01—Abstract
Summary
Summary of the 10-K filed February 24, 2011. Cited figures are marked; the original filing is the authoritative source.
This 2010 annual report for Church & Dwight Co., Inc. (CHD) highlights a year of strategic acquisitions and debt reduction, setting a positive tone for investors.
The company successfully acquired the Simply Saline and Feline Pine brands, strengthening its personal care and pet care portfolios, respectively. Financially, CHD demonstrated a solid performance with increased net sales and operating income, driven by growth in its Consumer Domestic and International segments, alongside a stable contribution from its Specialty Products segment.
The company also made significant strides in optimizing its financial structure by reducing its total debt substantially, particularly through the repayment of term loans and subordinated notes, supported by strong operating cash flows and a new revolving credit facility. These actions indicate a focus on operational efficiency and financial health, aiming to enhance shareholder value.
02—Key points
Key Highlights
- Net sales increased by 2.7% to $2.59 billion in 2010, driven by volume growth and strategic acquisitions.
- The company completed two strategic acquisitions: Simply Saline for $70 million and Feline Pine for $46 million, bolstering its brand portfolio.
- Operating income increased to $445.0 million, representing 16.4% of net sales, indicating improved operational performance.
- Significant debt reduction was achieved, with total debt decreasing from $816.3 million in 2009 to $339.7 million in 2010, reflecting successful refinancing and debt repayment efforts.
- The company's Consumer Domestic segment remains the largest, contributing 73% of net sales, with strong performance in household and personal care products.
- The Consumer International segment showed robust growth, with net sales increasing by 12.8% to $444.0 million.
- The company increased its regular quarterly dividend by 100% to $0.34 per share, signaling confidence in future cash flows and commitment to shareholder returns.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2010, Church & Dwight Co Inc kept $0.10.
- Revenue$2.59B100.0%
- Cost of revenue−$1.43B55.3%
- Gross profit$1.16B44.7%
- Operating costs−$712.8M27.5%
- Operating income$445.0M17.2%
- Interest, other & tax−$174.3M6.7%
- Net income$270.7M10.5%
Where FY2010 revenue went
$2.59B- Cost of revenue: $1.43B, 55% of revenue
- SG&A: $374.8M, 14% of revenue
- Net income: $270.7M, 10% of revenue
- R&D: $53.7M, 2.1% of revenue
- Other operating costs: $284.3M, 11% of revenue
- Interest, other & tax: $174.3M, 6.7% of revenue
Kept 10% as net incomeR&D $53.7M · 2.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2010filed February 24, 2011Financial Statements
FY2010 against FY2009
| Line item | FY2010FY2009 | Change |
|---|---|---|
| Revenue | $2.59B$2.52B | +2.7% |
| Cost of Revenue | $1.43B$1.42B | +0.8% |
| Gross Profit | $1.16B$1.10B | +5.2% |
| R&D Expenses | $53.70M$55.10M | −2.5% |
| SG&A Expenses | $374.80M$354.50M | +5.7% |
| Operating Income | $445.00M$412.90M | +7.8% |
| Interest Expense | $27.80M$35.60M | −21.9% |
| Net Income | $270.70M$243.50M | +11.2% |
| EPS (Basic) | $0.95$0.86 | +10.4% |
| EPS (Diluted) | $0.94$0.85 | +10.0% |
| Shares Outstanding (Basic) | 284.00M281.60M | +0.9% |
| Shares Outstanding (Diluted) | 288.80M286.00M | +1.0% |
05—Questions
Frequently Asked Questions
What were the key acquisitions made by Church & Dwight in 2010?
In 2010, Church & Dwight made two key acquisitions: the Simply Saline brand of nasal saline moisturizers for $70 million and the Feline Pine cat litter brand for $46 million. These acquisitions are expected to complement and strengthen the company's existing product lines.
How did the company's debt situation change in 2010?
Church & Dwight significantly reduced its debt in 2010. Total debt decreased from $816.3 million in 2009 to $339.7 million by year-end 2010. This was achieved through the repayment of term loans and senior subordinated notes, supported by strong cash flows and a new $500 million revolving credit facility.
What was the performance of the company's main business segments?
The Consumer Domestic segment, the largest, accounted for 73% of net sales and saw a slight increase. The Consumer International segment demonstrated strong growth with a 12.8% increase in net sales. The Specialty Products segment (SPD) contributed 10% of net sales and showed a modest increase.
What significant events impacted the company's reported earnings in 2010?
The company reported a pension settlement charge of approximately $24 million pre-tax ($0.21 per share) in the fourth quarter of 2010 due to the termination of its U.S. pension plan for hourly employees. Additionally, the company recorded higher raw material and energy costs, which were partially offset by cost efficiencies and price increases.
06—Continue