Excellent Sales and Volume Growth Worldwide NEW YORK, Jan. 31, 2008
/PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL) today
announced excellent worldwide sales and unit volume growth together
with higher than expected earnings growth for fourth quarter 2007.
Worldwide sales grew 13.5% to $3,642.2 million and unit volume grew
5.0%, as reported. Excluding divestments, worldwide sales and unit
volume grew 14.0% and 5.5%, respectively. Global pricing increased
2.0% and foreign exchange added 6.5%. The very strong top-line
growth was supported by a 14% increase in worldwide advertising
spending. Fourth quarter 2007 results include $75.8 million of
aftertax charges related to the 2004 Restructuring Program. The
year ago quarter included restructuring charges of $65.1 million
and a gain on the sale of the Company's household bleach business
in Canada of $38.2 million aftertax. As reported, gross profit
margin increased 70 basis points to 56.1%. Excluding restructuring
charges, gross profit margin increased 90 basis points to a record
57.5% despite significant increases in worldwide commodity costs.
Operating profit as reported increased 7% versus fourth quarter
2006 to $675.6 million, 18.5% of sales. Excluding restructuring
charges and the prior year gain on the sale of the Company's
household bleach business in Canada as noted above, operating
profit rose 18% to $781.7 million. On the same basis, operating
profit margin was 21.5% of sales, up 80 basis points versus the
year ago period. The tax rate increased by 2.8 percentage points in
the fourth quarter due to the cost of increased remittances from
overseas subsidiaries and the one- time impact of statutory tax
rate changes in certain overseas subsidiaries. Reported net income
and diluted earnings per share in fourth quarter 2007 were $414.9
million and $.77, respectively. Excluding restructuring charges and
the prior year gain on the sale of the Company's household bleach
business in Canada, net income in the quarter increased 15% versus
fourth quarter 2006 to a record $490.7 million, and diluted
earnings per share increased 17% to $.91, also a record. In fourth
quarter 2006, reported net income and diluted earnings per share
were $401.2 million and $.73, respectively, and net income and
diluted earnings per share excluding restructuring charges and the
gain on the sale of the Company's household bleach business in
Canada were $428.1 million and $.78, respectively. Net cash
provided by operations year to date increased by 21% to $2,203.7
million after building inventories to support the business during
factory closings related to the 2004 Restructuring Program.
Colgate's strong balance sheet strengthened even further during the
period with key measures improving and net debt (debt less cash and
marketable securities) declining versus fourth quarter 2006. End of
fourth quarter 2007 working capital improved to 2.2% of sales
versus 2.3% in the comparable 2006 period. Ian Cook, President and
CEO commented, "We are delighted to have ended the year so strongly
on both the top and bottom lines. The excellent results were truly
across the board with every operating division increasing both
sales and operating profit in the quarter. "Pleasingly, the 90
basis point improvement in gross profit margin worldwide and other
savings programs allowed for strong levels of advertising
investment behind our global brands while still generating higher
than expected operating profit, net profit and earnings per share
for the quarter. "Consistent with our strategy to present higher
value offerings to the consumer, new premium priced products are
driving market share gains across categories in key countries
around the world. Colgate's global market shares in toothpaste,
manual toothbrushes, mouth rinse, bar soaps, shower gels and fabric
conditioners all finished the year at record highs." Mr. Cook
further commented, "Sales have started off well in 2008 across all
divisions, and we are confident that the strong top-line growth
momentum will continue, driven by our very full new product
pipeline with an array of impactful, integrated marketing campaigns
to support them. We expect gross profit margin, excluding
restructuring charges, to be up within our targeted range of 75 to
125 basis points for the year, as a result of our ongoing cost-
savings initiatives, the benefits from restructuring, efficiencies
in promotional programs and a continued shift towards higher-margin
products. "All this adds to our confidence that we will again
deliver our planned double-digit earnings per share growth in
2008." For the full year 2007, worldwide sales as reported
increased 12.5% to $13,789.7 million, an all-time high, including
6.5% unit volume growth, 1.0% higher pricing and 5.0% positive
foreign exchange. Global sales and global unit volume grew 13.0%
and 7.0%, respectively, excluding divestments. As reported, net
income and diluted earnings per share for the full year 2007 were
$1,737.4 million and $3.20, respectively. Full year 2007 results
include $183.7 million of aftertax charges related to the 2004
Restructuring Program, and Other Items totaling to a net gain of
$85.4 million aftertax (see Table 3 for 2007 Other Items details).
