Summary
Church & Dwight Co., Inc. (CHD) reported a solid third quarter and nine-month performance for 2009, showcasing revenue growth and improved profitability. For the third quarter, net sales increased by 2.5% year-over-year, driven by higher unit volumes and pricing, despite the impact of recent divestitures. The company also achieved a significant improvement in gross margin, rising 430 basis points to 44.1%, attributed to lower commodity costs and successful cost-reduction programs. Operationally, the company generated a substantial increase in net income, up nearly 43% for the quarter to $70.0 million, translating to a diluted EPS of $0.98, up from $0.69 in the prior year. This strong performance was boosted by a $20.0 million gain from the settlement of patent litigation with Abbott Laboratories. Cash flow from operations also showed a robust increase, providing significant resources to fund capital expenditures and return value to shareholders through dividends. The company maintained a strong liquidity position, underscoring its financial stability amidst a challenging economic environment.
Financial Highlights
31 data points| Revenue | $646.10M |
| Cost of Revenue | $361.27M |
| Gross Profit | $284.90M |
| SG&A Expenses | $86.76M |
| Operating Income | $117.90M |
| Interest Expense | $8.61M |
| Net Income | $70.00M |
| EPS (Basic) | $0.25 |
| EPS (Diluted) | $0.24 |
| Shares Outstanding (Basic) | 281.68M |
| Shares Outstanding (Diluted) | 286.50M |
Key Highlights
- 1Net sales for the third quarter of 2009 increased by 2.5% to $646.2 million, driven by higher volumes and pricing.
- 2Gross profit increased significantly by $33.8 million to $284.9 million, with gross margin expanding by 430 basis points to 44.1% due to lower commodity costs and cost-saving initiatives.
- 3Net income for the third quarter surged by 43.0% to $70.0 million, resulting in diluted EPS of $0.98, up from $0.69 in the prior year.
- 4A $20.0 million gain, net of legal expenses, was recognized from the settlement of patent litigation with Abbott Laboratories, contributing to net income.
- 5Cash flow from operating activities for the first nine months of 2009 increased by $86.7 million to $308.8 million.
- 6The company declared an increased quarterly dividend from $0.09 to $0.14 per share, signifying confidence in its financial health and commitment to shareholder returns.
- 7The company maintained strong financial covenants, with a leverage ratio of 1.7 (below the maximum of 3.25) and an interest coverage ratio of 12.7 (above the minimum of 3.0).