Clorox Co 10-Q for FY2021 Q3

Clorox Co (CLX)

10-Q 2021-04-30 For: 2021-03-31

Added on April 09, 2026

About this 10-Q

Clorox Co filed this 10-Q on April 30, 2021, covering the quarter ended March 31, 2021 (FY2021 Q3).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.78B; down 0.1% from $1.78B a year earlier
Net loss: $61M; compared with net income of $241M a year earlier
Diluted EPS: -$0.49; compared with $1.89 a year earlier

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Delaware			31-0595760
(State or other jurisdiction of			(I.R.S. Employer Identification No.)
incorporation or organization)


(Former name, former address and former fiscal year, if changed since last report)
___________________
Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock - $1.00 par value	CLX	New York Stock Exchange


	Three Months Ended				Nine Months Ended
	3/31/2021		3/31/2020		3/31/2021		3/31/2020
Net sales	$	1,781	$	1,783	$	5,539	$	4,738
Cost of products sold		1,007		951		3,008		2,604
Gross profit		774		832		2,531		2,134
Selling and administrative expenses		237		269		744		690
Advertising costs		200		184		566		461
Research and development costs		32		39		104		103
Goodwill, trademark and other asset impairments		329		—		329		—
Interest expense		25		24		74		74
Other (income) expense, net		10		19		(85)		16
Earnings (losses) before income taxes		(59)		297		799		790
Income taxes		—		56		180		161
Net earnings (losses)		(59)		241		619		629
Less: Net earnings attributable to noncontrolling interests		2		—		6		—
Net earnings (losses) attributable to Clorox	$	(61)	$	241	$	613	$	629
Net earnings (losses) per share attributable to Clorox
Basic net earnings (losses) per share	$	(0.49)	$	1.92	$	4.86	$	5.01
Diluted net earnings (losses) per share	$	(0.49)	$	1.89	$	4.78	$	4.94
Weighted average shares outstanding (in thousands)
Basic		125,610		125,661		126,057		125,641
Diluted		125,610		127,328		128,030		127,236

Comprehensive income (loss)	$	(37)	$	186	$	706	$	575
Less: Total comprehensive income attributable to noncontrolling interests		2		—		6		—
Total comprehensive income (loss) attributable to Clorox	$	(39)	$	186	$	700	$	575


	3/31/2021		6/30/2020
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	492	$	871
Receivables, net		643		648
Inventories, net		688		454
Prepaid expenses and other current assets		139		47
Total current assets		1,962		2,020
Property, plant and equipment, net of accumulated depreciation and amortization of $2,351 and $2,224, respectively		1,251		1,103
Operating lease right-of-use assets		328		291
Goodwill		1,574		1,577
Trademarks, net		694		785
Other intangible assets, net		246		109
Other assets		386		328
Total assets	$	6,441	$	6,213
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities

Current maturities of long-term debt	$	300	$	—
Current operating lease liabilities		74		64
Accounts payable and accrued liabilities		1,445		1,329
Income taxes payable		—		25
Total current liabilities		1,819		1,418
Long-term debt		2,483		2,780
Long-term operating lease liabilities		305		278
Other liabilities		819		767
Deferred income taxes		77		62
Total liabilities		5,503		5,305
Commitments and contingencies
Stockholders’ equity
Preferred stock: $1.00 par value; 5,000,000 shares authorized; none issued or outstanding		—		—
Common stock: $1.00 par value; 750,000,000 shares authorized; 130,741,461 and 158,741,461 shares issued as of March 31, 2021 and June 30, 2020, respectively; and 124,359,712 and 126,198,606 shares outstanding as of March 31, 2021 and June 30, 2020, respectively		131		159
Additional paid-in capital		1,190		1,137
Retained earnings		1,086		3,567
Treasury stock, at cost: 6,381,749 and 32,542,855 shares as of March 31, 2021 and June 30, 2020, respectively		(1,111)		(3,315)
Accumulated other comprehensive net (loss) income		(553)		(640)
Total Clorox stockholders’ equity		743		908
Noncontrolling interests		195		—
Total stockholders’ equity		938		908
Total liabilities and stockholders’ equity	$	6,441	$	6,213


	Nine Months Ended
	3/31/2021		3/31/2020
Operating activities:
Net earnings	$	619	$	629
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation and amortization		157		133
Stock-based compensation		52		37
Deferred income taxes		(21)		5
Goodwill, trademark and other asset impairments		329		—
Other		(53)		26
Changes in:
Receivables, net		46		(102)
Inventories, net		(220)		50
Prepaid expenses and other current assets		(29)		(6)
Accounts payable and accrued liabilities		94		53
Operating lease right-of-use assets and liabilities, net		(1)		7
Income taxes payable / prepaid		(80)		(26)
Net cash provided by operations		893		806
Investing activities:
Capital expenditures		(232)		(158)
Businesses acquired, net of cash acquired		(85)		—
Other		(24)		13
Net cash used for investing activities		(341)		(145)
Financing activities:
Notes and loans payable, net		—		234
Treasury stock purchased		(605)		(225)
Cash dividends paid to Clorox stockholders		(420)		(399)
Cash dividends paid to noncontrolling interests		(18)		—
Issuance of common stock for employee stock plans and other		99		129
Net cash used for financing activities		(944)		(261)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash		10		(8)
Net increase (decrease) in cash, cash equivalents, and restricted cash		(382)		392
Cash, cash equivalents, and restricted cash:
Beginning of period		879		113
End of period	$	497	$	505


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	Joint Venture
Goodwill	$	208
Reacquired rights (included in Other intangible assets, net)	138
Property, plant and equipment	46
Customer relationships (included in Other intangible assets, net)	10
Working capital, net (includes cash acquired of $26)	34
Noncurrent liabilities, net	(5)
Deferred income taxes	(19)
Total fair value of net assets	412
Less: Fair value of noncontrolling interests	(198)
Less: Fair value of previously held equity interest	(103)
Total purchase consideration	$	111


	3/31/2021		6/30/2020
Finished goods	$	522	$	340
Raw materials and packaging	188		140
Work in process	10		7
LIFO allowances	(32)		(33)
Total	$	688	$	454


	Impairment Charge
Goodwill	$	228
Trademarks, net	86
Other intangible assets, net	14
Property, plant and equipment, net	1
Total	$	329


	Goodwill
	Health and Wellness		Household		Lifestyle		International		Total
Balance as of June 30, 2020	$	857	$	85	$	244	$	391	$	1,577
Acquisitions	—		—		—		212		212
Translation adjustments and other	—		—		—		4		4
Balance as of September 30, 2020	857		85		244		607		1,793
Translation adjustments and other (1)	—		—		—		10		10
Balance as of December 31, 2020	857		85		244		617		1,803
Goodwill impairment	(228)		—		—		—		(228)
Translation adjustments and other	—		—		—		(1)		(1)
Balance as of March 31, 2021	$	629	$	85	$	244	$	616	$	1,574


	As of March 31, 2021						As of June 30, 2020
	Gross carrying amount		Accumulated amortization / Impairments		Net carrying amount		Gross carrying amount		Accumulated amortization / Impairments		Net carrying amount
Trademarks not subject to amortization	$	769	$	86	$	683	$	766	$	—	$	766
Trademarks subject to amortization	47		36		11		47		28		19
Other intangible assets	583		337		246		424		315		109
Total	$	1,399	$	459	$	940	$	1,237	$	343	$	894


	Gains (losses) recognized in Other comprehensive (loss) income
	Three Months Ended				Nine Months Ended
	3/31/2021		3/31/2020		3/31/2021		3/31/2020
Commodity purchase derivative contracts	$	5	$	(11)	$	12	$	(8)
Foreign exchange derivative contracts	2		2		(1)		2
Interest rate derivative contracts	26		—		36		—
Total	$	33	$	(9)	$	47	$	(6)


	Location of Gains (losses) reclassified from Accumulated other comprehensive net (loss) income into Net earnings	Gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings
		Three Months Ended				Nine Months Ended
		3/31/2021		3/31/2020		3/31/2021		3/31/2020
Commodity purchase derivative contracts	Cost of products sold	$	—	$	—	$	(2)	$	(1)
Foreign exchange derivative contracts	Cost of products sold	—		—		—		—
Interest rate derivative contracts	Interest expense	(2)		(2)		(5)		(5)
Total		$	(2)	$	(2)	$	(7)	$	(6)


			3/31/2021				6/30/2020
	Balance Sheet Classification	Fair Value Hierarchy Level	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets
Commodity purchase futures contracts	Other current assets	1	$	3	$	3	$	—	$	—
Commodity purchase swaps contracts	Other current assets	2	2		2		—		—
Commodity purchase swaps contracts	Other assets	2	—		—		—		—
Interest rate forward contracts	Other assets	2	37		37		1		1
			$	42	$	42	$	1	$	1
Liabilities
Commodity purchase futures contracts	Accounts payable and accrued liabilities	1	$	—	$	—	$	1	$	1
Commodity purchase swaps contracts	Accounts payable and accrued liabilities	2	—		—		3		3
Foreign exchange forward contract	Accounts payable and accrued liabilities	2	1		1		1		1
			$	1	$	1	$	5	$	5


	Three Months Ended March 31
(Dollars in millions except per share data; shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Net (Loss) Income		Non-controlling interests		Total Stockholders’ Equity
	Amount		Shares					Amount		Shares
Balance as of December 31, 2019	$	159	158,741	$	1,062	$	3,292	$	(3,357)	(33,717)	$	(601)	$	—	$	555
Net earnings	—		—	—		241		—		—	—		—		241
Other comprehensive (loss) income	—		—	—		—		—		—	(55)		—		(55)
Dividends to Clorox stockholders ($1.06 per share declared)	—		—	—		(135)		—		—	—		—		(135)
Stock-based compensation	—		—	18		—		—		—	—		—		18
Other employee stock plan activities	—		—	31		—		70		1,083	—		—		101
Treasury stock purchased	—		—	—		—		(30)		(184)	—		—		(30)
Balance as of March 31, 2020	$	159	158,741	$	1,111	$	3,398	$	(3,317)	(32,818)	$	(656)	$	—	$	695

Balance as of December 31, 2020	$	131	130,741	$	1,176	$	1,302	$	(850)	(5,017)	$	(575)	$	196	$	1,380
Net earnings (losses)	—		—	—		(61)		—		—	—		2		(59)
Other comprehensive (loss) income	—		—	—		—		—		—	22		—		22
Dividends to Clorox stockholders ($1.11 per share declared)	—		—	—		(139)		—		—	—		—		(139)
Dividends to non-controlling interests	—		—	—		—		—		—	—		(3)		(3)
Stock-based compensation	—		—	17		—		—		—	—		—		17
Other employee stock plan activities	—		—	(3)		(16)		44		283	—		—		25
Treasury stock purchased	—		—	—		—		(305)		(1,648)	—		—		(305)

Balance as of March 31, 2021	$	131	130,741	$	1,190	$	1,086	$	(1,111)	(6,382)	$	(553)	$	195	$	938


	Net sales
	Three Months Ended				Nine Months Ended
	3/31/2021		3/31/2020		3/31/2021		3/31/2020
Cleaning	29	%	32	%	30	%	31	%
Professional Products	5	%	6	%	7	%	6	%
Vitamins, Minerals and Supplements	4	%	4	%	4	%	4	%
Health and Wellness	38	%	42	%	41	%	41	%
Bags and Wraps	11	%	11	%	11	%	12	%
Cat Litter	7	%	7	%	7	%	7	%
Grilling	11	%	9	%	8	%	6	%
Household	29	%	27	%	26	%	25	%
Food Products	10	%	8	%	9	%	9	%
Natural Personal Care	3	%	4	%	4	%	5	%
Water Filtration	3	%	4	%	4	%	4	%
Lifestyle	16	%	16	%	17	%	18	%
International	17	%	15	%	16	%	16	%
Total	100	%	100	%	100	%	100	%


	Nine Months Ended March 31
(Dollars in millions except per share data; shares in thousands)	Common Stock			Additional Paid-in Capital		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Net (Loss) Income		Non-controlling interests		Total Stockholders’ Equity
	Amount		Shares					Amount		Shares
Balance as of June 30, 2019	$	159	158,741	$	1,046	$	3,150	$	(3,194)	(33,055)	$	(602)	$	—	$	559
Cumulative effect of accounting changes, net of tax (1)	—		—	—		22		—		—	—		—		22
Net earnings	—		—	—		629		—		—	—		—		629
Other comprehensive (loss) income	—		—	—		—		—		—	(54)		—		(54)
Dividends to Clorox stockholders ($3.18 per share declared)	—		—	—		(402)		—		—	—		—		(402)
Stock-based compensation	—		—	37		—		—		—	—		—		37
Other employee stock plan activities	—		—	28		(1)		96		1,661	—		—		123
Treasury stock purchased	—		—	—		—		(219)		(1,424)	—		—		(219)
Balance as of March 31, 2020	$	159	158,741	$	1,111	$	3,398	$	(3,317)	(32,818)	$	(656)	$	—	$	695

Balance as of June 30, 2020	$	159	158,741	$	1,137	$	3,567	$	(3,315)	(32,543)	$	(640)	$	—	$	908
Net earnings	—		—	—		613		—		—	—		6		619
Other comprehensive (loss) income	—		—	—		—		—		—	87		—		87
Dividends to Clorox stockholders ($3.33 per share declared)	—		—	—		(421)		—		—	—		—		(421)
Dividends to noncontrolling interests	—		—	—		—		—		—	—		(9)		(9)
Business combinations including purchase accounting adjustments	—		—	—		—		—		—	—		198		198
Stock-based compensation	—		—	52		—		—		—	—		—		52
Other employee stock plan activities	—		—	1		(33)		141		1,233	—		—		109
Treasury stock purchased	—		—	—		—		(605)		(3,072)	—		—		(605)
Treasury stock retirement	(28)		(28,000)	—		(2,640)		2,668		28,000	—		—		—
Balance as of March 31, 2021	$	131	130,741	$	1,190	$	1,086	$	(1,111)	(6,382)	$	(553)	$	195	$	938


	Three Months Ended March 31
	Foreign currency translation adjustments		Net unrealized gains (losses) on derivatives		Pension and postretirement benefit adjustments		Accumulated other comprehensive net (loss) income
Balance as of December 31, 2019	$	(421)	$	(17)	$	(163)	$	(601)
Other comprehensive (loss) income before reclassifications	(49)		(9)		—		(58)
Amounts reclassified from Accumulated other comprehensive net (loss) income	—		2		2		4
Income tax benefit (expense)	(2)		2		(1)		(1)
Net current period other comprehensive (loss) income	(51)		(5)		1		(55)
Balance as of March 31, 2020	$	(472)	$	(22)	$	(162)	$	(656)

Balance as of December 31, 2020	$	(403)	$	(3)	$	(169)	$	(575)
Other comprehensive (loss) income before reclassifications	(6)		33		—		27
Amounts reclassified from Accumulated other comprehensive net (loss) income	—		2		3		5
Income tax benefit (expense), and other	(1)		(8)		(1)		(10)
Net current period other comprehensive (loss) income	(7)		27		2		22
Balance as of March 31, 2021	$	(410)	$	24	$	(167)	$	(553)

	Nine Months Ended March 31
	Foreign currency translation adjustments		Net unrealized gains (losses) on derivatives		Pension and postretirement benefit adjustments		Accumulated other comprehensive net (loss) income
Balance as of June 30, 2019	$	(414)	$	(23)	$	(165)	$	(602)
Other comprehensive (loss) income before reclassifications	(55)		(6)		—		(61)
Amounts reclassified from Accumulated other comprehensive net (loss) income	—		6		5		11
Income tax benefit (expense)	(3)		1		(2)		(4)
Net current period other comprehensive (loss) income	(58)		1		3		(54)
Balance as of March 31, 2020	$	(472)	$	(22)	$	(162)	$	(656)

Balance as of June 30, 2020	$	(450)	$	(18)	$	(172)	$	(640)
Other comprehensive (loss) income before reclassifications	38		47		—		85
Amounts reclassified from Accumulated other comprehensive net (loss) income	—		7		7		14
Income tax benefit (expense), and other	2		(12)		(2)		(12)
Net current period other comprehensive (loss) income	40		42		5		87
Balance as of March 31, 2021	$	(410)	$	24	$	(167)	$	(553)


	Three Months Ended March 31, 2021
	Percentage change versus the year-ago period
	Reported (GAAP) Net Sales Growth / (Decrease)		Reported Volume		Acquisitions & Divestitures		Foreign Exchange Impact		Price/Mix/Other (1)		Organic Sales Growth / (Decrease) (Non-GAAP) (2)		Organic Volume (3)
Health and Wellness	(8)	%	(11)	%	—	%	—	%	3	%	(8)	%	(11)	%
Household	6		4		—		—		2		6		4
Lifestyle	—		(1)		—		—		1		—		(1)
International	9		2		7		(2)		7		4		(3)
Total	—	%	(4)	%	1	%	—	%	4	%	(1)	%	(5)	%

	Nine Months Ended March 31, 2021
	Percentage change versus the year-ago period
	Reported (GAAP) Net Sales Growth / (Decrease)		Reported Volume		Acquisitions & Divestitures		Foreign Exchange Impact		Price/Mix/Other (1)		Organic Sales Growth / (Decrease) (Non-GAAP) (2)		Organic Volume (3)
Health and Wellness	19	%	15	%	—	%	—	%	4	%	19	%	15	%
Household	20		14		—		—		6		20		14
Lifestyle	8		8		—		—		—		8		8
International	17		13		8		(4)		7		13		6
Total	17	%	13	%	1	%	—	%	4	%	16	%	12	%


	Three Months Ended
							% of Net Sales
	3/31/2021		3/31/2020		% Change		3/31/2021		3/31/2020
Selling and administrative expenses	$	237	$	269	(12)	%	13.3	%	15.1	%
Advertising costs	200		184		9		11.2		10.3
Research and development costs	32		39		(18)		1.8		2.2

	Nine Months Ended
							% of Net Sales
	3/31/2021		3/31/2020		% Change		3/31/2021		3/31/2020
Selling and administrative expenses	$	744	$	690	8	%	13.4	%	14.6	%
Advertising costs	566		461		23		10.2		9.7
Research and development costs	104		103		1		1.9		2.2


	Twelve Months Ended
	3/31/2021
Net earnings	$	929
Add back:
Interest expense	99
Income tax expense	265
Depreciation and amortization	204
Non-cash asset impairment charges(1)	330
Deduct:
Interest income	(4)
Non-recurring, non-cash gain(2)	(85)
Consolidated EBITDA	$	1,738
Interest expense	$	99
Interest Coverage ratio	17.6


	[a]	[b]		[c]	[d]
Period	Total Number of Shares Purchased (1)	Average Price Paid per Share (2)		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 to 31, 2021	—	$	—	—	$1,493 million
February 1 to 28, 2021	910,000	186.23		910,000	$1,428 million
March 1 to 31, 2021	738,130	183.40		738,130	$1,293 million
Total	1,648,130	$	184.96	1,648,130


10.1						The Clorox Company Annual Incentive Plan, amended and restated as of February 9, 2021.
10.2						The Clorox Company Executive Incentive Compensation Plan, amended and restated as of February 9, 2021.
10.3						The Clorox Company 2005 Stock Incentive Plan, First Amendment and Restatement as of November 14, 2012; Second Amendment and Restatement as of September 22, 2020; Third Amendment and Restatement as of February 9, 2021.
10.4						Form of Nonqualified Stock Option Award Agreement under the Company’s 2005 Stock Incentive Plan.
10.5						Form of Performance Share Award Agreement under the Company’s 2005 Stock Incentive Plan for awards made in 2021.
10.6						Form of Restricted Stock Unit Award Agreement under the Company's 2005 Stock Incentive Plan (Annual Grant).
10.7						Form of Restricted Stock Unit Award Agreement under the Company's 2005 Stock Incentive Plan (Off-Cycle Grant).
10.8						Severance Plan for Clorox Executive Committee Members, third amended and restated effective February 9, 2021.
31.1						Certification by the Chief Executive Officer of the Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2						Certification by the Chief Financial Officer of the Company Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32						Certification by the Chief Executive Officer and Chief Financial Officer of the Company Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.SCH						XBRL Taxonomy Extension Schema Document.
101.CAL						XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF						XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB						XBRL Taxonomy Extension Label Linkbase Document.
101.PRE						XBRL Taxonomy Extension Presentation Linkbase Document.
104						Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101).


		THE CLOROX COMPANY
		(Registrant)


DATE: April 30, 2021	BY	/s/ Jeffrey R. Baker
		Jeffrey R. Baker Vice President – Chief Accounting Officer and Corporate Controller