Web site. The Clorox Company The Clorox Company is a leading manufacturer and marketer of consumer products with fiscal year 2002 revenues of $4.0 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake name·sake n. One that is named after another. [From the phrase for the name's sake.] namesake Noun bleach and cleaning products, Armor All(R) and STP STP or standard temperature and pressure, standard conditions for measurement of the properties of matter. The standard temperature is the freezing point of pure water, 0°C; or 273.15°K;. (R) auto care products, Fresh Step(R) and Scoop Away(R) cat litters, Kingsford(R) charcoal briquets, Hidden Valley(R) and K C Masterpiece(R) dressings and sauces, and Glad(R) bags, wraps and containers. With 9,500 employees worldwide, the company manufactures products in 25 countries and markets them in more than 100 countries. Founded in 1980, The Clorox Company Foundation has awarded grants totaling more than $51 million to nonprofit organizations Nonprofit Organization An association that is given tax-free status. Donations to a non-profit organization are often tax deductible as well. Notes: Examples of non-profit organizations are charities, hospitals and schools. , schools and colleges; and in 2001-2002 made product donations valued at nearly $5 million. For more information about Clorox, visit the company's Web site at www.clorox.com. 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 ended June 30, 2002, 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, 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. and 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, the company's ability to manage and obtain the benefits of joint venture activities, the success of information systems design and implementation, integration of acquisitions, and environmental, regulatory and intellectual property matters.
THE CLOROX COMPANY
Statements of Consolidated Earnings (Unaudited)
In millions, except earnings-per-share amounts
Three Months Ended Six Months Ended
------------------- -------------------
12/31/02 12/31/01 12/31/02 12/31/01
--------- --------- --------- ---------
Net sales $926 $887 $1,973 $1,871
Cost of products sold 496 505 1,040 1,065
--------- --------- --------- ---------
Gross profit 430 382 933 806
Selling and administrative
expenses 131 133 247 264
Advertising costs 104 76 214 175
Research and development costs 18 16 33 32
Restructuring and asset
impairment costs 30 66 33 78
Interest expense 8 12 16 24
Other (income) expense, net (3) 4 3 2
--------- --------- --------- ---------
Earnings before income taxes
and discontinued operations 142 75 387 231
Income taxes 55 33 142 78
--------- --------- --------- ---------
Earnings from continuing
operations 87 42 245 153
Earnings from discontinued
operations, net of tax (1) 2 9 (11) (23)
--------- --------- --------- ---------
Net earnings $89 $51 $234 $130
========= ========= ========= =========
Earnings (losses) per common
share
Basic
Continuing
operations $0.40 $0.18 $1.11 $0.65
Discontinued
operations 0.01 0.04 (0.05) (0.09)
--------- --------- --------- ---------
$0.41 $0.22 $1.06 $0.56
========= ========= ========= =========
Diluted
Continuing
operations $0.39 $0.18 $1.10 $0.64
Discontinued
operations 0.01 0.04 (0.05) (0.09)
--------- --------- --------- ---------
$0.40 $0.22 $1.05 $0.55
========= ========= ========= =========
Weighted average shares
outstanding (in thousands)
Basic 218,334 232,763 220,108 233,871
Diluted 220,782 235,920 222,497 237,063
(1) Net of tax benefits of $1 and $7 for the three-month-periods
ended Dec. 31, 2002, and 2001, respectively; and $7 and $7 for the
six-month-periods ended Dec. 31, 2002, and 2001, respectively.
The Clorox Company Segment Information (1)
In millions
Earnings Before Income
Taxes
Net Sales and Discontinued Operations
------------------------------ ---------------------------
Three Months Ended Three Months Ended
------------------- % ------------------- %
Change Change
12/31/02 12/31/01 (1) 12/31/02 12/31/01 (1)
--------- --------- ---------- --------- --------- -------
Household
Products:
North
America $545 $506 8% $149 $125 19%
Latin
America/
Other 116 138 -16% (9) (28) 68%
Specialty
Products 265 243 9% 101 84 20%
Corporate - - - (99) (106) 6%
--------- --------- ---------- --------- --------- -------
Total $926 $887 4% $142 $75 89%
========= ========= ========== ========= ========= =======
(1) Percentages based on numbers that were not rounded. |
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