Clorox Reports Strong First-Quarter Results; Announces Plans to Sell Brazil Business.Business Editors OAKLAND, Calif.--(BUSINESS WIRE)--Oct. 30, 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 strong volume, sales, gross margin and earnings per share results for the first quarter of fiscal year 2003 ended Sept. 30, 2002. The company also announced plans to sell its business in Brazil, and has recorded an after-tax, noncash estimated loss on the 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 $13 million based on the expected value Expected value The weighted average of a probability distribution. Also known as the mean value. to be realized from the sale. On the company's first-quarter statement of consolidated earnings, the operating results of the Brazil business are presented 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. for the quarters ended Sept. 30, 2001 and 2002. Earnings from Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the : Clorox reported first-quarter net earnings of $158 million from continuing operations, or 71 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 from continuing operations of $111 million in the year-ago quarter, or 46 cents per diluted share, for an increase of 25 cents per diluted share, or 54 percent. Net Earnings: Clorox reported first-quarter net earnings of $145 million, or 65 cents per diluted share. This compares with net earnings of $79 million in the year-ago quarter, or 33 cents per diluted share, for an increase of 32 cents per diluted share, or 97 percent. The year-ago earnings per share include charges of 12 cents per diluted share primarily related to an asset-impairment charge for the company's business in Brazil (included in discontinued operations) and costs to close a 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 manufacturing facility in Canada. "We are delighted that our first-quarter volume, sales and profit were so strong, demonstrating that our focus on key priorities is continuing to drive positive trends across our businesses," 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
All financial results 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 . However, to clarify the company's results with respect to prior-year periods, Clorox will provide additional details regarding previously reported pro-forma earnings Pro-Forma Earnings Projected earnings based on a set of assumptions and often used to present a business plan (in Latin pro forma means "for the sake of form"). It also refers to earnings which exclude non-recurring items. Pro-forma earnings are not derived by standard GAAP methods. on the company's Web site at www.clorox.com/investors. Overall shipment volume increased 3 percent (5 percent excluding divestitures). Sales increased 6 percent to $1.05 billion for continuing operations, compared to $984 million in the prior year. Excluding the impact of divestitures, sales grew 8 percent. The Home Care Division led the volume and sales growth in 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. due to strong base brand and Clorox ReadyMop self-contained mopping system shipments. Volume rose 5 percent (7 percent excluding divestitures) while sales climbed 9 percent (11 percent excluding divestitures) for the combined Household Products-North America and Specialty Products segments. Partially offsetting the positive North America trends were declines in the company's 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. business due to continued weakness in much of 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. . First-quarter gross margin, excluding discontinued operations, increased 490 basis points to 48 percent, contributing to a 47 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 across the businesses, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix and reduced estimates of coupon redemptions. Improvements in managing inventories, receivables and payables resulted in negative working capital for the quarter. During the quarter, Clorox used its free cash flow to purchase about 3.4 million shares of the company's common stock at a total cost of about $145 million, bringing the total number of shares repurchased to 13.4 million at a total cost of about $562 million of the $1 billion previously authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by the company's board of directors. First-Quarter Results by Business Segment A summary of key first-quarter results by segment follows. All comparisons are with first quarter fiscal year 2002. Household Products -- North America -- 7% volume growth, 9% growth excluding divestitures -- 11% sales growth, 14% growth excluding divestitures -- 46% pretax earnings growth New products, including the Clorox ReadyMop self-contained mopping system, Clorox Oxygen Action 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 Orange Energy cleaner, drove volume growth in this segment. Also contributing to volume gains were Clorox disinfecting wipes due to higher levels of marketing support and Brita water-filtration systems due to merchandising activity, expanded distribution and the launch of new pour-through pitchers with electronic filter change indicators. Volume gains, favorable product mix, cost-savings initiatives and reduced estimates for coupon redemption rates 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, 4% growth excluding divestitures -- 6% sales growth, 7% growth excluding divestitures -- 18% pretax earnings growth Volume growth was driven by record shipments of Kingsford charcoal due to share gains and increased distribution, and Hidden Valley dressing and dip mixes. Record shipments of Scoop Away cat litter were offset by declines in Fresh Step cat litter caused by a comparison to record year-ago shipments and the timing of merchandising events. Top-line growth, gross margin gains on every