The Clorox Company |  |
Supplemental Information –Volume Growth
| % Change vs. Prior Year | |||||||||
| Reportable Segment | FY12 | FY13 | Major Drivers of Change | ||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | ||
| Cleaning(1) | -1% | 0% | 7% | 5% | 2% | 4% | 13% | 8% | Q2 increase primarily driven by higher shipments in the Professional Products business due to prior year acquisitions and base business growth, higher shipments of Clorox® Disinfecting Wipes, and the continued roll out of new concentrated Clorox® liquid bleach. |
| Household | 5% | 1% | 2% | -2% | 1% | -7% | 1% | -3% | Q2 increase primarily driven by higher shipments of Kingsford® and Match Light® charcoal products, partially offset by lower shipments of Glad® food storage products. |
| Lifestyle | 5% | 2% | 4% | 2% | 3% | -1% | 7% | 3% | Q2 increase primarily driven by higher shipments of Burt’s Bees® and Hidden Valley® products, partially offset by lower shipments of Brita® pour-though water filtration products. |
| International | 4% | -1% | 1% | 3% | 2% | -2% | -3% | -2% | Q2 decrease primarily driven by lower shipments in Latin America and Canada. |
| Total Company | 2% | 0% | 4% | 2% | 2% | -1% | 5% | 2% | |
Supplemental Information –Sales Growth
| % Change vs. Prior Year | |||||||||
| Reportable Segment | FY12 | FY13 | Major Drivers of Change | ||||||
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | YTD | ||
| Cleaning(1) | -2% | 5% | 10% | 7% | 5% | 8% | 15% | 11% | Q2 sales outpaced volume due to the benefit of price increases. |
| Household | 3% | 4% | 6% | 3% | 4% | -3% | 7% | 2% | Q2 sales outpaced volume due to the benefit of price increases and favorable product mix. |
| Lifestyle | 6% | 6% | 10% | 3% | 6% | 1% | 8% | 5% | Q2 sales were driven by shipment gains. |
| International | 10% | 0% | 4% | 3% | 4% | 3% | 3% | 3% | Q2 sales outpaced volume due to the benefit of price increases. |
| Total Company | 3% | 4% | 7% | 4% | 5% | 3% | 9% | 5% | |
| (1) | The Cleaning reportable segment includes the December 2011 acquisitions of HealthLink and Aplicare, Inc. |
The Clorox Company | |
SupplementalInformation –GrossMarginDrivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| Gross Margin Change vs. Prior Year (basis points) | ||||||||
| Driver | FY11 | FY12 | FY13 | |||||
| FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | |
| Cost Savings | +170 | +160 | +180 | +160 | +150 | +160 | +170 | +190 |
| Price Changes | +80 | +170 | +240 | +250 | +230 | +220 | +160 | +120 |
| Market Movement (commodities)(1) | -160 | -320 | -240 | -200 | -110 | -220 | -10 | -10 |
| Manufacturing & Logistics(1) | -30 | -220 | -170 | -200 | -140 | -180 | -70 | -200 |
| All other | -140 | -40 | -30 | -190 | -210 | -120 | -140 | - |
| Change vs prior year | -80 | -250 | -20 | -180 | -80 | -140 | +110 | +100 |
| Gross Margin (%) | 43.5% | 41.8% | 41.5% | 42.3% | 42.7% | 42.1% | 42.9% | 42.5% |
| (1) | Market Movement (commodities) beginning in Q1 FY13 includes the change in the cost of diesel fuel. In FY11 and FY12, the change in the cost of diesel fuel is included in Manufacturing & Logistics. |
The Clorox Company | |
Reconciliation of earnings from continuing operations before income taxes to EBIT(1)and EBITDA(2)(3)
Dollars in millions and percentages based on rounded numbers
| FY 2012 | FY 2013 | |||||||||||||||||||||||||||
| Q1 9/30/11 | Q2 12/31/11 | Q3 3/31/2012 | Q4 6/30/12 | FY 6/30/12 | Q1 9/30/12 | Q2 12/31/12 | ||||||||||||||||||||||
| Earnings from continuing operations | ||||||||||||||||||||||||||||
