Clorox Reports Strong Top-Line Growth and 57 Cents EPS in First Quarter; Confirms Earnings Outlook for Second Quarter and Fiscal Year 2005.OAKLAND Oakland, city (1990 pop. 372,242), seat of Alameda co., W Calif., on the eastern side of San Francisco Bay; inc. 1852. Together with San Francisco and San Jose, the city comprises the fourth largest metropolitan area in the United States. , Calif. -- The Clorox Clorox commercial name for a sodium hypochlorite preparation marketed as household bleach, but also used for disinfection. 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. )(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :CLX) today announced that strong sales growth and cost savings contributed solidly to the company's results for its fiscal first quarter, which ended Sept. 30, 2004. "Clorox people around the world delivered another strong quarter," said President and Chief Executive Officer Jerry Jer·ry n. pl. Jer·ries Chiefly British Slang A German, especially a German soldier. [Alteration of German. Johnston Johnston, town (1990 pop. 26,542), Providence co., N central R.I., a suburb of Providence; inc. 1759. Among its manufactures are jewelry, textiles, and fabricated metals. Johnston is the home of several insurance companies. . "We're we're Contraction of we are. we're we are extremely pleased with our results, which demonstrate the organization's focus on growth, innovation, margin expansion and cost savings." Clorox reported first-quarter net earnings of $123 million, or 57 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, compared with net earnings in the year-ago period of $129 million, or 60 cents per diluted share, for a decrease of 3 cents per diluted share, or 5 percent. Net earnings reflected $30 million of pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and asset-impairment charges (9 cents per diluted share), primarily due to the previously announced restructuring of the company's Glad U.S. manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. , part of a strategy to streamline manufacturing processes and improve margins. First-quarter sales grew 4 percent to $1.09 billion, compared with $1.05 billion in the base period. Volume growth of 4 percent was driven by new products and all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal record shipments of Clorox(R) disinfecting wipes. Gross margin in the first quarter grew 90 basis points versus the year-ago period to 44.5 percent, primarily due to strong cost savings, partially offset by increased raw-material expenses. Clorox generated $216 million of cash from operations in the first quarter, compared to $140 million in the year-ago period, an increase of 54 percent. Contributing to this positive trend were higher pretax earnings in the current period before the aforementioned a·fore·men·tioned adj. Mentioned previously. n. The one or ones mentioned previously. aforementioned Adjective mentioned before Adj. 1. restructuring and asset-impairment charges on the Glad business, and a $37 million pension plan contribution in the year-ago period. First-Quarter Results by Business Segment Following is a summary of key first-quarter results by segment. All comparisons are with the first quarter of fiscal year 2004. 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. --6% sales growth --8% volume growth --2% pretax earnings decline Strong sales growth in the segment was driven by all-time record shipments of Glad(R) trash bags behind the launch of new Glad(R) ForceFlex(TM) trash bags, which have a unique diamond texture that stretches to prevent punctures and rips. Also driving sales growth were all-time record shipments of Clorox(R) disinfecting wipes, and strong shipments of the new Clorox(R) ToiletWand(TM) disposable disposable Nursing adjective Referring to that which is discarded or disposed of noun An item used in health care-related Pt contact which is discarded after use–eg masks, gloves, gowns, needles, paper products, syringes, wipes. See Biohazardous waste. toilet-cleaning system, partially offset by decreased shipments of Clorox(R) ReadyMop(R) mopping system. Sales growth lagged volume growth due to higher trade-promotion spending behind new products versus the year-ago quarter. Pretax earnings reflected the benefit of increased sales and strong cost savings, more than offset by the aforementioned restructuring and asset-impairment charges on the Glad business and the impact of trade-promotion spending in support of new products. Specialty Products --1% sales decline --2% volume decline --1% pretax earnings growth The segment's sales decline was driven by strong competitive activity in auto-care products and lower 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 primarily due to category softness. These declines were partially offset by increased shipments of 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. behind the 10th consecutive quarter of year-over-year volume growth for Scoop Away(R) cat litters, eighth consecutive quarter of year-over-year growth for Fresh Step(R) scoopable cat litter and record shipments of Fresh Step(R) Plus Dual Action Crystals(TM) blended cat litter. Pretax earnings reflected strong cost savings and lower costs for the third-party production of some Match Light(R) charcoal, substantially offset by unfavorable raw-material expenses. International --6% sales growth --6% volume growth --3% pretax earnings decline The segment's strong sales growth was driven by increased volume behind new products and category and share growth 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. , and the launch of Clorox(R) laundry Laundry can be:
