The Clorox Company |  |
SupplementalInformation –VolumeGrowth
| | % Change vs. Prior Year | |
| Reportable Segment | FY09 | FY10 | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | YTD | |
| Cleaning | -3% | -7% | -6% | -4% | -5% | 4% | 4% | Q1 increase primarily driven by higher shipments of disinfecting products due to increased demand as a result of the H1N1 flu virus outbreak. |
| Household | 3% | -10% | -7% | -3% | -4% | -7% | -7% | Q1 decrease primarily driven by lower shipments of Glad®trash bagsdue to category softness and competitive activity. |
| Lifestyle(1) | 35% | 31% | 4% | 3% | 16% | 4% | 4% | Q1 increase primarily due to increased shipments of Hidden Valley®bottled salad dressing behind effective marketing. |
| International(2) | 4% | 3% | 2% | 0% | 2% | 3% | 3% | Q1 increase primarily driven by increased shipment of bleach and other disinfecting products due to increased demand as a result of the H1N1 flu virus outbreak. |
| Total Company | 4% | -1% | -3% | -2% | -1% | 1% | 1% | |
SupplementalInformation –SalesGrowth
| | % Change vs. Prior Year | |
| Reportable Segment | FY09 | FY10 | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | YTD | |
| Cleaning | 4% | -1% | 1% | 0% | 1% | 3% | 3% | Q1 increase primarily due to higher shipments of disinfecting products. |
| Household | 11% | -2% | -1% | 0% | 2% | -11% | -11% | Q1 sales declined more than volume due to increased trade-promotion spending on Glad® trash bags and cat litter products. |
| Lifestyle(1) | 45% | 37% | 5% | 7% | 20% | 3% | 3% | Q1 sales increase primarily due to higher shipments of Hidden Valley®bottled salad dressing. |
| International(2) | 10% | -4% | -4% | -3% | -1% | 4% | 4% | Q1 sales growth primarily due to increased volume growth and the benefit of price increases, offset by unfavorable currency. |
| Total Company | 12% | 3% | 0% | 0% | 3% | -1% | -1% | |
(1) | Lifestyle includes results of the worldwide Burt’s Bees business. |
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(2) | International includes Canadian results. |
The Clorox Company | |
Earnings Before Interest and Taxes (EBIT) and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)(1)
Reconciliation schedule of earnings before income taxes to EBIT, EBITDA, and debt to EBITDA
Dollars in millions and percentages based on rounded numbers
| | Three Months Ended |
| | 9/30/09 | | 9/30/08 |
| Earnings before income taxes | | $ | 244 | | | $ | 186 | |
| | | | | | | | | |
| Interest income | | | (1 | ) | | | (2 | ) |
| Interest expense | | | 36 | | | | 42 | |
| | | | | | | | | |
| EBIT(2) | | | 279 | | | | 226 | |
| EBIT margin(2) | | | 20.3 | % | | | 16.3 | % |
| | | | | | | | | |
| Depreciation and amortization | | | 48 | | | | 47 | |
| | | | | | | | | |
| EBITDA(3) | | $ | 327 | | | $ | 273 | |
| EBITDA margin(3) | | | 23.8 | % | | | 19.7 | % |
| | | | | | | | | |
| Net sales | | $ | 1,372 | | | $ | 1,384 | |
(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. |
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| Management believes the presentation of EBIT, EBIT margin, EBITDA and EBITDA margin provides additional useful information to investors about current trends in the business. |
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(2) | EBIT (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income and expense, as reported above. EBIT margin is a measure of EBIT as a percentage of net sales. |
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(3) | EBITDA (a non-GAAP measure) represents earnings before income taxes (a GAAP measure), excluding interest income, interest expense, depreciation and amortization, as reported above. EBITDA margin is a measure of EBITDA as a percentage of net sales. |
The Clorox Company | |
Supplemental Information – Balance Sheet
(Unaudited)
As of September 30, 2009
Working Capital Update | | | | | | |
| | | | | | |
| | Q1 | | | | |
| | FY 2010 | FY 2009 | Change | Days(5) | Days(5) | |
| | ($ millions) | ($ millions) | ($ millions) | FY 2010 | FY 2009 | Change |
| Receivables, net | $458 | | $455 | | $3 | 31 | 31 | None |
| Inventories, net | $392 | | $421 | | -$29 | 45 | 44 | +1 day |
| Accounts payable(1) | $330 | | $392 | | -$62 | 41 | 42 | -1 day |
| Accrued liabilities | $405 | | $367 | | $38 | | | |
| Total WC(2) | $130 | | $148 | | -$18 | | | |
| Total WC % net sales(3) | 2.4 | % | 2.7 | % | | | | |
| Average WC(2) | $83 | | $139 | | -$56 | | | |
| Average WC % net sales(4) | 1.5 | % | 2.5 | % | | | | |
- Inventoriesandaccounts payabledecreased primarily due to the timing of scheduled charcoal plant shutdown and lower commodity prices.
- Accrued liabilitiesincreased primarily due to restructuring-related accruals associated with the implementation of the operating model and an increase in dividend accruals as a result of an increased dividend rate.
Supplemental Information – Cash Flow
(Unaudited)
For the quarter ended September 30, 2009
Capital expenditures for the first quarter were $34 million
Depreciation and amortization for the first quarter was $48 million
Cash provided by operations
Net cash provided by operations in the first quarter was $94 million, compared with $93 million in the year-ago quarter. Cash provided by operations in the current quarter reflects higher net earnings, offset by a voluntary $33 million pension contribution.
(1) | Days of accounts payable is calculated as follows: average accounts payable / [(cost of products sold + change in inventory) / 90]. |
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(2) | Working capital (WC) is defined in this context as current assets minus current liabilities excluding cash and short-term debt, based on end of period balances. Average working capital represents a two-point average of working capital. |
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(3) | Represents working capital at the end of the period divided by annualized net sales(current quarter net sales x 4). |
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(4) | Represents a two-point average of working capital divided by annualized net sales(current quarter net sales x 4). |
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(5) | Days calculations based on a two-point average. |
The Clorox Company | |
SupplementalInformation –GrossMarginDrivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| | Change vs. Prior Year (basis points) |
| Driver | FY09 | FY10 |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 |
| Cost savings | +200 bp | +210 bp | +240 bp | +230 bp | +220 bp | +170 bp |
| Pricing changes | +230 bp | +350 bp | +310 bp | +250 bp | +280 bp | +170 bp |
| Market movement (commodities) | -460 bp | -450 bp | 0 bp | +160 bp | -170 bp | +240 bp |
| Manufacturing & logistics(1) | -250 bp | -120 bp | -90 bp | -150 bp | -160 bp | -40 bp |
| All other(2) | +80 bp | -30 bp | +90 bp | -120 bp | +10 bp | -90 bp |
| | | | | | | |
| Gross margin change vs prior year | -200 bp | -40 bp | +550 bp | +370 bp | +180 bp | +450 bp |
(1) | “Manufacturing & logistics” includes the change in the cost of diesel fuel. |
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(2) | “All other” includes all other drivers of gross margin change, which are usually insignificant in nature. Examples of drivers included: volume change, trade and consumer spending, restructuring and acquisition-related costs, foreign currency, etc. If a driver included in all other is deemed to be significant in a given period, it will be disclosed as part of the company’s earnings release. |
The Clorox Company
Updated: 11-2-09 | |
U.S. Pricing Actions from CY2005 - CY2009
| Brand / Product | Average Increase | | Effective Date |
| Home Care | | | | |
| Clorox Clean-Up®cleaners | 5% | | | July 2005 |
| Clorox Clean-Up®and Tilex®cleaners | 8% | | | January 2006 |
| 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®ToiletWandTMproducts | 8 – 13% | | | August 2008 |
| Laundry | | | | |
| Clorox 2®bleach for colors | 5% | | | July 2005 |
| Clorox®liquid bleach | 9% | | | July 2005 |
| Clorox®liquid bleach | 8% | | | January 2006 |
| Clorox®liquid bleach | 10% | | | August 2008 |
| Glad | | | | |
| Glad®trash bags | 13% | | | February 2005 |
| GladWare®disposable containers | 12% | | | February 2005 |
| Glad®food bags | 7% | | | August 2005 |
| GladWare®disposable containers | 9% | | | January 2006 |
| Glad®trash bags | 15% | | | February 2006 |
| Glad®trash bags (rescinded May 2009) | 7% | | | February 2008 |
| GladWare®disposable containers (rescinded April 2009) | 7% | | | February 2008 |
| Glad®trash bags (rescinded December 2008) | 10% | | | October 2008 |
| Litter | | | | |
| Cat litter | 5% | | | October 2005 |
| Cat litter | 6% | | | June 2006 |
| Cat litter | 7 – 8% | | | August 2008 |
| Food | | | | |
| Hidden Valley Ranch®salad dressing | 6% | | | October 2007 |
| Hidden Valley Ranch®salad dressing | 7% | | | August 2008 |
| Charcoal | | | | |
| Match Light®charcoal | 6% | | | January 2006 |
| Kingsford®lighter fluid | 10% | | | January 2006 |
| Charcoal and lighter fluid | 4 – 8% | | | January 2007 |
| Charcoal | 6% | | | January 2008 |
| Charcoal and lighter fluid | 7 – 16% | | | January 2009 |
The Clorox Company
Updated: 11-2-09 | |
U.S. Pricing Actions from CY2005 - CY2009 (Continued)
| Brand / Product | Average Increase | | Effective Date |
| Brita | | | | |
| Brita®pour-through filters | 7% | | | January 2006 |
| Brita®pitchers | 5% | | | January 2006 |
| Auto | | | | |
| Armor All®and STP®auto-care products | 9% | | | January 2006 |
| STP®functional fuel products | 17% | | | October 2006 |
| Armor All®and STP®auto-care products | 5 – 7% | | | January 2008 |
| Armor All®and STP®auto-care products | 5 – 10% | | | January 2009 |
Notes:
- Average % increase reflects brand averages rounded to the whole percent. Individual SKUs vary versus the average.
- This communication reflects pricing actions on primary items.