business, favorable product mix, increased cost savings and lower promotional spending drove the segment's pretax earnings growth. Household Products -- Latin America & Other -- 7% volume decline, 6% decline excluding divestitures -- 13% sales decline, 13% decline excluding divestitures -- 24% pretax earnings decline before discontinued operations Volume declines in this segment reflect the continuing deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. of economic conditions in South America and the elimination of underperforming product items, which were partially offset by strong volume trends in the Korea insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides business due to market-share gains and a weather-related extension of the peak season. Segment earnings declined versus the prior year despite the steps Clorox has taken to mitigate conditions in South America, including increasing prices, reducing the size of the organization to improve the cost structure and cutting back on nonstrategic spending. 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. Outlook For fiscal 2003, the company now expects low-single-digit volume and sales growth and net earnings per diluted share in the range of $2.18 to $2.23 compared with $1.37 in fiscal 2002. The revised full-year expectations reflect the company's strong first-quarter results. The year-ago earnings per share include charges of 55 cents primarily related to asset-impairment charges for the company's businesses in Argentina, Brazil and Colombia; 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. As previously announced, Clorox will be implementing the first phase of its "Project Delta" enterprise systems project late in the second quarter. Due to the associated transition period, the company expects the timing of sales between its second and third quarters may be impacted. For the second quarter, Clorox estimates low-single-digit volume and sales growth and net earnings per diluted share in the range of 43 cents to 45 cents compared with 22 cents in the year-ago period. The year-ago earnings-per-share number includes charges of 17 cents primarily related to an asset-impairment charge for the company's business in Colombia and costs associated with reducing the size of the company's workforce. Today's Webcast Today, Clorox will host a live audio webcast of a discussion with the investment community regarding the company's first-quarter results and its outlook going forward. The webcast, which can be accessed at www.clorox.com, will begin at 10:30 a.m. Pacific time (1:30 p.m. Eastern time). A replay of the webcast 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 $4.1 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 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. and cleaning products, Armor All 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;. auto care products, Fresh Step and Scoop Away cat litters, Kingsford charcoal briquets, Hidden Valley and K C Masterpiece dressings and sauces, and Glad 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 and has made product donations valued at nearly $5 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. 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, integration of acquisitions, and environmental, regulatory and intellectual property matters.
The Clorox Company
Statements of Consolidated Earnings (Unaudited)
In millions, except per share amounts
Three Months Ended
-------------------------
9/30/02 9/30/01
--------- ---------
Net sales $ 1,047 $ 984
Cost of products sold 544 560
--------- ---------
Gross profit 503 424
Selling and administrative expenses 116 131
Advertising costs 111 99
Research and development costs 15 16
Restructuring and asset
impairment costs 3 12
Interest expense 8 12
Other (income) expense, net 6 (2)
--------- ---------
Earnings before income taxes
and discontinued operations 244 156
Income taxes 86 45
--------- ---------
Earnings from continuing operations 158 111
Losses from discontinued operations,
net of tax (1) (13) (32)
--------- ---------
Net earnings $ 145 $ 79
========= =========
Earnings (losses) per common share
Basic
Continuing operations $ 0.71 $ 0.47
Discontinued operations (0.06) (0.13)
--------- ---------
$ 0.65 $ 0.34
========= =========
Diluted
Continuing operations $ 0.71 $ 0.46
Discontinued operations (0.06) (0.13)
--------- ---------
$ 0.65 $ 0.33
========= =========
Weighted average shares outstanding
(in thousands)
Basic 221,883 234,980
Diluted 224,051 238,096
(1) Includes operating losses of $0.1million, estimated loss on
disposal of $19.4 million, and a $6.0 million tax benefit for the
quarter ended Sept. 30, 2002. Losses from discontinued operations
of $32 million in the quarter ended Sept. 30, 2001, include a $28
million impairment charge.
The Clorox Company
Segment Information (Unaudited)
In millions
Earnings Before
Income Taxes and
Net Sales Discontinued Operations
---------------------- ----------------------
Three Months Three Months
Ended % Ended %
-------------- --------------
9/30/ 9/30/ Change 9/30/ 9/30/ Change
2002 2001 (1) 2002 2001 (1)
------ ------ ------ ------ ------ ------
Household Products:
North America $628 $564 11% $206 $141 46%
Latin America/Other (2) 113 130 -13% 16 21 -24%
Specialty Products 306 290 6% 114 97 18%
Corporate -- -- -- (92) (103) 12%
------ ------ ------ ------ ------ ------
Total $1,047 $984 6% $244 $156 56%
====== ====== ====== ====== ====== ======
(1) Percentages based on numbers prior to rounding.
(2) Excludes discontinued operations for Brazil, which had net sales
of $6.8 million and net losses of $0.1 million for the quarter
ended Sept. 30, 2002; and net sales of $7.7 million and net losses
of $32 million, which included a $28 million impairment charge for
the quarter ended Sept. 30, 2001.
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion