Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - CLOROX CO /DE/ | clorox_8k.htm |
| EX-99.1 - PRESS RELEASE DATED AUGUST 2, 2012 OF THE CLOROX COMPANY - CLOROX CO /DE/ | exhibit99-1.htm |
| EX-99.3 - SCHEDULE OF RECAST NET SALES AND EARNINGS FROM CONTINUING OPERATIONS - CLOROX CO /DE/ | exhibit99-3.htm |
| The Clorox Company |
|
Supplemental Information – Volume Growth
| % Change vs. Prior Year | |||||||||||
| Reportable Segments | FY11(1) | FY12(1) | Major Drivers of Change | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||
| Cleaning(2) | 1% | -6% | 4% | 4% | 1% | -1% | 0% | 7% | 5% | 2% | Q4 increase primarily driven by higher shipments in the Professional Products division business unit due to the recent acquisitions of HealthLink and Aplicare, Inc.; as well as higher shipments of Clorox® branded cleaners. |
| Household | -9% | -1% | -3% | 2% | -2% | 5% | 1% | 2% | -2% | 1% | Q4 decrease primarily due to lower shipments of Glad® food storage products and Cat Litter. |
| Lifestyle (3) | 0% | 2% | 3% | 3% | 2% | 5% | 2% | 4% | 2% | 3% | Q4 increase primarily due to higher shipments of the U.S. Natural Personal Care Products including the launch of gud™, and increased shipments of the new Brita Bottle®. |
| International (3) | -2% | 4% | 0% | 0% | 1% | 4% | -1% | 1% | 3% | 2% | Q4 increase driven by higher shipments in Latin America. |
| Total Company | -2% | -2% | 1% | 2% | 0% | 2% | 0% | 4% | 2% | 2% | |
Supplemental Information – Sales Growth
| % Change vs. Prior Year | |||||||||||
| Reportable Segments | FY11(1) | FY12(1) | Major Drivers of Change | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | ||
| Cleaning(2) | -1% | -6% | 3% | 4% | 0% | -2% | 5% | 10% | 7% | 5% | Q4 variance between changes in volume and sales was driven by the benefit of price increases, partially offset by unfavorable product mix. |
| Household | -7% | -4% | -3% | 1% | -3% | 3% | 4% | 6% | 3% | 4% | Q4 variance between changes in volume and sales was driven by the benefit of the price increases. |
| Lifestyle (3) | 1% | 1% | 0% | 5% | 2% | 6% | 6% | 10% | 3% | 6% | Q4 variance between changes in volume and sales was driven by the benefit of price increases. |
| International (3) | -2% | 0% | 8% | 9% | 4% | 10% | 0% | 4% | 3% | 4% | Q4 sales growth is due to higher volume and price increases, offsetting unfavorable foreign currency exchange rates. |
| Total Company | -3% | -3% | 1% | 4% | 0% | 3% | 4% | 7% | 4% | 5% | |
| (1) | Volume and sales growth percentage changes for the Cleaning and International reportable segments and for Total Company reflect the reclassification of the Auto Businesses to discontinued operations in Q1 fiscal year 2011 for all periods presented. | |
| (2) | The Cleaning reportable segment includes the recent acquisitions of HealthLink and Aplicare, Inc. | |
| (3) | Beginning in Q4 fiscal year 2012, Natural Personal Care results outside of the U.S. are being reported in the International reportable segment rather than the Lifestyle reportable segment. Historical segment financial information presented has been recast to reflect this change. |
| The Clorox Company |
|
Earnings (Losses) From Continuing Operations Before Interest and Taxes (EBIT), Earnings (Losses) From Continuing Operations Before Interest, Taxes, Depreciation and Amortization (EBITDA) (1)
Reconciliation of earnings (losses) from continuing operations before income taxes to EBIT and EBITDA
Dollars in millions and percentages based on rounded numbers