As reported, net income and diluted earnings per share for the full
year 2006 were $1,353.4 million and $2.46, respectively. Full year
2006 results include restructuring charges of $286.3 million and a
gain on the sale of the Company's household bleach business in
Canada of $38.2 million aftertax. Excluding restructuring charges
and Other Items in both periods, net income and diluted earnings
per share for full year 2007 increased 15% and 16%, respectively.
Share Repurchase Program On January 30, 2008, the Board of
Directors authorized a new 30 million share repurchase program. The
Company plans to repurchase the shares of common stock over the
next two years. The shares may be repurchased in open- market or
privately negotiated transactions. As of December 31, 2007, the
Company had approximately 509 million shares of common stock
outstanding. At 11:00 a.m. ET today, Colgate will host a conference
call to elaborate on fourth quarter results. To access this call as
a webcast, please go to Colgate's web site at
http://www.colgate.com/. The following are comments about
divisional performance. See attached Geographic Sales Analysis and
Segment Information schedules for additional information on
divisional sales and operating profit. North America (19% of
Company Sales) As reported, North American sales and unit volume
grew 6.5% and 4.5%, respectively, in the fourth quarter. Excluding
the divestiture of the Canadian household bleach business, sales
and unit volume grew 7.5% and 5.5%, respectively. Pricing increased
0.5% and foreign exchange added 1.5%. North American operating
profit increased 39% during the quarter to an all-time record
level, reflecting the benefits from restructuring and other cost
saving programs. In the U.S., new product launches at the
super-premium level are contributing to growth in oral care.
Colgate Total Advanced Clean toothpaste, supported by an integrated
marketing campaign featuring Brooke Shields and an expansive
professional sampling program, helped drive market share for
Colgate Total toothpaste to its highest quarterly share ever at
15.4%. Colgate Max Fresh BURST toothpaste continues to build
incremental market share for the Max Fresh equity, reaching a
record high of 3.9% for the year. Colgate's share of the manual
toothbrush market is at a record high of 25.6% year to date, up 1.8
share points versus year ago, fueled by the continued success of
Colgate 360 degree and Colgate 360 degree Sensitive manual
toothbrushes. Successful new products contributing to growth in the
U.S. in other categories include Irish Spring body wash for men,
Softsoap brand Nutra-Oil moisturizing body wash and Mennen Speed
Stick 24/7 deodorant. Fabuloso liquid cleaner, Suavitel fabric
conditioner and Irish Spring bar soap each achieved record high
market shares for the year in the U.S. New products planned for
launch in first quarter 2008 include Colgate Total Advanced
Whitening and Colgate Total Advanced Fresh toothpastes, Colgate 360
degree Deep Clean manual toothbrush, Colgate 360 degree Sonic Power
battery toothbrush, Suavitel Aroma Sensations fabric conditioner
and Mennen Speed Stick 24/7 deodorant with a new upgraded formula.
Latin America (26% of Company Sales) As reported, Latin American
sales and unit volume grew 15.5% and 5.0%, respectively, in the
fourth quarter. Excluding the divested bleach businesses, sales and
unit volume grew 17.0% and 6.5%, respectively, on top of
double-digit sales and volume growth in the year ago period. The
strong volume gains were led by Brazil, Venezuela, Argentina and
Central America. Higher pricing added 4.5% and foreign exchange
added 6.0%. Latin American operating profit increased 19%, to a
record level even after a strong double- digit increase in
advertising during the quarter. Colgate continues to build its
strong leadership in oral care throughout Latin America with its
regional toothpaste market share at a record high year to date
driven by market share gains in nearly every country. Strong sales
of premium priced offerings such as Colgate Total Professional
Clean, Colgate Sensitive and Colgate Max White toothpastes drove
share gains throughout the region. In Mexico, for example,
Colgate's toothpaste market share reached a record high at 83.9%
year to date, up 230 basis points versus year ago. Colgate's
leading share of the manual toothbrush market for the region is at
a record high year to date at 36.9%, up 270 basis points versus
year ago. Strong sales of Colgate 360 degree and Colgate 360 degree
Sensitive manual toothbrushes throughout the region contributed to
this success. In other product categories, Colgate Plax Alcohol
Free and Colgate Plax Ice mouthwashes, Palmolive Naturals Yogurt
and Fruits, Palmolive Nutri-Milk and Protex Deo 12 bar soaps, Axion
Tri-Cloro dish liquid, Lady Speed Stick Double Defense multi-form
deodorant, Palmolive Caprice shampoo and Palmolive Nutri-Milk
shower gel contributed to market share gains in the region.
Europe/South Pacific (24% of Company Sales) Europe/South Pacific
sales increased 16.0% to a record level, and unit volume grew 7.0%
in the fourth quarter. Pricing was negative 3.0% and foreign
exchange added 12.0%. The strong volume gains were led by the Gaba
business, the United Kingdom, France, Denmark, Poland, Spain,
Greece, Switzerland and Australia. Operating profit for the region
grew 6% to a record level, on top of very strong growth in the year
ago period and even after a significant increase in advertising
during the quarter. Colgate increased its oral care leadership in
Europe/South Pacific with its regional toothpaste market share
reaching a record high for the year. These toothpaste share gains
were led by Austria, Belgium, Denmark, France, Germany, Norway,
Spain, the United Kingdom, Poland, Romania and Australia.
Successful premium products driving these share gains include
Colgate Total and Colgate Max Fresh toothpastes. Gaba's toothpaste
market share also grew in many markets across the region, in both
the food and pharmacy channels. In the manual toothbrush category,
strong sales of Colgate 360 degree, Colgate 360 degree Sensitive
and Colgate Max Fresh toothbrushes strengthened Colgate's market
leadership in this category for the region. Recent premium
innovations contributing to gains in other product categories
include Colgate 360 degree Sonic Power battery toothbrush, Colgate
Plax Whitening mouth rinse, Palmolive Pure Cashmere and Palmolive
Aromatherapy Happyful shower gels, Palmolive Soft and Gentle Eden
deodorant, and Ajax Professional bucket dilutable and Ajax
Professional glass cleaners. Greater Asia/Africa (17% of Company
Sales) Greater Asia/Africa sales and unit volume increased 18.5%
and 6.5%, respectively. The strong volume gains were led by India,
Russia and the rest of the CIS countries, Malaysia, South Africa,
the Gulf States and the Greater China region, where volume
increased double-digit for the third consecutive quarter. For the
division as a whole, pricing increased 3.0% and foreign exchange
added 9.0%. Operating profit for the region increased 30% to an
all- time record level, even after a sizable increase in
advertising spending during the quarter. Colgate strengthened its
oral care leadership in the Greater Asia region with 11 out of 14
countries reporting toothpaste market share gains versus year ago
led by India, China, Philippines, Thailand, Russia and the rest of
the CIS countries. Colgate's share of the manual toothbrush market
also strengthened throughout the region with many countries
achieving record high shares in the category. Successful new
products driving the oral care growth include Colgate Total
Professional Clean, Colgate Herbal Seabuckthorn, Colgate Herbal Gel
and Darlie Double Action toothpastes, and Colgate 360 degree,
Colgate 360 degree Sensitive and Colgate Twister Fresh manual
toothbrushes. New products contributing to growth in other
categories in the region include Palmolive Vitamins and Oil shower
gel, Palmolive Thermal Spa Seabuckthorn shower gel, bar soap and
liquid hand soap, Palmolive Pure Cashmere shower cream and bar
soap, and Lady Speed Stick for Teens multi-form deodorant. Hill's
(14% of Company Sales) Hill's sales grew 10% and unit volume
declined 0.5% during the quarter on top of the very strong volume
growth in the year ago period. Foreign exchange added 3.0% and
pricing increased 7.5%. Operating profit increased 3% to an
all-time record level, on top of very strong growth in the year ago
period and after significantly higher agricultural commodity costs
during the quarter. Market share gains in the U.S. specialty pet
channel during the quarter were driven by strong sales of Science
Diet Adult Large Breed Canine, Science Diet Lamb Meal & Rice
Adult Small Bites Canine and Science Diet Nature's Best Canine with
upgraded all natural ingredients. Science Diet Indoor Cat and
Science Diet Light contributed to growth in feline. Prescription
Diet c/d Multicare Feline, a therapeutic food for the nutritional
management of cats with Feline Lower Urinary Tract Disease,
Prescription Diet j/d Canine and new Prescription Diet
Hypoallergenic Treats for dogs and cats drove growth in the U.S.
veterinary channel. Internationally, growth was strong, led by
South Africa, the Nordic region, Australia, Spain and Russia. New
pet food products contributing to the international growth include
Prescription Diet j/d Light Canine, Science Plan Chunks in Gravy
Feline pouches and Prescription Diet c/d Multicare Feline. * * *
About Colgate-Palmolive: Colgate-Palmolive is a leading global
consumer products company, tightly focused on Oral Care, Personal
Care, Home Care and Pet Nutrition. Colgate sells its products in
over 200 countries and territories around the world under such
internationally recognized brand names as Colgate, Palmolive,
Mennen, Softsoap, Irish Spring, Protex, Sorriso, Kolynos, Elmex,
Tom's of Maine, Ajax, Axion, Soupline, and Suavitel, as well as
Hill's Science Diet and Hill's Prescription Diet. For more
information about Colgate's global business, visit the Company's
web site at http://www.colgate.com/. The Company's annual meeting
of shareholders is currently scheduled for Thursday, May 8, 2008.
Unless otherwise indicated, all market share data included in this
press release is as measured by ACNielsen. This press release and
the related webcast (other than historical information) may contain
forward-looking statements. Such statements may relate, for
example, to sales or volume growth, profit growth, earnings growth,
financial goals, cost-reduction plans, estimated charges and
savings associated with the 2004 Restructuring Program and new
product introductions. These statements are made on the basis of
our views and assumptions as of this time and we undertake no
obligation to update these statements. We caution investors that
any such forward-looking statements are not guarantees of future
performance and that actual events or results may differ materially
from those statements. Investors should consult the Company's
filings with the Securities and Exchange Commission (including the
information set forth under the captions "Risk Factors" and
"Cautionary Statement on Forward-Looking Statements" in the
Company's Form 10-K for the year ended December 31, 2006) for
information about certain factors that could cause such
differences. Copies of these filings may be obtained upon request
from the Company's Investor Relations Department or the Company's
web site at http://www.colgate.com/. Non-GAAP Financial Measures
The following provides information regarding the non-GAAP measures
used in this earnings release: To supplement Colgate's condensed
consolidated income statements presented in accordance with
accounting principles generally accepted in the United States of
America (GAAP), the Company has disclosed non-GAAP measures of
operating results that exclude certain items. Net sales, cost of
sales, gross profit margin, selling, general and administrative
expenses, operating profit, operating profit margin, other (income)
expense, the provision for income taxes and effective tax rate, net
income, and earnings per share are discussed in this release both
as reported (on a GAAP basis) and excluding the impact of certain
items reported in the corporate segment, as explained below: -- The
restructuring charges relate to the restructuring program that
began in the fourth quarter of 2004 and is expected to be
substantially completed by the end of 2008 (the "2004 Restructuring
Program"). These restructuring charges include separation-related
costs, incremental depreciation and asset write-downs, and other
costs related to the implementation of the 2004 Restructuring
Program. In light of their nature and magnitude, the Company
believes these items should be presented separately to enhance an
investor's overall understanding of its ongoing operations. -- The
four Other Items, which pertained to the twelve months ended
December 31, 2007, are comprised of the gain on sale of the
Company's household bleach business in Latin America, a charge
related to the limited voluntary product recall of certain Hill's
feline products, tax adjustments which consist of the reduction of
a tax loss carryforward valuation allowance in Brazil, partially
offset by tax provisions for the recapitalization of certain
overseas subsidiaries, all of which occurred in the first quarter
of 2007, and a third quarter 2007 charge associated with certain
pension obligations in accordance with Statement of Financial
Accounting Standards (SFAS) No. 88, "Employers' Accounting for
Settlement and Curtailments of Defined Benefit Pension Plans and
for Termination Benefits" ( "SFAS 88 charge"). The amount of each
such excluded item for the twelve months ended December 31, 2007 is
set forth in the table entitled "Supplemental Consolidated Income
Statement Information - Other Items" included with this release. In
light of their nature and magnitude, the Company believes that
these four Other Items should be presented separately to enhance an
investor's overall understanding of its ongoing operations. -- The
2006 gain on the sale of the Company's household bleach business in
Canada. To enhance an investor's ability to make period over period
comparisons, the Company believes this item should be presented
separately to enhance an investor's overall understanding of its
ongoing operations. Management believes these non-GAAP financial
measures provide useful information to investors regarding the
underlying business trends and performance of the Company's ongoing
operations and are useful for period over period comparisons of
such operations. The Company uses these financial measures
internally in its budgeting process and as factors in determining
compensation. While the Company believes that these financial
measures are useful in evaluating the Company's business, this
information should be considered as supplemental in nature and is
not meant to be considered in isolation or as a substitute for the
related financial information prepared in accordance with GAAP. In
addition, these non-GAAP financial measures may not be the same as
similar measures presented by other companies. See "Consolidated
Income Statement and Supplemental Information - Reconciliation
Excluding the 2004 Restructuring Program and Other Items" for the
three and twelve months ended December 31, 2007 and 2006 included
with this release for a reconciliation of these financial measures
to the related GAAP measures. Sales and unit volume growth, both
worldwide and in relevant geographic divisions, and operating
profit in certain geographic divisions are discussed in this
release both as reported and excluding divestments. Management
believes this provides useful information to investors as it allows
comparisons of sales growth and volume growth and operating profit
from ongoing operations. See "Geographic Sales Analysis, Percentage
Changes - Fourth Quarter 2007 vs. 2006" for a comparison of sales
excluding divestments to sales as reported in accordance with GAAP.
The Company defines free cash flow before dividends as net cash
provided by operations less capital expenditures. As management
uses this measure to evaluate the Company's ability to satisfy
current and future obligations, repurchase stock, pay dividends and
fund future business opportunities, the Company believes that it
provides useful information to investors. Free cash flow before
dividends is not a measure of cash available for discretionary
expenditures since the Company has certain non-discretionary
obligations such as debt service that are not deducted from the
measure. Free cash flow before dividends is not a GAAP measurement
and may not be comparable to similarly titled measures reported by
other companies. (See attached tables for fourth quarter results.)
Table 1 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Items For the Three Months Ended
December 31, 2007 and 2006 (in Millions Except Per Share Amounts)
(Unaudited) 2007 Excluding As Reported Restructuring Restructuring
Net sales $3,642.2 $- $3,642.2 Cost of sales 1,599.0 50.0 1,549.0
Gross profit 2,043.2 (50.0) 2,093.2 Gross profit margin 56.1% 57.5%
Selling, general and administrative expenses 1,301.4 16.2 1,285.2
Other (income) expense, net 66.2 39.9 26.3 Operating profit 675.6
(106.1) 781.7 Operating profit margin 18.5% 21.5% Interest expense,
net 35.0 - 35.0 Income before income taxes 640.6 (106.1) 746.7
Provision for income taxes 225.7 (30.3) 256.0 Effective tax rate
35.2% 34.3% Net income 414.9 (75.8) 490.7 Earnings per common share
Basic $0.80 $(0.15) $0.95 Diluted $0.77 $(0.14) $0.91 Average
common shares outstanding Basic 509.9 509.9 509.9 Diluted 542.2
542.2 542.2 2006 Excluding Gain on Restructuring As Bleach &
Other Reported Restructuring Sale Items Net sales $3,209.1 $- $-
$3,209.1 Cost of sales 1,432.5 39.4 - 1,393.1 Gross profit 1,776.6
(39.4) - 1,816.0 Gross profit margin 55.4% 56.6% Selling, general
and administrative expenses 1,145.0 15.5 - 1,129.5 Other (income)
expense, net (1.1) 22.8 (46.5) 22.6 Operating profit 632.7 (77.7)
46.5 663.9 Operating profit margin 19.7% 20.7% Interest expense,
net 38.9 - - 38.9 Income before income taxes 593.8 (77.7) 46.5
625.0 Provision for income taxes 192.6 (12.6) 8.3 196.9 Effective
tax rate 32.4% 31.5% Net income 401.2 (65.1) 38.2 428.1 Earnings
per common share Basic $0.77 $(0.13) $0.08 $0.82 Diluted $0.73
$(0.12) $0.07 $0.78 Average common shares outstanding Basic 514.4
514.4 514.4 514.4 Diluted 549.6 549.6 549.6 549.6 Note: Basic and
diluted earnings per share for the "As Reported", "Excluding
Restructuring" and "Excluding Restructuring & Other Items" are
computed independently for each quarter and the twelve months
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the four quarters' earnings per share
may not necessarily equal the earnings per share for the twelve
months. In addition, the impact of "Restructuring" and "Gain on
Bleach Sale" on the basic and diluted earnings per share may not
necessarily equal the earnings per share if calculated
independently as a result of rounding. Table 2 Colgate-Palmolive
Company Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the 2004 Restructuring Program and Other
Items For the Twelve Months Ended December 31, 2007 and 2006 (in
Millions Except Per Share Amounts) (Unaudited) 2007 Excluding As
Other Restructuring Reported Restructuring Items(a) & Other
Items Net sales $13,789.7 $- $(2.1) $13,791.8 Cost of sales 6,042.3
153.8 (1.1) 5,889.6 Gross profit 7,747.4 (153.8) (1.0) 7,902.2
Gross profit margin 56.2% 57.3% Selling, general and administrative
expenses 4,973.0 49.1 - 4,923.9 Other (income) expense, net 121.3
55.6 (20.6) 86.3 Operating profit 2,653.1 (258.5) 19.6 2,892.0
Operating profit margin 19.2% 21.0% Interest expense, net 156.6 - -
156.6 Income before income taxes 2,496.5 (258.5) 19.6 2,735.4
Provision for income taxes 759.1 (74.8) (65.8) 899.7 Effective tax
rate 30.4% 32.9% Net income 1,737.4 (183.7) 85.4 1,835.7 Earnings
per common share Basic $3.35 $(0.36) $0.17 $3.54 Diluted $3.20
$(0.34) $0.16 $3.38 Average common shares outstanding Basic 510.8
510.8 510.8 510.8 Diluted 543.7 543.7 543.7 543.7 2006 Gain on
Excluding As Bleach Restructuring Reported Restructuring Sale &
Other Items Net sales $12,237.7 $- $- $12,237.7 Cost of sales
5,536.1 196.2 - 5,339.9 Gross profit 6,701.6 (196.2) - 6,897.8
Gross profit margin 54.8% 56.4% Selling, general and administrative
expenses 4,355.2 46.1 - 4,309.1 Other (income) expense, net 185.9
153.1 (46.5) 79.3 Operating profit 2,160.5 (395.4) 46.5 2,509.4
Operating profit margin 17.7% 20.5% Interest expense, net 158.7 - -
158.7 Income before income taxes 2,001.8 (395.4) 46.5 2,350.7
Provision for income taxes 648.4 (109.1) 8.3 749.2 Effective tax
rate 32.4% 31.9% Net income 1,353.4 (286.3) 38.2 1,601.5 Earnings
per common share Basic $2.57 $(0.56) $0.07 $3.06 Diluted $2.46
$(0.52) $0.07 $2.91 Average common shares outstanding Basic 515.2
515.2 515.2 515.2 Diluted 550.5 550.5 550.5 550.5 (a) See Table 3
Supplemental Consolidated Income Statement Information - Other
Items for details. Note: Basic and diluted earnings per share for
the "As Reported" and "Excluding Restructuring & Other Items"
are computed independently for each quarter and the twelve months
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the four quarters' earnings per share
may not necessarily equal the earnings per share for the twelve
months. In addition, the impact of "Restructuring", "Other Items"
and "Gain on Bleach Sale" on the basic and diluted earnings per
share may not necessarily equal the earnings per share if
calculated independently as a result of rounding. Table 3
Colgate-Palmolive Company Supplemental Consolidated Income
Statement Information Other Items For the Twelve Months Ended
December 31, 2007 (in Millions Except Per Share Amounts)
(Unaudited) Twelve Months Ended December 31, 2007 Hill's Gain on
Product SFAS 88 Total Bleach Voluntary Tax Pension Other Sale
Recall Adjustments* Charges Items Net sales $- $(2.1) $- $- $(2.1)
Cost of sales - (1.1) - - (1.1) Gross profit - (1.0) - - (1.0)
Selling, general and administrative expenses - - - - - Other
(income) expense, net (48.6) 12.6 - 15.4 (20.6) Operating profit
48.6 (13.6) - (15.4) 19.6 Interest expense, net - - - - - Income
before income taxes 48.6 (13.6) - (15.4) 19.6 Provision for income
taxes 18.9 (5.4) (73.9) (5.4) (65.8) Net income 29.7 (8.2) 73.9
(10.0) 85.4 Earnings per common share Basic $0.06 $(0.02) $0.15
$(0.02) $0.17 Diluted $0.05 $(0.01) $0.14 $(0.02) $0.16 * Reduction
of tax loss carryforward valuation allowances in Brazil of $94.6,
partially offset by tax provisions for the recapitalization of
certain overseas subsidiaries. Table 4 Colgate-Palmolive Company
Condensed Consolidated Balance Sheets As of December 31, 2007 and
2006 (Dollars in Millions) (Unaudited) December 31, December 31,
2007 2006 Cash and cash equivalents $428.7 $489.5 Receivables, net
1,680.7 1,523.2 Inventories 1,171.0 1,008.4 Other current assets
338.1 279.9 Property, plant and equipment, net 3,015.2 2,696.1
Other assets, including goodwill and intangibles 3,478.3 3,140.9
Total assets $10,112.0 $9,138.0 Total debt 3,515.9 3,671.2 Other
current liabilities 2,868.7 2,518.3 Other non-current liabilities
1,441.2 1,537.6 Total liabilities 7,825.8 7,727.1 Total
shareholders' equity 2,286.2 1,410.9 Total liabilities and
shareholders' equity $10,112.0 $9,138.0 Supplemental Balance Sheet
Information Debt less cash and marketable securities* $3,064.6
$3,170.2 Working capital % of sales 2.2% 2.3% * Marketable
securities of $22.6 and $11.5 as of December 31, 2007 and 2006,
respectively, are included in Other current assets. Table 5
Colgate-Palmolive Company Condensed Consolidated Statements of Cash
Flows For the years ended December 31, 2007 and 2006 (Dollars in
Millions) (Unaudited) 2007 2006 Operating Activities Net income
$1,737.4 $1,353.4 Adjustments to reconcile net income to net cash
provided by operations: Restructuring, net of cash 21.3 145.4
Depreciation and amortization 333.9 328.7 Gain before tax on sale
of non-core product lines (48.6) (46.5) Stock-based compensation
expense 110.3 116.9 Deferred income taxes (147.4) (23.2) Cash
effects of changes in: Receivables (66.5) (116.0) Inventories
(111.5) (118.5) Accounts payable and other accruals 366.2 149.9
Other non-current assets and liabilities 8.6 31.4 Net cash provided
by operations 2,203.7 1,821.5 Investing Activities Capital
expenditures (583.1) (476.4) Sale of property and non-core product
lines 109.7 59.4 Payment for acquisitions, net of cash acquired
(26.5) (200.0) Other (28.4) (3.4) Net cash used in investing
activities (528.3) (620.4) Financing Activities Principal payments
on debt (1,737.8) (1,332.0) Proceeds from issuance of debt 1,513.1
1,471.1 Dividends paid (749.6) (677.8) Purchases of treasury shares
(1,269.4) (884.7) Proceeds from exercise of stock options and
excess tax benefits 489.3 364.4 Net cash used in financing
activities (1,754.4) (1,059.0) Effect of exchange rate changes on
cash and cash equivalents 18.2 6.7 Net (decrease)/increase in Cash
and cash equivalents (60.8) 148.8 Cash and cash equivalents at
beginning of period 489.5 340.7 Cash and cash equivalents at end of
period $428.7 $489.5 Supplemental Cash Flow Information Free cash
flow before dividends (net cash provided by operations less capital
expenditures) Net cash provided by operations $2,203.7 $1,821.5
Less: Capital expenditures (583.1) (476.4) Free cash flow before
dividends $1,620.6 $1,345.1 Income taxes paid $646.5 $647.9 Table 6
Colgate-Palmolive Company Segment Information For the Three and
Twelve Months Ended December 31, 2007 and 2006 (Dollars in
Millions) (Unaudited) Three Months Ended Twelve Months Ended
December 31, December 31, 2007 2006 2007 2006 Net sales Oral,
Personal and Home Care North America $699.2 $657.7 $2,720.8
$2,590.8 Latin America 944.0 816.4 3,488.9 3,019.5 Europe/South
Pacific 881.5 759.6 3,383.3 2,952.3 Greater Asia/Africa 611.6 516.4
2,337.6 2,006.0 Total Oral, Personal and Home Care $3,136.3
$2,750.1 $11,930.6 $10,568.6 Pet Nutrition 505.9 459.0 1,859.1
1,669.1 Total Net sales $3,642.2 $3,209.1 $13,789.7 $12,237.7 Three
Months Ended Twelve Months Ended December 31, December 31, 2007
2006 2007 2006 Operating profit Oral, Personal and Home Care North
America $182.0 $131.4 $666.8 $550.1 Latin America 263.6 221.0
