Press Releases
Church & Dwight Announces Q2 2018 Results
2018 Second Quarter Results | 2018 Full Year Outlook Raised | ||
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Q2 net sales grew 14.5% to
Second Quarter Review
Consumer Domestic net sales were
Specialty Products net sales were
Gross margin decreased 140 basis points to 44.3%. The decrease
was impacted by higher commodities and transportation costs. In
addition, reported results include a -70 basis point impact from a
voluntary recall and a
Marketing expense was
Selling, general, and administrative expense (SG&A) was
Income from Operations was
Other Expense was
The effective tax rate was 21.7% compared to 37.6% in 2017. This
change was primarily due to the impact of the Q2 2017 U.K. pension
settlement and the Tax Cuts and Jobs Act (“TCJA”) enacted in the U.S. in
Operating Cash Flow
For the first six months of 2018, net cash from operating activities was
At
2018 New Products
Mr. Farrell commented, “Innovation continues to be a big driver of our success. In support of our long-term strategy to drive revenue and earnings growth, we have launched new products in several categories. We launched ARM & HAMMER CLUMP & SEAL lightweight unscented cat litter with guaranteed 7-day odor control building on the success of our innovative CLUMP & SEAL franchise. We expanded our ODOR BLASTERS laundry platform leveraging technology that eliminates tough odors and are seeing strong consumption results. We introduced new VITAFUSION and L’IL CRITTERS probiotics gummy vitamins supporting digestive health by providing friendly bacteria in a great tasting gummy. WATERPIK launched a water flosser to restore whiteness while flossing. TROJAN has launched NIRVANA, an assortment of sensation condoms celebrating self-expression in an exclusive package design. BATISTE continues to expand distribution with three unique fragrances leveraging its #1 U.S. share position.”
Outlook for 2018
Mr. Farrell stated, “We now expect full year sales growth to exceed 9%
and organic sales growth to be approximately 3.5%. We now expect full
year gross margin to contract 120 basis points which now reflects higher
logistics costs and the Q2 voluntary recall and
For Q3, we expect reported sales growth of approximately 5% and organic
sales growth of approximately 3%. We expect EPS to approximate
This press release contains forward-looking statements, including,
among others, statements relating to net sales and earnings growth;
gross margin changes; trade and marketing spending; marketing expense as
a percentage of net sales; sufficiency of cash flows from operations;
earnings per share; cost savings programs; consumer demand and spending;
the effects of competition; the effect of product mix; volume growth,
including the effects of new product launches into new and existing
categories; the impact of competitive laundry detergent products,
including unit dose laundry detergent; the impact of foreign exchange
and commodity price fluctuations; the impact of acquisitions and
divestitures; capital expenditures; the impact of pension settlement
charges; the impact of U.S. tax reform and the Company’s effective tax
rate. These statements represent the intentions, plans, expectations and
beliefs of the Company, and are based on assumptions that the Company
believes are reasonable but may prove to be incorrect.In
addition, these statements are subject to risks, uncertainties and other
factors, many of which are outside the Company’s control and could cause
actual results to differ materially from such forward-looking statements.Factors that could cause such differences include a decline in market
growth, retailer distribution and consumer demand (as a result of, among
other things, political, economic and marketplace conditions and
events); unanticipated increases in raw material and energy prices;
delays or other problems in manufacturing or distribution; increases in
transportation costs; adverse developments affecting the financial
condition of major customers and suppliers; changes in marketing and
promotional spending; growth or declines in various product categories
and the impact of customer actions in response to changes in consumer
demand and the economy, including increasing shelf space of private
label products; consumer and competitor reaction to, and customer
acceptance of, new product introductions and features; the Company’s
ability to maintain product quality and characteristics at a level
acceptable to our customers and consumers; disruptions in the banking
system and financial markets; foreign currency exchange rate
fluctuations; implications of the United Kingdom’s withdrawal from the
For a description of additional factors that could cause actual
results to differ materially from the forward-looking statements, please
see Item 1A, “Risk Factors” in the Company’s annual report on Form 10-K.The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by the U.S. federal
securities laws.You are advised, however, to consult any further
disclosures the Company makes on related subjects in its filings with
the
This press release also contains non-GAAP financial information.Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of the Company’s financial performance, identifying trends in its results and providing meaningful period-to-period comparisons. The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations. 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 financial statements presented in accordance with GAAP.
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES |
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Three Months Ended | Six Months Ended | |||||||||||||||
(In millions, except per share data) | June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
Net Sales | $ | 1,027.9 | $ | 898.0 | $ | 2,033.9 | $ | 1,775.2 | ||||||||
Cost of sales | 573.0 | 487.6 | 1,127.5 | 965.5 | ||||||||||||
Gross Profit | 454.9 | 410.4 | 906.4 | 809.7 | ||||||||||||
Marketing expenses | 136.4 | 130.9 | 236.3 | 221.7 | ||||||||||||
Selling, general and administrative expenses | 144.7 | 156.3 | 276.0 | 268.7 | ||||||||||||
Income from Operations | 173.8 | 123.2 | 394.1 | 319.3 | ||||||||||||
Equity in earnings of affiliates | 2.4 | 3.1 | 4.5 | 5.2 | ||||||||||||
Other income (expense), net | (20.8 | ) | (9.5 | ) | (42.5 | ) | (17.5 | ) | ||||||||
Income before Income Taxes | 155.4 | 116.8 | 356.1 | 307.0 | ||||||||||||
Income taxes | 33.7 | 43.9 | 76.6 | 102.6 | ||||||||||||
Net Income | $ | 121.7 | $ | 72.9 | $ | 279.5 | $ | 204.4 | ||||||||
Net Income per share - Basic | $ | 0.50 | $ | 0.29 | $ | 1.14 | $ | 0.81 | ||||||||
Net Income per share - Diluted | $ | 0.49 | $ | 0.29 | $ | 1.12 | $ | 0.79 | ||||||||
Dividends per share | $ | 0.22 | $ | 0.19 | $ | 0.43 | $ | 0.38 | ||||||||
Weighted average shares outstanding - Basic | 244.8 | 249.8 | 244.9 | 252.0 | ||||||||||||
Weighted average shares outstanding - Diluted | 249.3 | 255.6 | 249.7 | 257.7 | ||||||||||||
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES |
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(Dollars in millions) | June 30, 2018 | December 31, 2017 | |||||
Assets | |||||||
Current Assets | |||||||
Cash and Cash Equivalents | $ | 89.3 | $ | 278.9 | |||
Accounts Receivable | 348.6 | 345.9 | |||||
Inventories | 369.2 | 330.7 | |||||
Other Current Assets | 63.3 | 44.7 | |||||
Total Current Assets | 870.4 | 1,000.2 | |||||
Property, Plant and Equipment (Net) | 593.1 | 607.7 | |||||
Equity Investment in Affiliates | 9.4 | 9.3 | |||||
Trade Names and Other Intangibles | 2,311.9 | 2,320.5 | |||||
Goodwill | 1,992.9 | 1,958.9 | |||||
Other Long-Term Assets | 121.7 | 118.2 | |||||
Total Assets | $ | 5,899.4 | $ | 6,014.8 | |||
Liabilities and Stockholders’ Equity | |||||||
Short-Term Debt | $ | 110.8 | $ | 270.9 | |||
Current portion of Long-Term debt | 299.5 | - | |||||
Other Current Liabilities | 690.5 | 664.1 | |||||
Total Current Liabilities | 1,100.8 | 935.0 | |||||
Long-Term Debt | 1,802.6 | 2,103.4 | |||||
Other Long-Term Liabilities | 774.9 | 758.4 | |||||
Stockholders’ Equity | 2,221.1 | 2,218.0 | |||||
Total Liabilities and Stockholders’ Equity | $ | 5,899.4 | $ | 6,014.8 | |||
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES |
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Six Months Ended | ||||||||
(Dollars in millions) | June 30, 2018 | June 30, 2017 | ||||||
Net Income | $ | 279.5 | $ | 204.4 | ||||
Depreciation and amortization | 69.9 | 59.2 | ||||||
Deferred income taxes | 1.2 | 11.3 | ||||||
Non-cash compensation | 15.9 | 12.3 | ||||||
Non-cash pension settlement charge | - | 31.7 | ||||||
Other | (1.4 | ) | (1.3 | ) | ||||
Subtotal | 365.1 | 317.6 | ||||||
Changes in assets and liabilities: | ||||||||
Accounts receivable | (4.8 | ) | (6.8 | ) | ||||
Inventories | (39.1 | ) | (30.1 | ) | ||||
Other current assets | (5.5 | ) | (10.4 | ) | ||||
Accounts payable and accrued expenses | 13.9 | (14.2 | ) | |||||
Income taxes payable | (8.1 | ) | (10.7 | ) | ||||
Other | 1.2 | 3.9 | ||||||
Net cash from operating activities | 322.7 | 249.3 | ||||||
Capital expenditures | (19.6 | ) | (10.4 | ) | ||||
Acquisitions | (49.8 | ) | (235.3 | ) | ||||
Other | (1.8 | ) | 3.4 | |||||
Net cash (used in) investing activities | (71.2 | ) | (242.3 | ) | ||||
Net change in long-term debt | - | 200.0 | ||||||
Net change in short-term debt | (159.8 | ) | 202.6 | |||||
Payment of cash dividends | (106.2 | ) | (95.7 | ) | ||||
Proceeds from stock option exercises | 28.9 | 27.3 | ||||||
Purchase of treasury stock | (200.0 | ) | (300.0 | ) | ||||
Deferred financing and other | (2.4 | ) | (1.0 | ) | ||||
Net cash (used in) provided by financing activities | (439.5 | ) | 33.2 | |||||
F/X impact on cash | (1.6 | ) | 9.6 | |||||
Net change in cash and cash equivalents | $ | (189.6 | ) | $ | 49.8 | |||
2018 and 2017 Product Line Net Sales |
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Three Months Ended | Percent | |||||||||||
6/30/2018 | 6/30/2017 | Change | ||||||||||
Household Products | $ | 429.9 | $ | 410.8 | 4.6 | % | ||||||
Personal Care Products | 344.2 | 267.4 | 28.7 | % | ||||||||
Consumer Domestic | $ | 774.1 | $ | 678.2 | 14.1 | % | ||||||
Consumer International | 176.1 | 145.1 | 21.4 | % | ||||||||
Total Consumer Net Sales | $ | 950.2 | $ | 823.3 | 15.4 | % | ||||||
Specialty Products Division | 77.7 | 74.7 | 4.0 | % | ||||||||
Total Net Sales | $ | 1,027.9 | $ | 898.0 | 14.5 | % | ||||||
Six Months Ended | Percent | |||||||||||
6/30/2018 | 6/30/2017 | Change | ||||||||||
Household Products | $ | 842.9 | $ | 805.3 | 4.7 | % | ||||||
Personal Care Products | 682.6 | 532.6 | 28.2 | % | ||||||||
Consumer Domestic | $ | 1,525.5 | $ | 1,337.9 | 14.0 | % | ||||||
Consumer International | 356.8 | 288.2 | 23.8 | % | ||||||||
Total Consumer Net Sales | $ | 1,882.3 | $ | 1,626.1 | 15.8 | % | ||||||
Specialty Products Division | 151.6 | 149.1 | 1.7 | % | ||||||||
Total Net Sales | $ | 2,033.9 | $ | 1,775.2 | 14.6 | % | ||||||
Non-GAAP Measures:
The following discussion addresses the non-GAAP measures used in this press release and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures. These non-GAAP financial measures should not be considered in isolation from or as a substitute for the comparable GAAP measures. The following non-GAAP measures may not be the same as similar measures provided by other companies due to differences in methods of calculation and items and events being excluded.
Organic Sales Growth:
This press release provides information regarding organic sales growth, namely net sales growth excluding the effect of acquisitions, divestitures and foreign exchange rate changes. Management believes that the presentation of organic sales growth is useful to investors because it enables them to assess, on a consistent basis, sales trends related to products that were marketed by the Company during the entirety of relevant periods, excluding the impact of acquisitions and excluding foreign exchange rate changes that are out of the control of, and do not reflect the performance of the Company and management.
Adjusted SG&A Expense:
This press release presents information regarding adjusted SG&A, namely
selling, general and administrative expenses excluding the 2017 charge
related to our
Adjusted EPS:
This press release also presents adjusted earnings per share, namely,
EPS calculated in accordance with GAAP, as adjusted to exclude
significant one-time items that are not indicative of the Company’s
period-to-period performance. We believe that this metric provides
investors a useful perspective of underlying business trends and results
and provides useful supplemental information regarding our
year-over-year EPS growth. Adjusted 2017 EPS excludes a charge related
to the Brazil Specialty Products business, a settlement charge related
to the
Adjusted Operating Cash Flow:
This press release also presents adjusted operating cash flow, namely,
operating cash flow calculated in accordance with GAAP, as adjusted to
exclude significant one-time items that are not indicative of the
Company’s period-to-period performance. We believe that this metric
provides investors a useful perspective of underlying business trends
and provides useful supplemental information regarding our year over
year cash flow. Adjusted 2017 cash flow excludes cash payments for the
CHURCH & DWIGHT CO., INC. |
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Three Months Ended 6/30/2018 | ||||||||||||||||||
Total | Worldwide | Consumer | Consumer | Specialty | ||||||||||||||
Company | Consumer | Domestic | International | Products | ||||||||||||||