| before income taxes | $ | 187 | $ | 155 | $ | 198 | $ | 251 | $ | 791 | $ | 194 | $ | 188 | ||||||||||||||
| Interest income | (1 | ) | (1 | ) | - | (1 | ) | (3 | ) | - | (1 | ) | ||||||||||||||||
| Interest expense | 29 | 30 | 33 | 33 | 125 | 33 | 33 | |||||||||||||||||||||
| EBIT(1) | 215 | 184 | 231 | 283 | 913 | 227 | 220 | |||||||||||||||||||||
| EBIT margin(1) | 16.5% | 15.1% | 16.5% | 18.4% | 16.7% | 17.0% | 16.6% | |||||||||||||||||||||
| Depreciation and amortization | 46 | 43 | 44 | 45 | 178 | 44 | 46 | |||||||||||||||||||||
| EBITDA(2) | $ | 261 | $ | 227 | $ | 275 | $ | 328 | $ | 1,091 | $ | 271 | $ | 266 | ||||||||||||||
| EBITDA margin(2) | 20.0% | 18.6% | 19.6% | 21.3% | 20.0% | 20.3% | 20.1% | |||||||||||||||||||||
| Net sales | $ | 1,305 | $ | 1,221 | $ | 1,401 | $ | 1,541 | $ | 5,468 | $ | 1,338 | $ | 1,325 | ||||||||||||||
| (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 a measure of EBIT as a percentage of 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 a measure of EBITDA as a percentage of 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 and EBITDA margin provides additional useful information to investors about current trends in the business. Note: The Company calculates EBITDA for compliance with its debt covenants using net earnings for the trailing four quarters, as contractually defined. | |
The Clorox Company | |
Supplemental Information – Balance Sheet
(Unaudited)
As of December 31, 2012
Working Capital Update
| Q2 | |||||||||
| FY 2013 | FY 2012 | Change | Days(5) | Days(5) | |||||
| ($ millions) | ($ millions) | ($ millions) | FY 2013 | FY 2012 | Change | ||||
| Receivables, net | $511 | $489 | $22 | 34 | 34 | -- | |||
| Inventories, net | $444 | $451 | -$7 | 51 | 54 | -3 days | |||
| Accounts payable(1) | $365 | $345 | $20 | 43 | 42 | +1 days | |||
| Accrued liabilities | $493 | $438 | $55 | ||||||
| Total WC(2) | $239 | $240 | -$1 | ||||||
| Total WC % net sales(3) | 4.5 | % | 4.9 | % | |||||
| Average WC(2) | $222 | $190 | $32 | ||||||
| Average WC % net sales(4) | 4.2 | % | 3.9 | % | |||||
- Receivables increased primarily due to higher sales.
- Accounts Payable increased primarily due to timing of payments and spending; as well as higher capital spending for infrastructure investments.
- Accrued liabilities increased primarily due to higher trade-promotion spending accruals and increase in incentive compensation accruals.
| (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, 2012
Capital expenditures for the second quarter were $48 million versus $45 million in the year-ago quarter.
Depreciation and amortization for the second quarter was $46 million versus $43 million in the year-ago quarter.
Net cash provided by operations in the second quarter was $117 million, or 9 percent of sales.
The Clorox Company | |
Supplemental Information – Fiscal Year to Date Free Cash Flow Reconciliation
| Fiscal | Fiscal | |||
| 2013 | 2012 | |||
| Net cash provided by operations – GAAP | $325 | $168 | ||
| Less: Capital expenditures | 102 | 82 | ||
| Free cash flow – non-GAAP(1) | $223 | $86 | ||
| Free cash flow as a percent of sales – non-GAAP(1) | 8.4% | 3.4% | ||
| Net sales | $2,663 | $2,526 |
| (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. | |
| The Clorox Company Updated: 2-4-13 |
|
U.S. Retail Pricing Actions from CY2009 - CY2013
| 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®cleaners, Formula 409®, and Clorox®Disinfecting | |||||
| Bathroom 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 | |||
| 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 | |||
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.