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The CloroxCompany |
SupplementalUnauditedCondensedInformation –VolumeGrowth
Reportable
Segments | % Change vs. Prior Year | |
| FY18 | FY19 | Major Drivers of Change |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | 5% | 2% | 4% | 2% | 3% | -1% | Q1 decrease in volume driven primarily by lower shipments in Home Care and Laundry. |
| Household | 7% | 0% | 3% | 0% | 2% | -2% | Q1 decrease in volume driven primarily by lower shipments in Charcoal and Glad, partially offset by higher shipments in Cat Litter. |
| Lifestyle | 2% | 3% | 0% | 27% | 8% | 35% | Q1 increase driven primarily by the benefit of the Nutranext acquisition, higher shipments in Burt’s Bees® natural personal care and food products. |
| International | -2% | 0% | 3% | -1% | 0% | 2% | Q1 increase driven primarily by higher shipments in Canada. |
| Total Company | 4% | 1% | 3% | 5% | 3% | 5% | |
SupplementalUnauditedCondensedInformation –SalesGrowth
Reportable
Segments | % Change vs. Prior Year | |
| FY18 | FY19 | Major Drivers of Change |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 | |
| Cleaning | 5% | 1% | 3% | 3% | 3% | 2% | Q1 variance between volume and sales driven primarily by the benefit of price increases. |
| Household | 5% | -3% | 1% | -3% | 0% | 0% | Q1 variance between volume and sales driven primarily by lower trade promotion spending and the benefit of price increases, partially offset by unfavorable mix. |
| Lifestyle | 4% | 3% | 2% | 21% | 8% | 26% | Q1 variance between volume and sales driven primarily by the unfavorable mix and higher trade promotion spending. |
| International | 1% | 4% | 4% | -2% | 2% | -5% | Q1 variance between volume and sales driven primarily by unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. |
| Total Company | 4% | 1% | 3% | 3% | 3% | 4% | |
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The CloroxCompany |
SupplementalUnauditedCondensedInformation –GrossMarginDrivers
The table belowprovides details on the drivers of grossmarginchange versus the prior year.
| Gross Margin Change vs. Prior Year (basis points) |
| Driver | FY18 | FY19 |
| Q1 | Q2 | Q3 | Q4 | FY | Q1 |
| Cost Savings | +160 | +170 | +140 | +120 | +140 | +130 |
| Price Changes | +40 | +30 | +50 | +50 | +40 | +90 |
| Market Movement (commodities) | -90 | -110 | -160 | -130 | -130 | -130 |
| Manufacturing & Logistics | -80 | -240 | -220 | -110 | -160 | -280 |
| All other(1) | +20 | -20 | +70 | -100 | +10 | +40 |
| Change vs prior year | +50 | -170 | -120 | -170 | -100 | -150 |
| Gross Margin (%) | 44.9% | 43.0% | 42.8% | 44.0% | 43.7% | 43.4% |
| (1) | In Q4 of fiscal year 2018, “All other” includes about -60bps of negative impact from costs related to the Nutranext acquisition. |
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The CloroxCompany |
Supplemental Unaudited Condensed Information –Balance Sheet
As of September 30, 2018
Working Capital Update
Dollars in Millions and percentages based on rounded numbers
| Q1 | | Q1 | |
| FY 2019 | FY 2018 | Change | Days(4) | Days(4) | Change |
| ($ millions) | ($ millions) | ($ millions) | FY 2019 | FY 2018 | |
| Receivables, net | $568 | $531 | $37 | 34 | 33 | +1 |
| Inventories, net | $519 | $462 | $57 | 52 | 50 | +2 |
| Accounts payable and Accrued Liabilities | $947 | $912 | $35 | | | |
| Total WC(1) | $200 | $89 | $111 | | | |
| Total WC % net sales(2) | 3.2% | 1.5% | | | | |
| Average WC(1) | $190 | $90 | $100 | | | |
| Average WC % net sales(3) | 3.0% | 1.5% | | | | |
| (1) | 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. |
| (2) | Represents working capital at the end of the period divided by (net sales for current quarter x 4). |
| (3) | Represents a two-point average of working capital divided by (net sales for current quarter x 4). |
| (4) | Days calculations based on a two-point average. |
Supplemental Unaudited Condensed Information –Cash Flow
For the quarter ended September 30, 2018
Capital expenditures for the first quarter were $36 million versus $49 million in the year-ago quarter.