Reported Sales Growth | 14.5% | 15.4% | 14.1% | 21.4% | 4.0% | |||||||||||||
Less: | ||||||||||||||||||
Acquisitions | 9.6% | 9.6% | 9.1% | 11.8% | 9.1% | |||||||||||||
Add: | ||||||||||||||||||
FX / Other | -0.5% | -0.5% | 0.0% | -2.8% | 0.0% | |||||||||||||
Divestitures | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% | |||||||||||||
Organic Sales Growth | 4.4% | 5.3% | 5.0% | 6.8% | -5.1% | |||||||||||||
Six Months Ended 6/30/2018 | ||||||||||||||||||
Total | Worldwide | Consumer | Consumer | Specialty | ||||||||||||||
Company | Consumer | Domestic | International | Products | ||||||||||||||
Reported Sales Growth | 14.6% | 15.8% | 14.0% | 23.8% | 1.7% | |||||||||||||
Less: | ||||||||||||||||||
Acquisitions | 9.9% | 10.3% | 9.7% | 11.8% | 8.4% | |||||||||||||
Add: | ||||||||||||||||||
FX / Other | -0.9% | -0.9% | 0.0% | -5.2% | 0.0% | |||||||||||||
Divestitures | 0.3% | 0.0% | 0.0% | 0.0% | 3.6% | |||||||||||||
Organic Sales Growth | 4.1% | 4.6% | 4.3% | 6.8% | -3.1% | |||||||||||||
CHURCH & DWIGHT CO., INC. |
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(Dollars in millions, except per share data) | |||||||||||||||||||||
For the quarter ended June 30, 2018 |
For the quarter ended June 30, 2017 |
Change | |||||||||||||||||||
Adjusted SG&A Reconciliation |
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SG&A - Reported | $ | 144.7 | 14.1 | % | $ | 156.3 | 17.4 | % | (330 | ) | bps | ||||||||||
U.K. Pension Settlement | $ | - | 0.0 | % | $ | (39.2 | ) | -4.4 | % | 440 | bps | ||||||||||
SG&A - Adjusted (non-GAAP) | $ | 144.7 | 14.1 | % | $ | 117.1 | 13.0 | % | 110 | bps | |||||||||||
Adjusted Diluted Earnings Per Share Reconciliation |
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Diluted Earnings Per Share - Reported | $ | 0.49 | $ | 0.29 | 69.0 | % | |||||||||||||||
U.K. Pension Settlement | $ | - | $ | 0.12 | |||||||||||||||||
Diluted Earnings Per Share - Adjusted (non-GAAP) | $ | 0.49 | $ | 0.41 | 19.5 | % | |||||||||||||||
For the six months ended | |||||||||||||
June 30, 2018 |
June 30, 2017 |
Change | |||||||||||
Adjusted Cash From Operating Activities |
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Net Cash From Operating Activities - Reported | $ | 322.7 | $ | 249.3 | $ | 73.4 | |||||||
U.K. Pension Settlement & Deferred Compensation | $ | - | $ | 25.0 | $ | (25.0 | ) | ||||||
Net Cash From Operating Activities - Adjusted (non-GAAP) | $ | 322.7 | $ | 274.3 | $ | 48.4 | |||||||
CHURCH & DWIGHT CO., INC. |
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Reported and Organic Forecasted Sales Reconciliation |
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For the Quarter | For the Year | |||||
Ended | Ended | |||||
September 30, 2018 | December 31, 2018 | |||||
Reported Sales Growth | 5% | 9% | ||||
Less: | ||||||
Acquisitions | 2% | 5.5% | ||||
Organic Sales Growth | 3% | 3.5% | ||||
For the quarter ended | ||||||||||||
Sept. 30, 2018 |
Sept. 30, 2017 |
Change | ||||||||||
Forecasted Adjusted Diluted Earnings Per Share Reconciliation |
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Diluted Earnings Per Share - Reported | $ | 0.53 | $ | 0.52 | 1.9 | % | ||||||
Joint Venture Impairment Tax Benefit | $ | - | $ | (0.03 | ) | |||||||
Diluted Earnings Per Share - Adjusted (non-GAAP) | $ | 0.53 | $ | 0.49 | 8.2 | % | ||||||
Forecasted Adjusted Diluted Earnings Per Share Reconciliation |
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For the Year Ended December 31, | |||||||||||
2018 | 2017 | % Change | |||||||||
Diluted Earnings Per Share - Reported | $ | 2.26 - 2.28 | $ | 2.90 | -21% to -22% | ||||||
Brazil Charge | $ | - | $ | 0.01 | |||||||
U.K. Pension Settlement Charge | $ | - | $ | 0.12 | |||||||
Joint Venture Impairment Tax Benefit | $ | - | $ | (0.03 | ) | ||||||
U.S. TCJA Tax Reform | $ | - | $ | (1.06 | ) | ||||||
Diluted Earnings Per Share - Adjusted (non-GAAP) | $ | 2.26 - 2.28 | $ | 1.94 | 17% to 18% | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20180802005230/en/
Source:
Church & Dwight Co., Inc.
Rick Dierker, 609-806-1200
Chief
Financial Officer