Before industrialization and home-cleaning products in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and New Zealand New Zealand (zē`lənd), island country (2005 est. pop. 4,035,000), 104,454 sq mi (270,534 sq km), in the S Pacific Ocean, over 1,000 mi (1,600 km) SE of Australia. The capital is Wellington; the largest city and leading port is Auckland. . Pretax earnings reflected strong cost savings in Latin America and the benefit of increased sales across the segment, more than offset by higher advertising expenses in support of new products. Outlook As previously communicated, Clorox has reached a definitive agreement with Henkel Henkel KGaA (ISIN: DE0006048432, ISIN: DE0006048408) is an international household products company headquartered in Düsseldorf, Germany. The company has four business sectors operating in three strategic areas: Home Care KGaA KGaA Kommanditgesellschaft Auf Aktien (German: Limited partnership on shares; business entity) under which Clorox will exchange full ownership interest in a subsidiary for Henkel's approximately 61.4 million shares of Clorox common stock. The subsidiary will contain Clorox's ownership interest in its insecticides insecticides, chemical, biological, or other agents used to destroy insect pests; the term commonly refers to chemical agents only. Chemical Insecticides and Soft Scrub(R) cleanser businesses, its 20 percent interest in the Henkel Iberica, S.A., joint venture, and cash. The transaction is expected to close no later than Dec. 1, 2004. For clarity, the company is providing outlook including and excluding the impact of the transaction. Excluding Impact of Transaction Excluding the impact of the transaction, Clorox continues to anticipate sales growth of 3 percent to 5 percent and earnings per diluted share in the range of 48 cents to 52 cents for the second quarter. For fiscal year 2005, also excluding the impact of the transaction, Clorox continues to expect sales growth of 3 percent to 5 percent and earnings per diluted share in the range of $2.58 to $2.66. Although first-quarter earnings benefited from higher-than-expected gross margin growth behind strong cost savings, the company is maintaining its earnings forecast for the rest of the year due to anticipated increases in commodity costs. Including Impact of Transaction The transaction is not expected to have a material impact on second-quarter outlook; however, it will impact the company's full-year expectations. Including the impact of the transaction, Clorox expects low-single-digit sales growth on an as-reported basis for fiscal 2005. The company anticipates that the transaction will increase earnings per diluted share in the range of 7 cents to 10 cents, excluding the book gain to be recognized on the transaction. Upon closing, Clorox anticipates recognizing a gain on the transaction in the range of $3.00 to $3.15 per diluted share. Note: Percentage and basis-point changes noted in this news release are calculated based on rounded numbers. For additional information about the company's results, including definitions of financial terms used in this earnings release and on today's conference call with the investment community (details below), visit the Financial Results area within the Investors section of the company's Web site at www.TheCloroxCompany.com. Today's Webcast Today at 10:30 a.m. Pacific time (1:30 p.m. Eastern time), Clorox will host a live audio webcast of a discussion with the investment community regarding the company's first-quarter results. The webcast can be accessed at www.TheCloroxCompany.com/investors/index.html. Following a live discussion, 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 2004 revenues of $4.3 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(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, Brita Brita is a German company that specializes in water filtration products. The company is the world's market leader in portable household water filtration. Brita products include water jugs, kettles and tap attachments, all of which use activated carbon as their primary filtering (R) water-filtration systems, and Glad(R) bags, wraps and containers. With 8,600 employees worldwide, the company manufactures products in 25 countries and markets them in more than 100 countries. Clorox is committed to making a positive difference in the communities where its employees work and live. Founded in 1980, The Clorox Company Foundation has awarded cash grants totaling more than $58.3 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 fiscal 2004 alone made product donations valued at $5 million. For more information about Clorox, visit www.TheCloroxCompany.com. 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. 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 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 & Analysis" 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 June: see month. 30, 2004, 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; competitors' actions; the company's costs, including changes in the company's exposure to commodity cost increases; the effects on cash flow of tax payments and share repurchases Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. , including interest costs and repayment of debt incurred to finance repurchases; the ability to manage and realize the benefits of joint ventures and other cooperative relationships; 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 integration of acquisitions; and environmental, regulatory and intellectual property matters. Risks particular to the previously announced share exchange agreement with Henkel KGaA include the sustainability of cash flows and the actual level of debt costs. Rating agency decisions and other external factors could increase interest costs. Declines in cash flow, which reduce the company's ability to repay debt, or interest cost increases greater than management expects, could adversely affect the company's earnings.