| FY 2011 | FY2012 | ||||||||||||||||||||||||||||||||||||||
| Q1 9/30/10 |
Q2 12/31/10 |
Q3 3/31/11 |
Q4 6/30/11 |
FY 6/30/11 |
Q1 9/30/11 |
Q2 12/31/11 |
Q3 3/31/2012 |
Q4 6/30/12 |
FY 6/30/12 | ||||||||||||||||||||||||||||||
| Earnings (losses) from continuing | |||||||||||||||||||||||||||||||||||||||
| operations before income taxes | $ | 202 | $ | (112 | ) | $ | 219 | $ | 254 | $ | 563 | $ | 187 | $ | 155 | $ | 198 | $ | 251 | $ | 791 | ||||||||||||||||||
| Goodwill impairment (2) | - | 258 | - | - | 258 | - | - | - | - | - | |||||||||||||||||||||||||||||
| Interest income | (1 | ) | (1 | ) | - | (1 | ) | (3 | ) | (1 | ) | (1 | ) | - | (1 | ) | (3 | ) | |||||||||||||||||||||
| Interest expense | 32 | 33 | 29 | 29 | 123 | 29 | 30 | 33 | 33 | 125 | |||||||||||||||||||||||||||||
| EBIT (3) | 233 | 178 | 248 | 282 | 941 | 215 | 184 | 231 | 283 | 913 | |||||||||||||||||||||||||||||
| EBIT margin (3) | 18.4% | 15.1% | 19.0% | 19.0% | 18.0% | 16.5% | 15.1% | 16.5% | 18.4% | 16.7% | |||||||||||||||||||||||||||||
| Depreciation and amortization | 45 | 43 | 42 | 43 | 173 | 46 | 43 | 44 | 45 | 178 | |||||||||||||||||||||||||||||
| EBITDA (4) | $ | 278 | $ | 221 | $ | 290 | $ | 325 | $ | 1,114 | $ | 261 | $ | 227 | $ | 275 | $ | 328 | $ | 1,091 | |||||||||||||||||||
| EBITDA margin (4) | 22.0% | 18.7% | 22.2% | 21.9% | 21.3% | 20.0% | 18.6% | 19.6% | 21.3% | 20.0% | |||||||||||||||||||||||||||||
| Net sales | $ | 1,266 | $ | 1,179 | $ | 1,304 | $ | 1,482 | $ | 5,231 | $ | 1,305 | $ | 1,221 | $ | 1,401 | $ | 1,541 | $ | 5,468 | |||||||||||||||||||
| Debt to EBITDA (5) | 2.3 | 2.5 | |||||||||||||||||||||||||||||||||||||
| Total debt (6) | $ | 2,584 | $ | 2,721 | |||||||||||||||||||||||||||||||||||
| (1) |
In accordance with 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 and EBITDA margin
provides additional useful information to investors about current trends
in the business. | |
| (2) | The goodwill impairment represents a $258 non-cash charge recognized in Q2 fiscal 2011 to adjust the carrying value of the goodwill related to the acquisition of Burt’s Bees to estimated fair value. | |
| (3) | EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding goodwill impairment, interest income and interest expense, as reported above. EBIT margin is a measure of EBIT as a percentage of net sales. | |
| (4) | EBITDA (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding goodwill impairment, interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is a measure of EBITDA as a percentage of net sales. | |
| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA. | |
| (6) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. |
| The Clorox Company |
|
Supplemental Information – Balance
Sheet
(Unaudited)
As of June 30, 2012
Working Capital Update
| Q4 | |||||||||
| FY 2012 | FY 2011 | Change | Days (5) | Days (5) | |||||
| ($ millions) | ($ millions) | ($ millions) | FY 2012 | FY 2011 | Change | ||||
| Receivables, net | $576 | $525 | +$51 | 33 | 31 | +2 | |||
| Inventories, net | $384 | $382 | +$2 | 43 | 44 | -1 | |||
| Accounts payable (1) | $412 | $423 | -$11 | 43 | 45 | -2 | |||
| Accrued liabilities | $494 | $442 | +$52 | ||||||
| Total WC (2) | $198 | $114 | +$84 | ||||||
| Total WC % net sales (3) | 3.2 | % | 1.9 | % | |||||
| Average WC (2) | $243 | $138 | +$105 | ||||||
| Average WC % net sales (4) | 3.9 | % | 2.3 | % | |||||
- Receivables increase primarily driven by higher sales.
- Accrued liabilities increase primarily driven by higher employee incentive compensation and trade-promotion spending accruals.
Supplemental Information – Cash
Flow
(Unaudited)
For the quarter and fiscal year ended June 30, 2012
Capital expenditures for the fourth quarter were $73 million versus $69 million in the year-ago quarter (fiscal year 2012 = $192).
Depreciation and amortization for the fourth quarter was $45 million versus $43 million in the year-ago quarter (fiscal year 2012 = $178)
Net cash provided by continuing operations in the fourth quarter was $287 million, or 19 percent of sales.
| (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. |
| The Clorox Company |
|
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 | FY11 | FY12 | ||||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | Q4 | FY | |
| Cost Savings | +200 | +180 | +180 | +110 | +170 | +160 | +180 | +160 | +150 | +160 |
| Price Changes | +80 | +100 | +60 | +70 | +80 | +170 | +240 | +250 | +230 | +220 |
| Market Movement (commodities) | -180 | -150 | -150 | -170 | -160 | -320 | -240 | -200 | -110 | -220 |
| Manufacturing & Logistics (1) | +20 | -60 | -70 | -40 | -30 | -220 | -170 | -200 | -140 | -180 |
| All other (2) | -160 | -250 | -70 | -50 | -140 | -40 | -30 | -190 | -210 | -120 |
| Change vs prior year | -40 | -180 | -50 | -80 | -80 | -250 | -20 | -180 | -80 | -140 |
| Gross Margin (%) | 44.3% | 41.7% | 44.1% | 43.5% | 43.5% | 41.8% | 41.5% | 42.3% | 42.7% | 42.1% |
| (1) |
“Manufacturing & Logistics” includes the change in the cost of diesel fuel. | |
| (2) | “All other” in Q4 FY12 includes other supply chain, primarily due to higher employee incentive compensation costs (-100 bps), product mix (-80 bps) and higher trade-promotion spending (-50 bps). |
| The Clorox Company |
|
Economic Profit (Unaudited) (1)
Reconciliation of economic profit (EP)
Dollars in millions and all calculations on a rounded basis
| FY12 | FY11(2) | FY10(2) | ||||||
| Earnings from continuing operations before income taxes | $ | 791 | $ | 563 | $ | 805 | ||
| Non-cash restructuring-related and asset impairment costs | 4 | 6 | 4 | |||||
| Non-cash goodwill impairment | - | 258 | - | |||||
| Interest expense | 125 | 123 | 139 | |||||
| Earnings from continuing operations before income taxes, non-cash | ||||||||
| restructuring-related and asset impairment costs, non-cash goodwill | ||||||||
| impairment and interest expense | $ | 920 | $ | 950 | $ | 948 | ||
| Adjusted after tax profit (3) | $ | 631 | $ | 629 | $ | 619 | ||
| Average capital employed (4) | $ | 2,544 | $ | 2,618 | $ | 2,525 | ||
| Capital charge (5) | 229 | 236 | 227 | |||||
| Economic profit (6) (Adjusted after tax profit less capital charge) | $ | 402 | $ | 393 | $ | 392 | ||
| % change over prior year | +2.3% | +0.3% | +12.6% | |||||
| (1) | In accordance with SEC's Regulation G, this schedule provides the definition of a non-GAAP measure and the reconciliation to the most closely related GAAP measure. Management believes the presentation of economic profit (EP) provides additional information to investors about current trends in the business. EP is used by management to evaluate business performance and was taken into account in determining management’s incentive compensation in fiscal year 2012. EP represents profit generated over and above the cost of paying for assets used by the business to generate that profit. | |
| (2) | In the fiscal year 2011 Annual Report to shareholders and in the company’s Annual Report on Form 10-K, EP for all fiscal years presented included the results of the Auto Businesses (but excluded the net gain on sale) because this was the method used by the company to calculate EP to determine the amount of short-term compensation for fiscal year 2011. In the current fiscal year, EP calculations for all fiscal years presented exclude the Auto Businesses. | |
