01—Abstract
Summary
Summary of the 10-K filed February 24, 2010. Cited figures are marked; the original filing is the authoritative source.
Church & Dwight Co., Inc. (CHD) reported a strong performance in their 2010 10-K filing for the fiscal year ending December 31, 2009.
The company demonstrated revenue growth driven by higher volumes, improved sales mix, and price increases across its key product categories. Significant investments in marketing and product development were made to support new product introductions and brand strength. The company also successfully navigated a challenging economic environment by focusing on its core "power brands" and implementing cost-efficiency measures, including the completion of a new manufacturing facility in York, Pennsylvania, which improved operational efficiencies.
Financially, CHD showed a healthy increase in net sales and income from operations, supported by favorable commodity costs and successful cost reduction programs. The company also managed its debt effectively, reducing its overall debt levels and strengthening its balance sheet.
The acquisition of the Orajel brand in the previous year continued to contribute positively to results. Despite ongoing competitive pressures and economic uncertainties, Church & Dwight appeared well-positioned due to its diversified brand portfolio and focus on consumer staples.
02—Key points
Key Highlights
- Net sales increased by approximately 4% to $2.52 billion in 2009 compared to 2008, driven by price increases, improved sales mix, and higher volumes.
- Income from operations grew by approximately 21% to $412.9 million in 2009, reflecting improved gross margins and effective cost management.
- The company completed the construction and start-up of a new integrated laundry detergent manufacturing plant and distribution center in York, Pennsylvania, enhancing operational efficiency.
- A pre-tax gain of $20 million was recognized from a patent infringement litigation settlement with Abbott Laboratories.
- Marketing expenses increased by 20% to $353.6 million, supporting key brands and new product initiatives.
- The company successfully reduced total debt by $39.8 million to $816.3 million in 2009 and improved its debt-to-capitalization ratio to 34%.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2009, Church & Dwight Co Inc kept $0.10.
- Revenue$2.52B100.0%
- Cost of revenue−$1.42B56.3%
- Gross profit$1.10B43.7%
- Operating costs−$688.1M27.3%
- Operating income$412.9M16.4%
- Interest, other & tax−$169.4M6.7%
- Net income$243.5M9.7%
Where FY2009 revenue went
$2.52B- Cost of revenue: $1.42B, 56% of revenue
- SG&A: $354.5M, 14% of revenue
- Net income: $243.5M, 9.7% of revenue
- R&D: $55.1M, 2.2% of revenue
- Other operating costs: $278.5M, 11% of revenue
- Interest, other & tax: $169.4M, 6.7% of revenue
Kept 9.7% as net incomeR&D $55.1M · 2.2%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2009filed February 24, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $2.52B$2.42B | +4.1% |
| Cost of Revenue | $1.42B$1.45B | −2.1% |
| Gross Profit | $1.10B$971.72M | +13.3% |
| R&D Expenses | $55.10M— | — |
| SG&A Expenses | $354.50M$337.26M | +5.1% |
| Operating Income | $412.90M$340.33M | +21.3% |
| Interest Expense | $35.60M$46.95M | −24.2% |
| Net Income | $243.50M$195.17M | +24.8% |
| EPS (Basic) | $0.86$0.72 | +20.1% |
| EPS (Diluted) | $0.85$0.69 | +22.3% |
| Shares Outstanding (Basic) | 281.60M271.48M | +3.7% |
| Shares Outstanding (Diluted) | 286.00M284.46M | +0.5% |
05—Questions
Frequently Asked Questions
What were the main drivers of Church & Dwight's revenue growth in 2009?
Revenue growth in 2009 was primarily driven by higher selling prices, an improved sales mix, and increased sales volumes across its product lines. The contribution from products acquired in the Orajel acquisition in July 2008 also positively impacted revenue.
How did the company manage costs in 2009?
Church & Dwight benefited from lower commodity costs for materials like surfactants, diesel fuel, and paper packaging. The company also implemented cost reduction programs and realized efficiencies from cost improvement initiatives and the new York, Pennsylvania facility. However, some commodity costs, such as soda ash, did increase.
What significant events impacted the company's financial results in 2009?
Key events included the completion of the new York, Pennsylvania manufacturing facility, a $20 million pre-tax gain from settling patent litigation with Abbott Laboratories, and the sale of certain non-core personal care product lines. The company also incurred charges related to the closure of its North Brunswick, New Jersey facility.
How is the company managing its debt and liquidity?
The company reported a total debt of $816.3 million as of December 31, 2009, a decrease from the prior year. It had significant cash and cash equivalents, along with substantial availability under its revolving credit facility and accounts receivable securitization facility, indicating strong liquidity. The company anticipates these resources will be sufficient to meet its capital expenditure and debt obligations.
06—Continue