Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - CLOROX CO /DE/ | clorox_8k.htm |
| EX-99.1 - PRESS RELEASE DATED FEBRUARY 4, 2014 OF THE CLOROX COMPANY - CLOROX CO /DE/ | exhibit99-1.htm |
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The Clorox Company |
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Supplemental Information – Volume Growth
| % Change vs. Prior Year | |||||||||
| Reportable Segment |
FY13 | FY14 | Major Drivers of Change | ||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | ||
| Cleaning (1) | 4% | 13% | 1% | -4% | 3% | 0% | 3% | 1% | Q2 volume increase driven by higher shipments of Clorox® disinfecting wipes and by higher shipments in the Professional Products business. |
| Household | -7% | 1% | -4% | -1% | -3% | 2% | -1% | 1% | Q2 volume decrease driven by lower shipments in the Charcoal business, partially offset by higher shipments of Glad® OdorShield® products. |
| Lifestyle | -1% | 7% | 1% | 0% | 2% | 4% | -1% | 2% | Q2 volume decrease driven by lower shipments of Brita® products, partially offset by higher shipments of Hidden Valley® products. |
| International | -2% | -3% | 1% | -6% | -2% | 0% | 2% | 1% | Q2 volume increase driven by higher shipments in Argentina, Canada and in the Middle East, partially offset by lower shipments in Venezuela. |
| Total Company | -1% | 5% | 0% | -3% | 0% | 1% | 1% | 1% | |
| (1) | The Cleaning reportable segment includes the December 2011 acquisitions of HealthLink and Aplicare, Inc. |
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The Clorox Company |
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Supplemental Information – Sales Growth
| % Change vs. Prior Year | |||||||||
| Reportable Segment |
FY13 | FY14 | Major Drivers of Change | ||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | ||
| Cleaning (1) | 8% | 15% | 2% | -1% | 5% | 1% | 2% | 2% | Q2 variance between volume and sales driven by unfavorable mix, partially offset by the benefit of price increases. |
| Household | -3% | 7% | -1% | 2% | 1% | 5% | -1% | 2% | Q2 variance flat between volume and sales. |
| Lifestyle | 1% | 8% | 2% | 2% | 3% | 5% | 0% | 2% | Q2 variance between volume and sales driven by the benefit of price increases and lower trade promotion spending. |
| International | 3% | 3% | 2% | -1% | 2% | -3% | 1% | -1% | Q2 variance between volume and sales driven by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. |
| Total Company | 3% | 9% | 1% | 0% | 3% | 2% | 0% | 1% | |
| (1) | The Cleaning reportable segment includes the December 2011 acquisitions of HealthLink and Aplicare, Inc. |
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The Clorox Company |
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Supplemental 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 | FY12 | FY13 | FY14 | |||||
| FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |
| Cost Savings | +160 | +170 | +190 | +150 | +150 | +160 | +180 | +150 |
| Price Changes | +220 | +160 | +120 | +110 | +120 | +120 | +80 | +70 |
| Market Movement (commodities)(1) | -220 | -10 | -10 | -20 | -20 | -20 | -110 | -140 |
| Manufacturing & Logistics (1) | -180 | -70 | -200 | -250 | -140 | -170 | -140 | -120 |
| All other | -120 | -140 | - | -10 | +20 | -10 | -10 | -20 |
| Change vs prior year | -140 | +110 |
+100 |
-20 | +130 | +80 | - | -60 |
| Gross Margin (%) | 42.1% | 42.9% | 42.5% | 42.1% | 44.0% | 42.9% | 42.9% | 41.9% |
| (1) | Market Movement (commodities) beginning in Q1 FY13 includes the change in the cost of diesel fuel. In FY12, the change in the cost of diesel fuel is included in Manufacturing & Logistics. |
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The Clorox Company |
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Supplemental Information – Balance
Sheet
(Unaudited)
As of December 31, 2013
Working Capital Update
| Q2 | |||||||||
| FY 2014 | FY 2013 | Change | Days (5) | Days (5) | |||||
| ($ millions) | ($ millions) | ($ millions) | FY 2014 | FY 2013 | Change | ||||
| Receivables, net | $499 | $511 | -$12 | 34 | 34 | -- | |||
| Inventories, net | $466 | $444 | +$22 | 53 | 51 | +2 | |||
| Accounts payable (1) | $359 | $365 | -$6 | 41 | 43 | -2 | |||
| Accrued liabilities | $480 | $493 | -$13 | ||||||
| Total WC (2) | $320 | $239 | +$81 | ||||||
| Total WC % net sales (3) | 6.0 | % | 4.5 | % | |||||
| Average WC (2) | $267 | $222 | +$45 | ||||||
| Average WC % net sales (4) | 5.0 | % | 4.2 | % | |||||
Inventories: Inventories higher, due to higher Clorox® Disinfecting Wipes inventory driven by low prior year inventory levels due to record shipments, as well as preparation for a systems conversion and business growth for Burt’s Bees.