| (3) | Adjusted after tax profit represents earnings from continuing operations before income taxes, non-cash restructuring-related and asset impairment costs, and interest expense, after tax. The tax rate applied is the effective tax rate on continuing operations before the non-cash goodwill impairment charge for fiscal year 2011, which was 31.4%, 33.8% and 34.7% in fiscal years 2012, 2011 and 2010 respectively. The difference between the fiscal year 2011 effective tax rate on continuing operations before the non-cash goodwill impairment charge and the effective tax rate on continuing operations of 49% is (16.0)% related to the non-deductible non-cash goodwill impairment charge and 0.8% for other tax effects related to excluding this charge. | |
| (4) | Total capital employed represents total assets less non-interest bearing liabilities. Adjusted capital employed represents total capital employed adjusted to add back current year non-cash restructuring-related and asset impairment costs and non-cash goodwill impairment. Average capital employed represents a two-point average of adjusted capital employed for the current year and total capital employed for the prior year, based on year-end balances. See below for details of the average capital employed calculation: |
| FY12 | FY11(2) | FY10(2) | ||||||||
| Total assets | $ | 4,355 | $ | 4,163 | $ | 4,548 | ||||
| Adjustments related to the Auto businesses | - | - | (405 | ) | ||||||
| Total assets adjusted for Auto businesses | 4,355 | 4,163 | 4,143 | |||||||
| Less: | ||||||||||
| Accounts payable | 412 | 423 | 409 | |||||||
| Accrued liabilities | 494 | 442 | 491 | |||||||
| Income taxes payable | 5 | 41 | 74 | |||||||
| Other liabilities | 739 | 619 | 677 | |||||||
| Deferred income taxes | 119 | 140 | 19 | |||||||
| Non-interest bearing liabilities | 1,769 | 1,665 | 1,670 | |||||||
| Total capital employed | 2,586 | 2,498 | 2,473 | |||||||
| Non-cash restructuring-related and asset impairment costs | 4 | 6 | 4 | |||||||
| Non-cash goodwill impairment | - | 258 | - | |||||||
| Adjusted capital employed | $ | 2,590 | $ | 2,762 | $ | 2,477 | ||||
| Average capital employed | $ | 2,544 | $ | 2,618 | $ | 2,525 | ||||
| (5) | Capital charge represents average capital employed multiplied by the weighted-average cost of capital. The weighted-average cost of capital used to calculate capital charge was 9% for all fiscal years presented. | |
| (6) | EP represents earnings from continuing operations before income taxes, non-cash restructuring-related and asset impairment costs, non-cash goodwill impairment and interest expense, after tax, less a capital charge (as defined above). |
| The Clorox Company |
|
Return on Invested Capital (Unaudited) (1)
Calculation of return on invested capital (ROIC)
Dollars in millions and all calculations on a rounded basis
| FY12 | FY11 | FY10 | |||||||
| Earnings from continuing operations before income taxes | $ | 791 | $ | 563 | $ | 805 | |||
| Restructuring and asset impairment costs | 4 | 4 | 4 | ||||||
| Non-cash goodwill impairment | - | 258 | - | ||||||
| Interest expense | 125 | 123 | 139 | ||||||
| Earnings from continuing operations before income taxes, | |||||||||
| restructuring and asset impairment costs, non-cash goodwill | |||||||||
| impairment, and interest expense | $ | 920 | $ | 948 | $ | 948 | |||
| Adjusted after tax profit (2) | $ | 631 | $ | 628 | $ | 619 | |||
| Adjusted average invested capital (3) | $ | 2,606 | $ | 2,632 | $ | 2,645 | |||
| Return on invested capital (4) | 24.2% | 23.9% | 23.4% | ||||||
| (1) | In accordance with SEC's Regulation G, this schedule provides the definition of a non-GAAP measure and the reconciliation to the most closely related GAAP measure. Management believes the presentation of return on invested capital (ROIC) provides additional information to investors about current trends in the business. ROIC is a measure of how effectively the company allocates capital. | |