Condensed Consolidated Statements of Earnings (Unaudited)
In millions, except share and per-share amounts
Three Months Ended
---------------------
9/30/2004 9/30/2003
---------- ----------
Net sales $1,090 $1,048
Cost of products sold 605 591
---------- ----------
Gross profit 485 457
Selling and administrative expenses 132 122
Advertising costs 108 106
Research and development costs 21 19
Restructuring and asset impairment costs 30 -
Interest expense 8 6
Other (income) expense, net (3) 3
---------- ----------
Earnings from continuing operations before income
taxes 189 201
Income taxes 66 71
---------- ----------
Earnings from continuing operations 123 130
Loss from discontinued operations, net of tax
benefits of $1 for the three-month period ended
September 30, 2003 - (1)
---------- ----------
Net earnings $123 $129
========== ==========
Net earnings per common share
Basic $0.58 $0.61
Diluted $0.57 $0.60
Weighted average common shares outstanding (in
thousands)
Basic 212,905 212,654
Diluted 215,117 214,807
Segment Information (Unaudited)
In millions
First Quarter
------------- Earnings from Continuing
Operations Before Income
Net Sales Taxes
------------------------- -------------------------
Three Months Three Months
Ended Ended
--------------- ---------------
9/30 9/30 % 9/30 9/30 %
2004 2003 Change(1) 2004 2003 Change(1)
------- ------- --------- ------- ------- ---------
Household Products-
North America $642 $603 6% $152 $155 -2%
Specialty Products 314 318 -1% 109 108 1%
International 134 127 6% 29 30 -3%
Corporate - - - (101) (92) -10%
------- ------- --------- ------- ------- ---------
Total Company $1,090 $1,048 4% $189 $201 -6%
======= ======= ========= ======= ======= =========
(1) Percentages based on rounded numbers.
Condensed Consolidated Balance Sheets (Unaudited)
In millions
9/30/2004 6/30/2004
----------- -----------
Assets
Current assets
Cash and cash equivalents $255 $232
Receivables, net 385 460
Inventories 305 301
Other current assets 53 50
Assets held for exchange 132 -
----------- -----------
Total current assets 1,130 1,043
Property, plant and equipment, net 995 1,052
Goodwill, net 736 742
Trademarks and other intangible assets, net 602 633
Other assets 309 364
----------- -----------
Total assets $3,772 $3,834
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities
Notes and loans payable $170 $289
Current maturities of long-term debt 3 2
Accounts payable 287 310
Accrued liabilities 617 643
Income taxes payable 18 24
----------- -----------
Total current liabilities 1,095 1,268
Long-term debt 474 475
Other liabilities 385 377
Deferred income taxes 174 174
Stockholders' equity
Common stock 250 250
Additional paid-in capital 304 301
Retained earnings 2,906 2,846
Treasury shares, at cost (1,552) (1,570)
Accumulated other comprehensive net losses (252) (274)
Unearned compensation (12) (13)
----------- -----------
Stockholders' equity 1,644 1,540
----------- -----------
Total liabilities and stockholders' equity $3,772 $3,834
=========== ===========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion