Clorox Co News - CLX

The Clorox Company Reports Sales and Profit Growth for Its First Quarter; Confirms Outlook for Sales and EPS From Continuing Operations

The Clorox CompanyOctober 31, 2014 8:30 AM

OAKLAND, CA--(Marketwired - Oct 31, 2014) - For its first quarter, which ended Sept. 30, The Clorox Company (NYSE: CLX) today reported 1 percent sales growth and 5 percent growth in diluted net earnings per share (EPS) from continuing operations. This excludes the impact of the previously announced discontinued operations of Corporación Clorox de Venezuela S.A. (Clorox Venezuela). On a currency-neutral basis, sales grew nearly 3 percent.

"I'm pleased with our solid start to the fiscal year," said Chairman and CEO Don Knauss. "In the first quarter, we continued to invest in incremental demand-building programs to reinforce the value of our brands. As a result, despite continuing headwinds, we delivered sales and profit growth for the quarter and saw improved market shares in a number of our categories."

As previously announced, Clorox Venezuela discontinued operations effective Sept. 22, 2014. For the current and year-ago quarters, the results from Clorox Venezuela are now included in discontinued operations on the company's financial statements. All results in this press release are reported on a continuing operations basis, unless otherwise stated. Some information in this release is reported on a non-GAAP basis. See "Non-GAAP Financial Information" below and the tables toward the end of this press release for more information and reconciliations of key first-quarter results to the most directly comparable financial measures calculated in accordance with generally accepted accounting principles in the U.S. (GAAP).

Fiscal First-Quarter Results

Following is a summary of key first-quarter results. All comparisons are with the first quarter of fiscal year 2014, unless otherwise stated.

$1.10 diluted EPS1% volume growth1% sales growth (nearly 3% growth on currency-neutral basis)

In the first quarter, Clorox delivered earnings from continuing operations of $145 million, or $1.10 diluted EPS, compared to $139 million, or $1.05 diluted EPS, in the year-ago quarter. Current-quarter results reflect the benefit of strong cost savings, price increases and volume growth as well as a one-time benefit of approximately 5 cents diluted EPS related to a one-time change in the company's long-term disability plan to make it more consistent with the marketplace. These factors were partially offset by the impact of higher manufacturing and logistics costs, continued incremental demand-building initiatives of $16 million, or 8 cents diluted EPS, and the impact of unfavorable foreign currency exchange rates.

In the first quarter, sales grew 1 percent, primarily due to the benefit of price increases in international markets and higher volume. These results were partially offset by the impact of unfavorable foreign currency exchange rates as well as higher trade promotion spending. Excluding the impact of nearly 2 percentage points from unfavorable foreign currency exchange rates, sales grew nearly 3 percent. Volume for the first quarter was up 1 percent, reflecting increased shipments in the International Division, Charcoal and Natural Personal Care businesses, partially offset by decreases in the Home Care and Laundry businesses.

The company's first-quarter gross margin decreased 70 basis points to 42.8 percent versus 43.5 percent in the year-ago quarter. The benefits of cost savings and price increases were more than offset by significantly higher manufacturing and logistics costs, with about half coming from the international markets, primarily Argentina, and the other half from the United States.

Net cash provided by continuing operations was $234 million for the quarter, compared with $184 million in the year-ago quarter. The year-over-year increase of $50 million was due to favorable changes in working capital, primarily related to a lower incentive compensation payment in the current quarter, as well as the timing of tax payments.

Key Segment Results

Following is a summary of key first-quarter results from continuing operations by reportable segment. All comparisons are with the first quarter of fiscal 2014, unless otherwise stated.

Cleaning
(Laundry, Home Care, Professional Products)

1% volume decrease2% sales decrease5% pretax earnings decrease

Lower volume in the segment reflected reduced shipments of Home Care and Laundry products. In Home Care, the decrease in volume was primarily due to a distribution loss of Clorox® disinfecting wipes at a major club customer earlier this calendar year. Wipes continued to perform strongly with many other customers. These results were partially offset by higher shipments of Clorox® toilet bowl cleaner due to strong merchandising activities. In Laundry, Clorox® bleach lost volume compared to 11 percent volume growth in the year-ago quarter due to the earlier introduction of its concentrated formula. Both the Laundry and Home Care businesses saw solid market share increases. The variance between net sales and volume was primarily due to higher trade promotion spending, primarily on Clorox® disinfecting wipes. Pretax earnings results primarily reflected lower sales, incremental demand-building investments, and higher costs for commodities and manufacturing and logistics. These factors were partially offset by the benefit of cost savings.

Household
(Bags and Wraps, Charcoal, Cat Litter)

4% volume growth5% sales growthFlat pretax earnings

Segment volume growth was driven primarily by higher shipments of Kingsford® charcoal due to strong customer promotions and consumption related to the U.S. Labor Day holiday. Also contributing to volume growth were gains in Bags and Wraps due to incremental merchandising and distribution gains on OdorShield® trash bags. These results were partially offset by lower shipments of Glad® base trash bags due to a shift to premium trash bags. The variance between volume and sales results was due primarily to the benefit of price increases. Pretax earnings results reflected the benefit of higher sales, price increases and cost savings, offset by incremental demand-building investments, and higher costs for manufacturing and logistics and commodities.

Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care)

Flat volume1% sales decrease6% pretax earnings growth

Volume results in the segment were driven primarily by strong gains in Natural Personal Care, largely due to innovation in Burt's Bees® lip- and face-care products, offset by lower shipments of Hidden Valley® salad dressings and Brita® products. Pretax earnings growth reflected lower selling and administrative expenses related to investments in the year-ago quarter in systems and processes to support the long-term growth of the Burt's Bees business, as well as lower commodity costs, partially offset by higher costs for manufacturing and logistics.

International
(All countries outside of the U.S.)

5% volume growthFlat sales (10% growth on currency-neutral basis)16% pretax earnings decrease ($5 million decrease)

The segment's volume growth reflected gains primarily in Latin America, Europe and Asia. Segment sales reflected the impact of unfavorable foreign currency exchange rates, primarily in Argentina, related to a significant currency devaluation earlier in the calendar year. While segment sales were flat, on a currency-neutral basis, segment sales grew about 10 percent. The variance between volume and sales was primarily due to the impact of unfavorable foreign currency exchange rates, partially offset by the benefit of price increases. Pretax earnings decreased due to the impact of increased manufacturing and logistics costs, unfavorable foreign currencies and higher selling and administrative expenses. These factors were partially offset by the benefit of higher volume, price increases and cost savings.

Discontinued Operations in Venezuela

As previously announced, Clorox Venezuela discontinued operations effective Sept. 22, 2014, as a result of pricing and other operating restrictions imposed by the Venezuelan government and related conditions that caused Clorox Venezuela to no longer be financially viable. Operating results, and the impact of exit and other costs related to the termination of the business, are included in discontinued operations in the company's financial statements.

In the first quarter, losses from discontinued operations net of income taxes were $55 million, or 42 cents diluted EPS, including net operating losses through Sept. 22, 2014, and the impact of exit and other costs related to the termination of the business. Net operating losses for the first quarter, excluding the impact of exit and other costs associated with exiting Venezuela, were $6 million. In addition, the company recorded pre-tax charges for the write-down or impairment of assets of $37 million, recognition of deferred foreign currency translation losses of $30 million, and labor and other exit costs of $6 million. These charges were offset by income tax benefits of $24 million.

The Company expects to recognize in discontinued operations $60 million to $65 million in after-tax exit costs and other related expenses during fiscal year 2015. The Company also expects to recognize in discontinued operations approximately $10 million to $15 million in additional after-tax costs in fiscal years 2016 through 2018. Net of anticipated tax benefits, total exit costs and other termination related expenses are expected to be approximately $70 million to $80 million. Cash-related exit costs, net of expected tax benefits, are expected to be $5 million to $10 million.

Before exiting Venezuela, the company had anticipated only a modest loss from Clorox Venezuela in fiscal year 2015, as anticipated price increases were expected to reduce the current year loss versus the prior year loss of $23 million. These expectations were based on the Venezuelan government's representations that significant price increases would be forthcoming much earlier in the year; however, the price increases ultimately approved were insufficient and would have caused Clorox Venezuela to continue operating at a significant loss. Nonetheless, based on the company's earlier expectations, reflecting financial results from Clorox Venezuela as discontinued operations does not have a material impact on the company's outlook for diluted EPS from continuing operations.

Clorox Updates EBIT Margin Outlook for Fiscal Year 2015

Sales about flat, or 1% to 3% increase on currency-neutral basis (unchanged)EBIT margin about flat (previously 25 basis points to 50 basis points expansion)$4.35 to $4.50 diluted EPS range (unchanged)

The company continues to anticipate fiscal year 2015 sales to be about flat, with the benefits of innovation and price increases offset by continuing category softness and the impact of foreign currency declines across most international markets, particularly in Argentina. On a currency-neutral basis, the company continues to anticipate sales growth in the range of 1 percent to 3 percent for the fiscal year.

Clorox now anticipates EBIT margin to be about flat for the fiscal year, versus the previous outlook of 25 basis points to 50 basis points expansion, due to the results from Clorox Venezuela being included in discontinued operations, and moderately higher commodity costs. Excluding Clorox Venezuela fiscal year 2014 EBIT margin increased by 60 basis points to 17.8 percent from 17.2 percent previously reported for that period.

Clorox now anticipates its effective fiscal year 2015 tax rate to be closer to 34 percent than the previous outlook in the range of 34 percent to 35 percent.

Net of all these factors, Clorox continues to anticipate fiscal 2015 diluted EPS from continuing operations in the range of $4.35 to $4.50.

For More Detailed Financial Information

Visit the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:

Supplemental unaudited condensed volume and sales growth information

Supplemental unaudited condensed gross margin driver information

Supplemental unaudited reconciliation of certain non-GAAP financial information, including earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)

Supplemental balance sheet and cash flow information and free cash flow reconciliation (unaudited)

Supplemental price-change information

Schedule of unaudited quarterly and fiscal year 2014 condensed consolidated data

Supplemental unaudited quarterly results from continuing operations by reportable segments for fiscal year 2014 (Adjusted to reflect Clorox Venezuela results reclassified to discontinued operations)

Supplemental unaudited condensed fiscal year to date free cash flow information

Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.

The Clorox Company

The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with about 7,700 employees worldwide and fiscal year 2014 sales of $5.5 billion. Clorox markets some of the most trusted and recognized consumer brand names, including its namesake bleach and cleaning products; Pine-Sol® cleaners; Liquid Plumr® clog removers; Poett® home care products; Fresh Step® cat litter; Glad® bags, wraps and containers; Kingsford®charcoal; Hidden Valley® and KC Masterpiece® dressings and sauces; Brita® water-filtration products and Burt's Bees® natural personal care products. The company also markets brands for professional services, including Clorox Healthcare®, HealthLink®, Aplicare® and Dispatch®infection control products for the healthcare industry. More than 80 percent of the company's brands hold the No. 1 or No. 2 market share positions in their categories. Clorox's commitment to corporate responsibility includes making a positive difference in its communities. In fiscal year 2014, The Clorox Company and The Clorox Company Foundation contributed more than $16 million in combined cash grants, product donations, cause marketing and employee volunteerism. For more information, visit TheCloroxCompany.com.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such forward-looking statements involve risks and uncertainties. Except for historical information, matters discussed above, including statements about future volume, sales, costs, cost savings, earnings, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed above. Important factors that could affect performance and cause results to differ materially from management's expectations are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Annual Report on Form 10-K for the fiscal year ended June 30, 2014, as updated from time to time in the company's SEC filings. These factors include, but are not limited to: risks related to international operations, including political instability, particularly in Venezuela; government-imposed price controls or other regulations; foreign currency exchange rate controls, including periodic changes in such controls, fluctuations and devaluations; labor unrest and inflationary pressures, particularly in Argentina and other challenging markets; risks related to nationalization, further expropriation of assets, and other government action in Venezuela, and the possibility of similar actions in other foreign jurisdictions, including Argentina; intense competition in the company's markets; expectations or plans related to the announced changes in the company's leadership; worldwide, regional and local economic conditions and financial market volatility; volatility and increases in commodity costs such as resin, sodium hypochlorite and agricultural commodities and increases in energy, transportation or other costs; the ability of the company to drive sales growth, increase price and market share, grow its product categories and achieve favorable product and geographic mix; dependence on key customers and risks related to customer consolidation and ordering patterns; costs resulting from government regulations; the ability of the company to successfully manage global political, legal, tax and regulatory risks, including changes in regulatory or administrative activity; supply disruptions and other risks inherent in reliance on a limited base of suppliers; the ability of the company to implement and generate anticipated cost savings and efficiencies; the success of the company's business strategies; the impact of product liability claims, labor claims and other legal proceedings, including in foreign jurisdictions and the company's litigation related to its discontinued operations in Brazil; the ability of the company to develop and introduce commercially successful products; risks relating to acquisitions, new ventures and divestitures and associated costs, including the potential for asset impairment charges, including intangible assets and goodwill; risks related to reliance on information technology systems, including potential security breaches, cyber attacks or privacy breaches that result in the unauthorized disclosure of consumer, customer, employee or company information, or service interruptions; the company's ability to attract and retain key personnel; the company's ability to maintain its business reputation and the reputation of its brands; environmental matters including costs associated with the remediation of past contamination and the handling and/or transportation of hazardous substances; the impact of natural disasters, terrorism and other events beyond the company's control; the company's ability to maximize, assert and defend its intellectual property rights; any infringement or claimed infringement by the company of third-party intellectual property rights; the effect of the company's indebtedness and credit rating on its operations and financial results; the company's ability to maintain an effective system of internal controls; uncertainties relating to tax positions, tax disputes and changes in the company's tax rate; the accuracy of the company's estimates and assumptions on which its financial statement projections are based; the company's ability to pay and declare dividends or repurchase its stock in the future; and the impacts of potential stockholder activism.

The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.

Non-GAAP Financial Information

This press release contains non-GAAP financial information relating to sales growth, diluted EPS, the debt to EBITDA ratio and EBIT margin. 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.

The company disclosed these non-GAAP financial measures to supplement its consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including income taxes, interest income, interest expense and foreign exchange impact. The exclusion of foreign exchange impact is also referred to as currency-neutral. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company's operations and are 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 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.

For recent presentations made by company management and other investor materials, visit Investor Events on the company's website.

Condensed Consolidated Statements of Earnings (Unaudited)
Dollars in millions, except per share amounts
Three Months Ended
9/30/2014 9/30/2013
Net sales $ 1,352 $ 1,343
Cost of products sold 774 759
Gross profit 578 584
Selling and administrative expenses 180 194
Advertising costs 121 120
Research and development costs 30 31
Interest expense 26 26
Other expense, net 3 2
Earnings from continuing operations before income taxes 218 211
Income taxes on continuing operations 73 72
Earnings from continuing operations 145 139
Losses from discontinued operations, net of tax (55 ) (3 )
Net earnings $ 90 $ 136
Net earnings (losses) per share
Basic
Continuing operations $ 1.12 $ 1.07
Discontinued operations (0.42 ) (0.03 )
Basic net earnings per share $ 0.70 $ 1.04
Diluted
Continuing operations $ 1.10 $ 1.05
Discontinued operations (0.42 ) (0.02 )
Diluted net earnings per share $ 0.68 $ 1.03
Weighted average shares outstanding (in thousands)
Basic 129,312 130,074
Diluted 131,369 132,237
Reportable Segment Information
(Unaudited)
Dollars in millions
First Quarter Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Three Months Ended Three Months Ended
9/30/14 9/30/13 (2) % Change(1) 9/30/14 9/30/13 (2) % Change(1)
Cleaning Segment $ 470 $ 479 -2% $ 124 $ 131 -5%
Household Segment 392 372 5% 52 52 0%
Lifestyle Segment 216 218 -1% 56 53 6%
International Segment 274 274 0% 26 31 -16%
Corporate - - - (40) (56) -29%
Total Company $ 1,352 $ 1,343 1% $ 218 $ 211 3%
(1) Percentages based on rounded numbers.
(2) As a result of Clorox Venezuela results being included in discontinued operations in the current fiscal quarter, the prior comparative period has been reclassified to conform with current quarter presentation.
Condensed Consolidated Balance Sheets
Dollars in millions
9/30/2014 6/30/2014 9/30/2013
(Unaudited) (Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 355 $ 329 $ 323
Receivables, net 455 546 506
Inventories, net 397 386 439
Other current assets 144 134 152
Total current assets 1,351 1,395 1,420
Property, plant and equipment, net 947 977 1,007
Goodwill 1,087 1,101 1,108
Trademarks, net 539 547 553
Other intangible assets, net 60 64 70
Other assets 166 174 143
Total assets $ 4,150 $ 4,258 $ 4,301
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 53 $ 143 $ 286
Current maturities of long-term debt 575 575 -
Accounts payable 385 440 374
Accrued liabilities 478 472 468
Income taxes payable 42 8 42
Total current liabilities 1,533 1,638 1,170
Long-term debt 1,596 1,595 2,170
Other liabilities 762 768 762
Deferred income taxes 90 103 118
Total liabilities 3,981 4,104 4,220
Stockholders' equity
Common stock 159 159 159
Additional paid-in capital 702 709 673
Retained earnings 1,731 1,739 1,603
Treasury shares (2,007 ) (2,036 ) (1,986 )
Accumulated other comprehensive net losses (416 ) (417 ) (368 )
Stockholders' equity 169 154 81
Total liabilities and stockholders' equity $ 4,150 $ 4,258 $ 4,301
The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.

The reconciliations below are on a continuing operations basis

First-Quarter Sales Growth Reconciliation

Q1 Fiscal 2015 Q1 Fiscal 2014
Total Sales Growth - GAAP 0.6% 2.2%
Less: Foreign exchange -1.9 -1.5
Currency Neutral Sales Growth -Non-GAAP 2.5% 3.7%
The reconciliations below for fiscal year 2014 are provided as a reference point for the fiscal year 2015 outlook, and reflect the reclassification of Clorox Venezuela to discontinued operations in Q1FY15.

Fiscal Year EBIT Margin(1) Reconciliation

FY
Fiscal
2014
(as adjusted for discontinued operations) FY
Fiscal
2014
(as previously reported)
Earnings from continuing operations before income taxes - GAAP $ 884 $ 861
Interest Income -3 -3
Interest Expense 103 103
EBIT(1)- non-GAAP $ 984 $ 961
Net Sales $ 5,514 $ 5,591
EBIT margin(1)- non-GAAP 17.8 % 17.2 %
(1) EBIT represents earnings from continuing operations before interest and taxes. EBIT margin is the ratio of EBIT to net sales.
For Gross Margin Drivers, please refer to the Supplemental Information: Gross Margin Driver page in the Financial Results section of the company's website TheCloroxCompany.com.
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The Clorox Company Reports Solid Q4 and Fiscal Year 2013 Earnings Growth; Confirms Outlook for Fiscal 2014
MarketwiredPress Release: The Clorox Company – Thu, Aug 1, 2013 OAKLAND, CA--(Marketwired - Aug 1, 2013) - The Clorox Company (NYSE: CLX) today reported results for its fourth quarter and fiscal year 2013, which ended June 30. For the full fiscal year, the company delivered 3 percent sales growth, 80 basis points of gross margin expansion and $4.31 diluted earnings per share (EPS) from continuing operations. For the fourth quarter, the company reported a slight increase in sales, gross margin expansion of 130 basis points and $1.38 diluted EPS from continuing operations.

"Clorox people around the world delivered solid results this fiscal year," said Chairman and CEO Don Knauss. "We grew sales in all four segments behind product innovation across multiple brands and delivered strong gross margin expansion."

Commenting on the company's fourth-quarter results, Knauss said, "In Q4 we delivered strong margin expansion and diluted EPS growth from continuing operations of 5 percent. Excluding the impact of foreign currencies, sales grew nearly 1.5 percent in the quarter. While sales results came in slightly lower than anticipated, I feel good about our plans to address the competitive pressures we're facing, including increased merchandising activity as well as product innovation scheduled to launch in fiscal year 2014."

All results in this press release are on a continuing operations basis unless otherwise indicated. Some information in this release is reported on a non-GAAP basis. See "Non-GAAP Financial Information" below and the tables toward the end of this press release for more information and a reconciliation of key fourth-quarter results.

Fiscal Fourth-Quarter Results
Following is a summary of key fourth-quarter results. All comparisons are with the fourth quarter of fiscal year 2012, unless otherwise stated.
•$1.38 diluted earnings per share (5% increase)
•3% volume decrease
•Slight increase in sales

Clorox reported fourth-quarter earnings of $184 million, or $1.38 diluted EPS. This compares with $174 million, or $1.32 diluted EPS, in the year-ago quarter, an increase of 5 percent diluted EPS. Current-quarter results reflect the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs, including the impact of inflationary pressures, and unfavorable foreign currency exchange rates.

Volume for the fourth quarter decreased 3 percent, primarily driven by declines in the company's Home Care, Charcoal and International businesses. Sales were up slightly, reflecting the benefit of price increases, favorable product mix and lower trade spending, largely offset by lower volume and unfavorable foreign currency exchange rates. Excluding the impact of foreign currency declines, sales grew nearly 1.5 percent.

Gross margin increased 130 basis points to 44 percent, compared to 42.7 percent in the year-ago quarter. The increase in gross margin was driven primarily by the benefit of strong cost savings and price increases, partially offset by higher manufacturing and logistics costs.

Advertising spending for the quarter was 8.4 percent of sales, a modest increase versus the year-ago period. The rate of advertising spending for Clorox's U.S. retail business was above 9 percent of sales, but lower for the company's International business in response to continued economic challenges and price controls in Venezuela and Argentina.

EBIT margin increased 60 basis points, driven primarily by gross margin expansion, partially offset by slightly higher advertising and sales promotion and other expenses.

Key Segment Results
Following is a summary of key fourth-quarter results by reportable segment. All comparisons are with the fourth quarter of fiscal 2012, unless otherwise stated.

Cleaning
(Laundry, Home Care, Professional Products)
•4% volume decrease
•1% sales decrease
•7% pretax earnings increase

Volume declines for the segment were driven primarily by lower shipments of Clorox® disinfecting wipes due to increased competitive activity and the resulting decrease in merchandising support. Laundry volume was flat reflecting increased shipments of Clorox® bleach, driven by strong category growth following last year's conversion to a new, concentrated formula, offset by lower shipments of Clorox 2® due to declines in market share. The Professional Products business continued to deliver strong volume growth primarily driven by record shipments of cleaning products. The variance between volume and sales reflects the benefits of favorable product mix and price increases implemented earlier this fiscal year behind innovation in spray cleaners. Pretax earnings growth reflected significant gross margin improvement, supported by cost savings stemming from the company's conversion to concentrated bleach.

Household
(Bags and Wraps, Charcoal, Cat Litter)
•1% volume decrease
•2% sales increase
•6% pretax earnings increase

The segment's volume decrease was driven primarily by declines in Charcoal, due to continued cold weather in the early part of the quarter, with significantly improving trends in June from better weather and Kingsford market share gains. Cat Litter volume grew behind new products and increased merchandising support. Glad volume was also up, largely due to continued strong growth and innovation in premium trash bags. The variance between volume and sales was due to the impact of earlier price increases on cat litter and charcoal products. Pretax earnings increased driven primarily by higher sales and the benefit of strong cost savings resulting in gross margin expansion.

Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal Care)
•Flat volume
•2% sales increase
•5% pretax earnings decrease

Volume in the segment was flat. Food business volume was up, driven primarily by Hidden Valley base business growth and higher shipments of new Hidden Valley® pasta salad kits. Volume declined in Water Filtration primarily due to increased competitive activity, earlier price increases and a comparison to strong volume in the year-ago quarter behind the pipeline build of Brita Bottle®. Burt's Bees volume was flat due to a comparison to double-digit growth in the year-ago quarter behind the pipeline build of güd® products. Retail consumption for Burt's Bees® products was up double-digits in the quarter. Segment sales outpaced volume primarily driven by the benefit of prior-year price increases on Brita® products. Pretax earnings declined primarily due to investments in systems and processes to support long-term growth for the Burt's Bees business.

International
(All countries outside of the U.S.)
•6% volume decrease
•1% sales decrease
•8% pretax earnings decrease

Volume decreased primarily due to the exit from nonstrategic export businesses, and declines in Canada and Argentina. Segment sales decreased due to lower volume and declines in foreign currencies, partially offset by the benefit of favorable mix and price increases. Pretax earnings decreased primarily due to higher manufacturing and logistics costs, including inflationary pressures, and lower sales. These factors were partially offset by the benefit of cost savings.

Fiscal Year 2013 Results
Following is a summary of key fiscal year 2013 results.
•$4.31 diluted EPS (5% increase)
•Flat volume
•3% sales increase

For fiscal year 2013, Clorox reported earnings of $574 million, or $4.31 diluted EPS, versus $543 million, or $4.10 diluted EPS in fiscal year 2012, an increase of 5 percent. Fiscal year results were primarily driven by the benefit of price increases and strong cost savings, partially offset by higher manufacturing and logistics costs, other supply chain costs and unfavorable foreign currency exchange rates.

Volume for fiscal year 2013 was flat versus the year-ago period, reflecting gains in the Professional Products, Food, Burt's Bees and Homecare businesses, offset by declines in the Charcoal, International and Brita businesses. Sales grew 3 percent with gains in all four segments, reflecting strong product innovation and the benefit of price increases, partially offset by unfavorable foreign currency exchange rates.

Gross margin increased 80 basis points to 42.9 percent from 42.1 percent in fiscal year 2012. The year-over-year increase was driven primarily by the benefit of cost savings and price increases, partially offset by higher manufacturing and logistics costs.

EBIT margin increased 60 basis points, primarily driven by gross margin expansion and lower selling and administrative expenses as a percentage of sales, partially offset by foreign currency declines.

Net cash provided by continuing operations increased to $777 million from $620 million in fiscal year 2012. The increase was due primarily to favorable changes in working capital, the prior period settlement of interest-rate forward contracts and higher earnings.

Clorox continues to use its strong cash flow to invest in the business, maintain debt leverage within its target range and return excess cash to shareholders through dividends and share repurchases. In the fourth quarter, the company increased its dividend by 11 percent and repurchased about 1.5 million shares of its common stock at a cost of approximately $128 million.

In addition to repurchasing company stock, Clorox reduced its debt to EBITDA ratio to 2.1 at the end of fiscal year 2013, near the lower end of its target range of 2.0 to 2.5.

Clorox Confirms Fiscal Year 2014 Financial Outlook
•2-4% sales growth
•EBIT margin up 25-50 basis points
•Diluted EPS in the range of $4.55-$4.70

Clorox continues to anticipate sales growth for fiscal 2014 in the range of 2 percent to 4 percent, with the first half of the fiscal year at the lower end or potentially below that range. Moderating factors include a challenging comparison to about 5.5 percent sales growth in the first half of fiscal 2013; the near-term effects of unfavorable foreign currencies; and heightened competitive pressure on laundry additives and disinfecting wipes. In addition, the company continues to anticipate a negative impact of 1 percentage point from foreign currency declines in Argentina and other countries. This outlook also reflects about 3 percentage points of incremental sales growth from product innovation.

Clorox continues to anticipate EBIT margin to increase in the range of 25-50 basis points, reflecting cost savings of about 150 basis points and lower selling and administrative expenses as a percentage of sales. We anticipate these benefits to be moderated by about 100 basis points of higher commodity costs and high inflation in some international markets.

The company's outlook continues to reflect an impact of about 5-10 cents diluted EPS related to continued market challenges in Argentina and Venezuela, including the effect of high inflation on manufacturing and logistics costs and price controls, as well as the currency devaluation in Venezuela that took place in February of this year. This outlook does not include a contingency for any additional currency devaluation in Venezuela.

Clorox continues to anticipate a higher effective tax rate of 34 to 35 percent for fiscal 2014.

Net of all these factors, Clorox continues to anticipate fiscal 2014 diluted EPS from continuing operations in the range of $4.55 to $4.70.

The recent rise of the U.S. dollar and volatility in some commodity prices are pressuring Clorox's sales and margins in the near term. If these factors remain elevated, the company's full-year results will be negatively affected. Our current outlook assumes about a percentage point of impact from foreign currency declines and another percentage point from commodity cost increases, with oil prices in the range of $90 to $100 per barrel.

For More Detailed Financial Information

Visit the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com for the following:
•Supplemental volume and sales growth information
•Supplemental gross margin driver information
•Reconciliation of certain non-GAAP financial information, including earnings from continuing operations before interest and taxes (EBIT) and earnings from continuing operations before interest, taxes, depreciation and amortization (EBITDA)
•Reconciliation of economic profit (EP)
•Supplemental balance sheet and cash flow information and free cash flow reconciliation
•Supplemental price-change information
•Calculation of return on invested capital (ROIC)

Note: Percentage and basis-point changes noted in this press release are calculated based on rounded numbers. Supplemental materials are available in the Investors: Financial Reporting: Financial Results section of the company's website at TheCloroxCompany.com.

The Clorox Company
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 8,400 employees and fiscal year 2013 revenues of $5.6 billion. Clorox markets some of the most trusted and recognized brand names, including its namesake bleach and cleaning products, Clorox Healthcare™, HealthLink®, Aplicare® and Dispatch® products, Green Works® naturally derived products, Pine-Sol® cleaners, Poett® home care products, Fresh Step® cat litter, Glad® bags, wraps and containers, Kingsford® charcoal, Hidden Valley® and KC Masterpiece® dressings and sauces, Brita® water-filtration products, and Burt's Bees® and gud® natural personal care products. Nearly 90 percent of the company's brands hold the No. 1 or No. 2 market share positions in their categories. Clorox's commitment to corporate responsibility includes making a positive difference in its communities. In fiscal year 2013, The Clorox Company Foundation awarded $4.1 million in cash grants, and Clorox made product donations valued at nearly $10 million. For more information, visit TheCloroxCompany.com.

Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and such forward-looking statements involve risks and uncertainties. Except for historical information, matters discussed above, including statements about future volume, sales, costs, cost savings, earnings, cash flows, plans, objectives, expectations, growth, or profitability, are forward-looking statements based on management's estimates, assumptions and projections. Words such as "will," "could," "may," "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," and variations on such words, and similar expressions, are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed above. Important factors that could affect performance and cause results to differ materially from management's expectations are described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Annual Report on Form 10-K for the fiscal year ended June 30, 2012, as updated from time to time in the company's SEC filings. These factors include, but are not limited to: the company's costs, including volatility and increases in commodity costs such as resin, diesel, chlor-alkali, sodium hypochlorite, high-strength bleach, agricultural commodities and other raw materials; increases in energy costs; the ability of the company to implement and generate expected savings from its programs to reduce costs, including its supply chain restructuring and other restructuring plans; supply disruptions or any future supply constraints that may affect key commodities or product inputs; risks inherent in relationships with suppliers, including sole-source or single-source suppliers; risks related to the handling and/or transportation of hazardous substances, including, but not limited to, chlorine; the success of the company's strategies; the ability to manage and realize the benefits of joint ventures and other cooperative relationships, including the company's joint venture regarding the company's Glad® plastic bags, wraps and containers business, and the agreements relating to the provision of information technology, procure to pay and other key services by third parties; risks relating to acquisitions, mergers and divestitures, and the costs associated therewith; risks inherent in maintaining an effective system of internal controls, including the potential impact of acquisitions or the use of third-party service providers, and the need to refine controls to adjust for accounting, financial reporting and other organizational changes or business conditions; the ability of the company to successfully manage tax, regulatory, product liability, intellectual property, environmental and other legal matters, including the risk resulting from joint and several liability for environmental contingencies and risks inherent in litigation, including class action litigation and International litigation; risks related to maintaining and updating the company's information systems, including potential disruptions, costs and the ability of the company to implement adequate information systems in order to support the current business and to support the company's potential growth; the ability of the company to develop commercially successful products that delight the consumer; consumer and customer reaction to price changes; actions by competitors; risks related to customer concentration; customer-specific ordering patterns and trends; risks arising out of natural disasters; the impact of disease outbreaks, or pandemics on the company's suppliers' or customers' operations; changes in the company's tax rate; unfavorable worldwide, regional or local general economic and marketplace conditions and events, including consumer confidence and consumer spending levels, the rate of economic growth, the rate of inflation or deflation, and the financial condition of the company's customers, suppliers and service providers; foreign currency exchange rate fluctuations and other risks of international operations, including government-imposed price controls; unfavorable political conditions in the countries where the company does business and other operational risks in such countries; the impact of the volatility of the debt and equity markets on the company's cost of borrowing, cost of capital and access to funds, including commercial paper and its credit facility; risks relating to changes in the company's capital structure, including risks related to the company's ability to implement share repurchase plans and the impact thereof on the company's capital structure and earnings per share; the impact of any unanticipated restructuring or asset-impairment charges and the ability of the company to successfully implement restructuring plans; risks arising from declines in cash flow, whether resulting from declining sales, declining product categories, higher cost levels, tax payments, debt payments, share repurchases, higher capital spending, interest cost increases greater than management's expectations, interest rate fluctuations, increases in debt or changes in credit ratings, or otherwise; the costs and availability of shipping and transport services; potential costs in the event of stockholder activism; and the company's ability to maintain its business reputation and the reputation of its brands.

The company's forward-looking statements in this press release are based on management's current views and assumptions regarding future events and speak only as of their dates. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.

Non-GAAP Financial Information
This press release contains non-GAAP financial information relating to EBIT margin, the debt to EBITDA ratio and sales growth. The company has included reconciliations of non-GAAP financial information related to sales growth, EBIT margin and the debt to EBITDA ratio to the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the U.S. (GAAP). See the end of this press release for these reconciliations.

The company has disclosed information related to these non-GAAP financial measures to supplement its condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures exclude certain items that are included in the company's results reported in accordance with GAAP, including interest income, interest expense, depreciation and amortization, the impact of foreign currency exchange transactions and acquisitions. Management believes these non-GAAP financial measures provide useful additional information to investors about trends in the company's operations and are 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 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 only be read in connection with the company's condensed consolidated financial statements presented in accordance with GAAP.

For recent presentations made by company management and other investor materials, visit Investor Events.

Condensed Consolidated Statements of Earnings
Dollars in millions, except per share amounts

Three Months Ended Twelve Months Ended
6/30/2013 6/30/2012 6/30/2013 6/30/2012
(Unaudited) (Unaudited) (Unaudited)

Net sales $ 1,547 $ 1,541 $ 5,623 $ 5,468
Cost of products sold 867 883 3,211 3,164
Gross profit 680 658 2,412 2,304

Selling and administrative expenses 212 213 807 798
Advertising costs 130 123 500 482
Research and development costs 35 34 130 121
Interest expense 26 33 122 125
Other expense (income), net 8 4 - (13 )
Earnings from continuing operations before income taxes 269 251 853 791
Income taxes on continuing operations 85 77 279 248
Earnings from continuing operations 184 174 574 543
Losses from discontinued operations, net of tax (1 ) - (2 ) (2 )
Net earnings $ 183 $ 174 $ 572 $ 541

Net earnings (losses) per share
Basic
Continuing operations $ 1.40 $ 1.34 $ 4.38 $ 4.15
Discontinued operations (0.01 ) - (0.01 ) (0.01 )
Basic net earnings per share $ 1.39 $ 1.34 $ 4.37 $ 4.14

Diluted
Continuing operations $ 1.38 $ 1.32 $ 4.31 $ 4.10
Discontinued operations (0.01 ) - (0.01 ) (0.01 )
Diluted net earnings per share $ 1.37 $ 1.32 $ 4.30 $ 4.09