| (2) | Adjusted after tax profit represents earnings from continuing operations before income taxes, restructuring and asset impairment costs, non-cash goodwill impairment and interest expense, after tax. The tax rate applied is the effective tax rate on continuing operations, before the non-cash goodwill impairment charge for fiscal year 2011, which was 31.4%, 33.8% and 34.7% in fiscal years 2012, 2011 and 2010 respectively. The difference between the fiscal year 2011 effective tax rate on continuing operations before the non-cash goodwill impairment charge and the effective tax rate on continuing operations of 49% is (16.0)% related to the non-deductible non-cash goodwill impairment charge and 0.8% for other tax effects related to excluding this charge. | |
| (3) | Average invested capital represents a five quarter average of total assets less non-interest bearing liabilities and assets held for sale. Adjusted average invested capital represents average invested capital adjusted to add back a five quarter average of cumulative, current-year after-tax restructuring and asset impairment costs. See below for details of the adjusted average invested capital calculation: |
| (Amounts shown below are five quarter averages) | FY12 | FY11 | FY10 | ||||||||||
| Total Assets | $ | 4,254 | $ | 4,343 | $ | 4,585 | |||||||
| Less: non-interest bearing liabilities | (1,652 | ) | (1,638 | ) | (1,538 | ) | |||||||
| Less: assets held for sale | - | (175 | ) | (404 | ) | ||||||||
| Average invested capital | 2,602 | 2,530 | 2,643 | ||||||||||
| Cumulative after-tax restructuring and asset impairment costs | 4 | 102 | 2 | ||||||||||
| Adjusted average invested capital | $ | 2,606 | $ | 2,632 | $ | 2,645 | |||||||
| (4) | ROIC is calculated as earnings from continuing operations before income taxes, excluding restructuring and asset impairment costs, non-cash goodwill impairment and interest expense, computed on an after-tax basis as a percentage of adjusted average invested capital (as defined above). |
The Clorox Company Updated: 8-2-12 |
|
U.S. Retail Pricing Actions from CY2008 - CY2012
| Brand / Product | Average Price Change | Effective Date | ||||
| Home Care | ||||||
| Pine-Sol® cleaners | +13% | May 2008 | ||||
| Clorox Clean-Up® cleaners | +8% | August 2008 | ||||
| Formula 409®, Tilex®, and Clorox® Disinfecting Bathroom cleaners | +12% | August 2008 | ||||
| Liquid-Plumr® products | +9% | August 2008 | ||||
| Clorox® Toilet Bowl Cleaner and Clorox® ToiletWandTM products | +8 to +13% | August 2008 | ||||
| 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 | ||||
| Laundry | ||||||
| Clorox® liquid bleach | +10% | August 2008 | ||||
| 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 | ||||||
| Glad® trash bags | +7% | February 2008 | ||||
| GladWare® disposable containers | +7% | February 2008 | ||||
| Glad® trash bags | +10% | October 2008 | ||||
| Glad® trash bags | -10% | December 2008 | ||||
| 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 | ||||
| Litter | ||||||
| Cat litter | +7 to +8% | August 2008 | ||||
| Cat litter | -8 to -9% | March 2010 | ||||
| Cat litter | +5% | May 2012 | ||||
| Food | ||||||
| Hidden Valley Ranch® salad dressing | +7% | August 2008 | ||||
| Hidden Valley Ranch® salad dressing | +7% | August 2011 | ||||
| Charcoal | ||||||
| Charcoal | +6% | January 2008 | ||||
| Charcoal and lighter fluid | +7 to +16% | January 2009 | ||||
| Charcoal and lighter fluid | +8 to 10% | January 2012 | ||||
| Brita | ||||||
| Brita® pitchers | +3% | August 2011 | ||||
| Brita® pitchers and filters | +5% | July 2012 | ||||
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.