10-KPeriod: FY2010

CHURCH & DWIGHT CO INC /DE/ Annual Report, Year Ended Dec 31, 2010

Filed February 24, 2011For Securities:CHD

Summary

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.

Financial Highlights

56 data points
Beta

Revenue

$2.59B

44.7% Gross Margin

Net Income

$270.70M

10.5% Net Margin

EPS (Diluted)

$0.94

Total Assets

$2.95B

Cash & Equivalents

$189.20M

Free Cash Flow

$364.70M

Financial Statements
Beta
Revenue$2.59B
Cost of Revenue$1.43B
Gross Profit$1.16B
R&D Expenses$53.70M
SG&A Expenses$374.80M
Operating Income$445.00M
Interest Expense$27.80M
Net Income$270.70M
EPS (Basic)$0.95
EPS (Diluted)$0.94
Shares Outstanding (Basic)284.00M
Shares Outstanding (Diluted)288.80M

Key Highlights

  • 1Net sales increased by 2.7% to $2.59 billion in 2010, driven by volume growth and strategic acquisitions.
  • 2The company completed two strategic acquisitions: Simply Saline for $70 million and Feline Pine for $46 million, bolstering its brand portfolio.
  • 3Operating income increased to $445.0 million, representing 16.4% of net sales, indicating improved operational performance.
  • 4Significant 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.
  • 5The company's Consumer Domestic segment remains the largest, contributing 73% of net sales, with strong performance in household and personal care products.
  • 6The Consumer International segment showed robust growth, with net sales increasing by 12.8% to $444.0 million.
  • 7The company increased its regular quarterly dividend by 100% to $0.34 per share, signaling confidence in future cash flows and commitment to shareholder returns.

Frequently Asked Questions

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.

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.

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.

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.