OAKLAND, Calif., March 16, 2005 - The Clorox Company (NYSE: CLX) (PCX: CLX) today updated its earnings outlook for the balance of its fiscal year, which ends June 30, 2005.
The outlook reported below includes the previously communicated discontinued operations treatment of the company's historical results to reflect the impact of its share exchange with Henkel KGaA. Clorox's third- and fourth-quarter earnings from continuing operations will not be impacted by the exchange of the company's investment in the Henkel Iberica joint venture, and should not be materially affected by transitional services provided to Henkel. As reported on Feb. 7, the company's fiscal-year earnings-per-diluted-share outlook includes the nonrecurring earnings, royalties and gain from the exchange of the Henkel Iberica joint venture investment of 14 cents, including the reversal of deferred taxes.
The company's revised outlook reflects updates in the timing of certain tax-related items in the third and fourth quarters. As a result, Clorox anticipates a third-quarter effective tax rate of 32-33 percent, increasing diluted EPS by 2 cents, and a fourth-quarter effective tax rate of 36-37 percent, decreasing diluted EPS by 2 cents. For the full fiscal year, the company continues to anticipate an effective tax rate on continuing operations of about 34 percent.
For the third quarter, Clorox continues to anticipate sales growth in the range of 3-5 percent. In accordance with generally accepted accounting principles in the United States (GAAP), the company now anticipates earnings per diluted share from continuing operations and fully diluted earnings per share in the range of 65-71 cents. In addition to the aforementioned 2-cent accretive tax effect, the updated diluted EPS estimate for the third quarter reflects increased shipments in nearly every business.
For the fourth quarter, Clorox anticipates sales growth in the range of 3-5 percent. On a GAAP basis, the company anticipates earnings per diluted share from continuing operations and fully diluted earnings per share in the range of 91-97 cents, which includes the aforementioned 2-cent dilutive tax effect.
For the full fiscal year, Clorox continues to anticipate sales growth in the range of 3-5 percent. On a GAAP basis, Clorox now anticipates earnings per diluted share in the range of $5.95-$6.05, and earnings per diluted share from continuing operations in the range of $2.72-$2.82. The company's fiscal year 2005 outlook assumes full-year weighted average shares outstanding of about 180 million.
Third-Quarter Conference Call and Webcast
On Thursday, May 5, Clorox will host a live audio webcast of a discussion with the investment community regarding the company's third-quarter results. The webcast will begin at 10:30 a.m. Pacific time (1:30 p.m. Eastern time), and can be accessed at www.TheCloroxCompany.com/investors/index.html. A replay of the webcast will be available for one week on the company's Web site.
Quarterly Dividend
Separately, the company announced that its board of directors has declared a regular quarterly dividend of 28 cents per share on the company's common stock, payable May 13, 2005, to stockholders of record on April 28, 2005.
The Clorox Company
The Clorox Company is a leading manufacturer and marketer of consumer products with fiscal year 2004 revenues of $4.3 billion. Clorox markets some of consumers' most trusted and recognized brand names, including its namesake bleach and cleaning products, Armor All® and STP® auto care products, Fresh Step® and Scoop Away® cat litters, Kingsford® charcoal briquets, Hidden Valley® and K C Masterpiece® dressings and sauces, Brita® water-filtration systems, and Glad® bags, wraps and containers. With 8,600 employees worldwide, the company manufactures products in 25 countries and markets them in more than 100 countries. Clorox is committed to making a positive difference in the communities where its employees work and live. Founded in 1980, The Clorox Company Foundation has awarded cash grants totaling more than $58.3 million to nonprofit organizations, schools and colleges; and in fiscal 2004 alone made product donations valued at $5 million. For more information about Clorox, visit www.TheCloroxCompany.com.
Forward-Looking Statements
Except for historical information, matters discussed above, including statements about future volume, sales and earnings growth, profitability, costs, cost savings or expectations, are forward-looking statements based on management's estimates, assumptions and projections. Important factors that could cause results to differ materially from management's expectations are described in "Forward-Looking Statements and Risk Factors" and "Management's Discussion & Analysis" in the company's SEC Form 10-K for the year ended June 30, 2004, as updated from time to time in the company's SEC filings. Those factors include, but are not limited to, general economic and marketplace conditions and events; competitors' actions; the company's costs, including changes in exposure to commodity costs; the company's actual cost performance; risks inherent in litigation and international operations; the ability to manage and realize the benefits of joint ventures and other cooperative relationships, including the company's joint venture with Procter & Gamble regarding the company's Glad plastic bags, wraps and containers business; the success of new products; the integration of acquisitions and mergers; the divestiture of non-strategic businesses; and environmental, regulatory and intellectual property matters. In addition, the company's future performance is subject to risks particular to the share exchange transaction with Henkel, including the sustainability of cash flows and the actual level of debt costs. Declines in cash flow, whether resulting from tax payments, debt payments, share repurchases or otherwise, or interest cost increases greater than management expects, could adversely affect the company's earnings.
The company's forward-looking statements are and will be based on management's then 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.