1,006.0 872.9 Europe/South Pacific 198.1 186.1 763.8 681.2 Greater
Asia/Africa 103.6 79.4 362.8 278.7 Total Oral, Personal and Home
Care $747.3 $617.9 $2,799.4 $2,382.9 Pet Nutrition 133.3 129.5
487.8 447.9 Corporate (205.0) (114.7) (634.1) (670.3) Total
Operating profit $675.6 $632.7 $2,653.1 $2,160.5 The Company
evaluates segment performance based on several factors, including
Operating profit. The Company uses Operating profit as a measure of
operating segment performance because it excludes the impact of
corporate- driven decisions related to interest expense and income
taxes. Corporate operations include restructuring and related
implementation costs, stock-based compensation related to stock
options and restricted stock awards, research and development
costs, Corporate overhead costs, gains and losses on sales of
non-core brands and assets, and SFAS 88 pension charges. For the
three months ended December 31, 2007 and 2006, Corporate operating
expenses include $106.1 and $77.7 of charges related to the
Company's 2004 Restructuring Program, respectively. For the twelve
months ended December 31, 2007 and 2006, Corporate operating
expenses include $258.5 and $395.4 of charges related to the
Company's 2004 Restructuring Program, respectively. Additionally,
Corporate operating expenses for the twelve months ended December
31, 2007 were increased by SFAS 88 pension charges of $15.4. For
the twelve months ended December 31, 2007, Corporate operating
expenses were reduced by a $48.6 gain related to the sale of the
Company's household bleach business in Latin America. For the three
and twelve months ended December 31, 2006, Corporate operating
expenses were reduced by a $46.5 gain related to the sale of the
Company's household bleach business in Canada. As a result of a
limited voluntary recall of Hill's product in March 2007, Pet
Nutrition Net sales for the twelve months ended December 31, 2007
were reduced by $2.1 and Corporate operating expenses increased by
$13.6. Table 7 Colgate-Palmolive Company Geographic Sales Analysis
Percentage Changes - Fourth Quarter 2007 vs 2006 December 31, 2007
(Unaudited) COMPONENTS OF SALES CHANGE FOURTH QUARTER Pricing 4th
Qtr 4th Qtr Coupons Sales Sales Consumer & Change As Change Ex-
Ex-Divested Trade Region Reported Divestment Volume Incentives
Exchange Total Company 13.5% 14.0% 5.5% 2.0% 6.5% Europe/South
Pacific 16.0% 16.0% 7.0% (3.0%) 12.0% Latin America 15.5% 17.0%
6.5% 4.5% 6.0% Greater Asia/Africa 18.5% 18.5% 6.5% 3.0% 9.0% Total
International 16.5% 17.0% 6.5% 1.5% 9.0% North America 6.5% 7.5%
5.5% 0.5% 1.5% Total CP Products 14.0% 15.0% 6.5% 1.0% 7.5% Hill's
10.0% 10.0% (0.5%) 7.5% 3.0% COMPONENTS OF SALES CHANGE TWELVE
MONTHS Pricing 12 Months 12 Months Coupons Sales Sales Consumer
& Change As Change Ex- Ex-Divested Trade Region Reported
Divestment Volume Incentives Exchange Total Company 12.5% 13.0%
7.0% 1.0% 5.0% Europe/South Pacific 14.5% 14.5% 6.5% (2.0%) 10.0%
Latin America 15.5% 17.0% 10.5% 2.5% 4.0% Greater Asia/Africa 16.5%
16.5% 8.5% 1.5% 6.5% Total International 15.5% 16.0% 8.5% 0.5% 7.0%
North America 5.0% 6.5% 5.5% 0.5% 0.5% Total CP Products 13.0%
13.5% 7.5% 0.5% 5.5% Hill's 11.5% 11.5% 3.5% 5.5% 2.5% DATASOURCE:
Colgate-Palmolive Company CONTACT: Bina Thompson, +1-212-310-3072,
Hope Spiller, +1-212-310-2291, both of Colgate-Palmolive Company
Web site: http://www.colgate.com/
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