The Clorox Company |  |
Supplemental Unaudited Condensed Information –Volume Growth
| | % Change vs. Prior Year | |
| Reportable Segments | FY14(1) | FY15(1) | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | YTD | |
| Cleaning | 0% | 3% | -5% | 0% | -1% | -1% | -1% | Q1 volume decrease driven by lower shipments of Clorox® disinfecting wipes and Clorox® bleach, partially offset by higher shipments of Clorox® toilet bowl cleaner. |
| Household | 2% | -1% | 5% | -2% | 1% | 4% | 4% | Q1 volume increase driven by higher shipments of Kingsford® Charcoal and Glad® OdorShield® trash bags, partially offset by Glad® base trash bags. |
| Lifestyle | 4% | -1% | -1% | 2% | 1% | 0% | 0% | Q1 volume was flat driven by higher shipments of Burt’s Bees® products, offset by lower shipments of Hidden Valley® salad dressings and Brita® products. |
| International | 1% | 3% | 1% | 2% | 2% | 5% | 5% | Q1 volume increase driven by higher shipments in Latin America, Europe and Asia. |
| Total Company | 1% | 1% | 0% | 0% | 1% | 1% | 1% | |
Supplemental Unaudited Condensed Information –Sales Growth
| | % Change vs. Prior Year | |
| Reportable Segments | FY14(1) | FY15(1) | Major Drivers of Change |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 | YTD | |
| Cleaning | 1% | 2% | -4% | -1% | 0% | -2% | -2% | Q1 variance between volume and sales driven by higher trade promotion spending, primarily on Clorox® disinfecting wipes. |
| Household | 5% | -1% | 4% | -2% | 1% | 5% | 5% | Q1 variance between volume and sales driven by the benefit of price increases. |
| Lifestyle | 5% | 0% | -3% | 2% | 1% | -1% | -1% | Q1 variance between volume and sales was about flat. |
| International | -2% | 1% | -6% | -6% | -3% | 0% | 0% | Q1 variance between volume and sales driven by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. |
| Total Company | 2% | 0% | -2% | -2% | 0% | 1% | 1% | |
(1)Volume growth and sale growthpercentagechanges for theInternationalreportablesegment and TotalCompany reflect thereclassification of CloroxVenezuela todiscontinuedoperationseffective Q1 fiscal 2015 for allperiodspresented.
The Clorox Company | |
SupplementalUnauditedCondensedInformation – Gross Margin Drivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| | GrossMarginChange vs. Prior Year (basispoints) |
Driver | FY14 | FY15 |
| | Q1 | Q2 | Q3 | Q4 | FY | Q1 |
| Cost Savings | +180 | +150 | +140 | +110 | +140 | +120 |
PriceChanges | +80 | +70 | +80 | +80 | +80 | +90 |
MarketMovement(commodities) | -110 | -140 | -120 | -110 | -120 | -40 |
Manufacturing &Logistics | -140 | -120 | -120 | -240 | -160 | -170 |
All other(1) | -10 | -20 | -10 | -10 | -10 | -70 |
Impact of CloroxVenezuela exitreclassification(2) | +30 | +10 | - | +40 | +20 | - |
| | | | | | | |
Change vs prior year | +30 | -50 | -30 | -130 | -50 | -70 |
GrossMargin (%) | 43.5% | 42.4% | 42.1% | 42.9% | 42.7% | 42.8% |
| (1) | In Q1 of fiscal year 2015, ‘All other’ includes -50 bps of higher trade promotion spending. |
(2) | Grossmargin drivers reflect thereclassification of CloroxVenezuela todiscontinuedoperationseffective Q1 fiscal 2015. Fiscal years 2013 and 2014 grossmargin drivers have notchanged and anydifferences to grossmargin based on thisreclassification arereflected here. |
The Clorox Company | |
Supplemental Information – Balance Sheet
(Unaudited)
As of September 30, 2014
Working Capital Update
| Q1 | | | | |
| FY 2015 | FY 2014 | Change | Days(5) | Days(5) | |
| ($ millions) | ($ millions) | ($ millions) | FY 2015 | FY 2014 | Change |
| Receivables, net | $455 | | $506 | | -$51 | | 33 | 36 | -3 |
| Inventories, net | $397 | | $439 | | -$42 | | 46 | 49 | -3 |
| Accounts payable(1) | $385 | | $374 | | $11 | | 47 | 44 | +3 |
| Accrued liabilities | $478 | | $468 | | $10 | | | | |
| Total WC(2) | $91 | | $213 | | -$122 | | | | |
| Total WC % net sales(3) | 1.7 | % | 4.0 | % | | | | | |
| Average WC(2) | $119 | | $201 | | -$82 | | | | |
| Average WC % net sales(4) | 2.2 | % | 3.7 | % | | | | | |
Receivables: Decrease driven primarily by increased collections and the impact from foreign exchange rates.