Working Capital: Working capital higher, largely due to higher income tax payments, which exceeded income tax accruals in the current quarter.
| (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, assets held for sale, 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 December 31, 2013
Capital expenditures for the second quarter were $36 million versus $48 million in the year-ago quarter.
Depreciation and amortization for the second quarter was $45 million versus $46 million in the year-ago quarter.
Net cash provided by continuing operations in the second quarter was $33 million, or 2 percent of sales.
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The Clorox Company |
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Supplemental Information – Fiscal Year to Date Free Cash Flow Reconciliation
| Q2 | Q2 | |||
| Fiscal | Fiscal | |||
| YTD | YTD | |||
| 2014 | 2013 | |||
| Net cash provided by continuing operations – GAAP | $212 | $325 | ||
| Less: Capital expenditures | 63 | 102 | ||
| Free cash flow – non-GAAP (1) | $149 | $223 | ||
| Free cash flow as a percent of sales – non-GAAP (1) | 5.5% | 8.4% | ||
| Net sales | $2,694 | $2,663 |
| (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. |
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The Clorox Company |
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Reconciliation of earnings from continuing operations before income taxes to EBIT(1)(3) and EBITDA (2)(3)
Dollars in millions and percentages based on rounded numbers
| FY 2013 | FY 2014 | ||||||||||||||||||||||||||
| Q1 9/30/12 |
Q2 12/31/12 |
Q3 3/31/13 |
Q4 6/30/13 |
FY 6/30/13 |
Q1 9/30/13 |
Q2 12/31/13 | |||||||||||||||||||||
| Earnings from continuing operations | $ | 194 | $ | 188 | $ | 202 | $ | 269 | $ | 853 | $ | 208 | $ | 181 | |||||||||||||
| before income taxes | |||||||||||||||||||||||||||
| Interest income | - | (1 | ) | (1 | ) | (1 | ) | (3 | ) | (1 | ) | - | |||||||||||||||
| Interest expense | 33 | 33 | 30 | 26 | 122 | 26 | 26 | ||||||||||||||||||||
| EBIT (1)(3) | 227 | 220 | 231 | 294 | 972 | 233 | 207 | ||||||||||||||||||||
| EBIT margin (1)(3) | 17.0% | 16.6% | 16.3% | 19.0% | 17.3% | 17.1% | 15.6% | ||||||||||||||||||||
| Depreciation and amortization | 44 | 46 | 46 | 46 | 182 | 44 | 45 | ||||||||||||||||||||
| EBITDA (2)(3) | $ | 271 | $ | 266 | $ | 277 | $ | 340 | $ | 1,154 | $ | 277 | $ | 252 | |||||||||||||
| EBITDA margin (2)(3) | 20.3% | 20.1% | 19.6% | 22.0% | 20.5% | 20.3% | 18.9% | ||||||||||||||||||||
| Net sales | $ | 1,338 | $ | 1,325 | $ | 1,413 | $ | 1,547 | $ | 5,623 | $ | 1,364 | $ | 1,330 | |||||||||||||
| Debt to EBITDA (3)(4) | 2.1 | 2.1 | 2.2 | ||||||||||||||||||||||||
| Total debt (5) | $ | 2,372 | $ | 2,456 | $ | 2,512 | |||||||||||||||||||||
| (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) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. The Company calculates debt to EBITDA for compliance with its debt covenants using EBITDA for the trailing four quarters, as contractually defined. | |
| (5) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. | |
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The Clorox Company |
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U.S. Retail Pricing Actions from CY2009 - CY2014
| 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 | +17% | April 2012 | |||
| Clorox Clean-Up® , Formula 409® , and Clorox® Disinfecting | |||||
| Bathroom spray cleaners | +5% | March 2013 | |||
| 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 | |||
| 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 | |||
| 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.