Weighted average shares outstanding (in thousands)
Basic 131,422 130,061 131,075 130,852
Diluted 133,612 131,395 132,969 132,310

Reportable Segment Information
(Unaudited)
Dollars in millions

Fourth Quarter Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Three Months Ended Three Months Ended
6/30/13 6/30/12 % Change (1) 6/30/13 6/30/12 % Change (1)

Cleaning Segment $ 432 $ 436 -1 % $ 101 $ 94 7 %

Household Segment 568 559 2 % 154 145 6 %

Lifestyle Segment 239 235 2 % 62 65 -5 %

International Segment 308 311 -1 % 23 25 -8 %

Corporate - - - (71 ) (78 ) -9 %

Total Company $ 1,547 $ 1,541 0 % $ 269 $ 251 7 %

Year-to-Date Net Sales Earnings (Losses) from Continuing Operations Before Income Taxes
Twelve Months Ended Twelve Months Ended
6/30/13 6/30/12 % Change (1) 6/30/13 6/30/12 % Change (1)

Cleaning Segment $ 1,783 $ 1,692 5 % $ 420 $ 381 10 %

Household Segment 1,693 1,676 1 % 336 298 13 %

Lifestyle Segment 929 901 3 % 259 265 -2 %

International Segment 1,218 1,199 2 % 96 119 -19 %

Corporate - - - (258 ) (272 ) -5 %

Total Company $ 5,623 $ 5,468 3 % $ 853 $ 791 8 %

(1) Percentages based on rounded numbers.

Condensed Consolidated Balance Sheets
Dollars in millions

6/30/2013 6/30/2012
(Unaudited)

ASSETS
Current assets
Cash and cash equivalents $ 299 $ 267
Receivables, net 580 576
Inventories, net 394 384
Other current assets 147 149
Total current assets 1,420 1,376

Property, plant and equipment, net 1,021 1,081
Goodwill 1,105 1,112
Trademarks, net 553 556
Other intangible assets, net 74 86
Other assets 138 144
Total assets $ 4,311 $ 4,355

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Notes and loans payable $ 202 $ 300
Current maturities of long-term debt - 850
Accounts payable 413 412
Accrued liabilities 490 494
Income taxes payable 29 5
Total current liabilities 1,134 2,061
Long-term debt 2,170 1,571
Other liabilities 742 739
Deferred income taxes 119 119
Total liabilities 4,165 4,490

Stockholders' equity (deficit)
Common stock 159 159
Additional paid-in capital 661 633
Retained earnings 1,561 1,350
Treasury shares (1,868 ) (1,881 )
Accumulated other comprehensive net losses (367 ) (396 )
Stockholders' equity (deficit) 146 (135 )
Total liabilities and stockholders' equity (deficit) $ 4,311 $ 4,355

The tables below present the reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures and other supplemental information. See "Non-GAAP Financial Information" above for further information regarding the company's use of non-GAAP financial measures.

Fourth-Quarter Sales Growth Reconciliation

Q4
Fiscal
2013 Q4
Fiscal
2012
Base sales growth - non-GAAP 1.3 % 3.2 %
Foreign exchange -0.9 -0.8
Acquisitions -- 1.6
Total sales growth - GAAP 0.4 % 4.0 %

Fiscal Year Sales Growth Reconciliation

Fiscal
2013 Fiscal
2012
Base sales growth - non-GAAP 2.7 % 3.8 %
Foreign exchange -0.6 -0.2
Acquisitions 0.7 0.9
Total sales growth - GAAP 2.8 % 4.5 %

Fourth-Quarter EBIT(1) Margin Reconciliation

Q4
Fiscal
2013 Q4
Fiscal
2012

Earnings from continuing operations before income taxes - GAAP $ 269 $ 251

Interest Income -1 -1
Interest Expense 26 33

EBIT (1)- non-GAAP $ 294 $ 283

EBIT margin(2) - non-GAAP 19.0 % 18.4 %
Net Sales $ 1,547 $ 1,541

Fiscal Year EBIT(1) Margin Reconciliation

Fiscal
2013 Fiscal
2012

Earnings from continuing operations before income taxes - GAAP $ 853 $ 791

Interest Income -3 -3
Interest Expense 122 125

EBIT (1) - non-GAAP $ 972 $ 913

EBIT margin(2) - non-GAAP 17.3 % 16.7 %
Net Sales $ 5,623 $ 5,468

Depreciation and Amortization $ 182 $ 178
EBITDA(3)- non-GAAP $ 1,154 $ 1,091

Debt to EBITDA(4) 2.1 2.5
Total Debt(5) $ 2,372 $ 2,721

(1) EBIT represents Earnings from Continuing Operations Before Interest and Taxes
(2) EBIT margin is a measure of EBIT as a percentage of net sales.
(3) EBITDA represents Earnings from Continuing Operations Before Interest, Taxes and Depreciation and Amortization.
(4) Debt to EBITDA represents total debt divided by EBITDA.
Note: The Company calculates EBITDA for compliance with its debt covenants using earnings from continuing operations for the trailing four quarters, as contractually defined.
(5) Total debt represents the sum of notes and loans payable, current maturities of long-term debt, and long-term debt.

For Gross Margin Drivers, please refer to the Supplemental Information: Gross Margin Driver page in the Financial Results section of the company's website TheCloroxCompany.com.

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