Inventories: Decrease primarily driven by higher sales in the Charcoal business and the write-off of inventory resulting from Clorox Venezuela’s discontinued operations.
| (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 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 and year ended September 30, 2014
Capital expenditures for the first quarter were $29 million versus $27 million in the year-ago quarter.
Depreciation and amortization for the first quarter and the year ago period were both $43 million, respectively.
Net cash provided by continuing operations in the first quarter was $234 million, or 17 percent of sales.
The Clorox Company | |
Supplemental Unaudited Condensed Information
Fiscal Year to Date Free Cash Flow Reconciliation
| | Q1 | | Q1 |
| | Fiscal | | Fiscal |
| | YTD | | YTD |
| | 2015 | | 2014 |
| Net cash provided by continuing operations – GAAP | | $234 | | $184 |
| Less: Capital expenditures | | 29 | | 27 |
| Free cash flow – non-GAAP(1) | | $205 | | $157 |
| Free cash flow as a percent of sales – non-GAAP(1) | | 15.2% | | 11.7% |
| Net sales | | $1,352 | | $1,343 |
| (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. |
The Clorox Company | |
Supplemental unaudited reconciliation of earnings from continuing operations before income taxes to EBIT(1)(3)and EBITDA(2)(3)
(Adjusted to reflect Clorox Venezuela reclassified to discontinued operations)
Dollars in millions and percentages based on rounded numbers
| FY 2014 | | | FY 2015 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Q1 | | Q2 | | Q3 | | Q4 | | FY | | | Q1 |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| 9/30/13 | | 12/31/13 | | 3/31/14 | | 6/30/14 | | 6/30/14 | | | 9/30/14 |
| Earnings from continuing operations | $ | 211 | | | $ | 184 | | | $ | 226 | | | $ | 263 | | | $ | 884 | | | | $ | 218 | |
| before income taxes | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest income | | (1 | ) | | | - | | | | (1 | ) | | | (1 | ) | | | (3 | ) | | | | (1 | ) |
| Interest expense | | 26 | | | | 26 | | | | 25 | | | | 26 | | | | 103 | | | | | 26 | |
| EBIT(1)(3) | | 236 | | | | 210 | | | | 250 | | | | 288 | | | | 984 | | | | | 243 | |
| EBIT margin(1)(3) | | 17.6% | | | | 16.1% | | | | 18.3% | | | | 19.2% | | | | 17.8% | | | | | 18.0% | |
| Depreciation and amortization | | 43 | | | | 45 | | | | 43 | | | | 46 | | | | 177 | | | | | 43 | |
| EBITDA(2)(3) | $ | 279 | | | $ | 255 | | | $ | 293 | | | $ | 334 | | | $ | 1,161 | | | | $ | 286 | |
| EBITDA margin(2)(3) | | 20.8% | | | | 19.5% | | | | 21.4% | | | | 22.3% | | | | 21.1% | | | | | 21.2% | |
| Net sales | $ | 1,343 | | | $ | 1,308 | | | $ | 1,366 | | | $ | 1,497 | | | $ | 5,514 | | | | $ | 1,352 | |
| Total debt(4) | | | | | | | | | | | | | | | | | $ | 2,313 | | | | $ | 2,224 | |
| Debt to EBITDA(3)(5) | | | | | | | | | | | | | | | | | | 2.0 | | | | | 1.9 | |
| (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. |
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| (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. |
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| (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. |
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| (4) | | Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt. |
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| (5) | | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. The Company calculates debt to Adjusted EBITDA for compliance with its debt covenants using Adjusted EBITDA for the trailing four quarters, as contractually defined. |
The Clorox Company | |
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 |
| Green Works®cleaners | | +21 | % | | | July 2014 |
| 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 |
| Glad®trash bags | | +6 | % | | | November 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.