Depreciation and amortization expense for the first quarter was $44 million versus $40 million in the year-ago quarter.
Net cash provided by continuing operations in the first quarter was $259 million, or 16.6% of net sales.
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The CloroxCompany |
Supplemental Unaudited Condensed Information –Free Cash Flow
Fiscal Year Free Cash Flow Reconciliation
Dollars in Millions and percentages based on rounded numbers
| | Q1
Fiscal
Year
2019 | | Q1
Fiscal
Year
2018 (2) |
| Net cash provided by continuing operations – GAAP | | | $259 | | | | $259 | |
| Less: Capital expenditures | | | $36 | | | | $49 | |
| Free cash flow – non-GAAP(1) | | | $223 | | | | $210 | |
| Free cash flow as a percentage of net sales – non-GAAP(1) | | | 14.3% | | | | 14.0% | |
| Net sales | | | $1,563 | | | | $1,500 | |
| (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 percentage of net 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 stock 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. |
| | These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures and should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP. |
| (2) | Net cash provided by continuing operations and free cash flow have been adjusted to reflect the retrospective adoption of Accounting Standards Update No. 2016-18, “Statement of Cash Flows (Topic 230): Restricted Cash,” effective July 1, 2018. |
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The CloroxCompany |
Supplemental Unaudited 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 2018 | | | FY 2019 |
| | | | | |
| | Q1 | | Q2 | | Q3 | | Q4 | | FY | | | Q1 |
| | | | | | | | | | | | | |
| | 9/30/17 | | 12/31/17 | | 3/31/18 | | 6/30/18 | | 6/30/18 | | | 9/30/18 |
| Earnings from continuing operations before income taxes | | $279 | | $227 | | $242 | | $306 | | $1,054 | | | $268 |
| Interest income | | -$1 | | -$2 | | -$1 | | -$2 | | -$6 | | | -$1 |
| Interest expense | | $21 | | $20 | | $20 | | $24 | | $85 | | | $24 |
| EBIT(1)(3) | | $299 | | $245 | | $261 | | $328 | | $1,133 | | | $291 |
| EBIT margin(1)(3) | | 19.9% | | 17.3% | | 17.2% | | 19.4% | | 18.5% | | | 18.6% |
| Depreciation and amortization | | $40 | | $41 | | $40 | | $45 | | $166 | | | $44 |
| EBITDA(2)(3) | | $339 | | $286 | | $301 | | $373 | | $1,299 | | | $335 |
| EBITDA margin(2)(3) | | 22.6% | | 20.2% | | 19.8% | | 22.1% | | 21.2% | | | 21.4% |
| Net sales | | $1,500 | | $1,416 | | $1,517 | | $1,691 | | $6,124 | | | $1,563 |
| Total debt(4) | | $2,200 | | $2,283 | | $2,855 | | $2,483 | | $2,483 | | | $2,565 |
| Debt to EBITDA(3)(5) | | 1.7 | | 1.8 | | 2.2 | | 1.9 | | 1.9 | | | 2.0 |
| (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 useful additional information to investors about trends in the company's operations and is useful for period-over-period comparisons. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the company’s consolidated financial statements presented in accordance with GAAP. |
| (4) | Total debt represents the sum of notes and loans payable, current maturities of long-term debt and long-term debt. Current maturities of long-term debt and long-term debt are carried at face value net of unamortized discounts, premiums and debt issuance costs. |
| (5) | Debt to EBITDA (a non-GAAP measure) represents total debt divided by EBITDA for the trailing four quarters. |
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