10-QPeriod: Q2 FY2010

CHURCH & DWIGHT CO INC /DE/ Quarterly Report for Q2 Ended Apr 2, 2010

Filed May 11, 2010For Securities:CHD

Summary

Church & Dwight Co., Inc. reported a strong first quarter for 2010, with net sales increasing by 9.2% year-over-year to $634.6 million. This growth was driven primarily by higher product volumes and favorable foreign exchange rates, partially offset by lower pricing and divested product lines. The company also saw a significant improvement in gross margin, which rose to 45.0% from 42.9% in the prior year, attributed to increased volumes, lower manufacturing costs (including benefits from the new York facility), and reduced shutdown costs from the North Brunswick plant closure. Net income for the quarter was $79.97 million, or $1.11 per diluted share, a notable increase from $62.57 million, or $0.88 per diluted share, in the first quarter of 2009. This performance demonstrates effective cost management and sales growth across its key segments, particularly Consumer Domestic and Consumer International. The company also maintained a strong liquidity position with $446.6 million in cash and significant available credit facilities, underscoring its financial stability.

Financial Highlights

30 data points
Beta

Revenue

$640.90M

45.4% Gross Margin

Net Income

$74.20M

11.6% Net Margin

EPS (Diluted)

$0.26

Cash & Equivalents

$446.60M

Free Cash Flow

$62.80M

Financial Statements
Beta
Revenue$640.90M
Cost of Revenue$349.10M
Gross Profit$290.90M
SG&A Expenses$84.60M
Operating Income$120.00M
Interest Expense$8.20M
Net Income$74.20M
EPS (Basic)$0.27
EPS (Diluted)$0.26
Shares Outstanding (Basic)283.20M
Shares Outstanding (Diluted)288.00M

Key Highlights

  • 1Net sales grew 9.2% to $634.6 million in Q1 2010 compared to Q1 2009.
  • 2Gross margin improved to 45.0% from 42.9% in the prior year's quarter, driven by volume, cost efficiencies, and facility consolidation benefits.
  • 3Net income increased significantly to $79.97 million ($1.11/share diluted) from $62.57 million ($0.88/share diluted) year-over-year.
  • 4Consumer Domestic segment sales increased by 6.5%, driven by higher volumes in key brands like ARM & HAMMER.
  • 5Consumer International segment experienced robust growth of 24.0%, benefiting from favorable foreign exchange rates and increased unit volumes.
  • 6The company ended the quarter with a strong cash position of $446.6 million, supported by available credit facilities.
  • 7The company successfully repaid $30 million in short-term borrowings related to its accounts receivable securitization facility.

Frequently Asked Questions

The primary driver of the sales increase was higher product volumes, accounting for 10.2% of the growth. Favorable foreign exchange rate fluctuations also contributed significantly, adding 2.7% to net sales.

The company's gross margin improved by 210 basis points to 45.0% in the first quarter of 2010, compared to 42.9% in the same period of 2009. This improvement was attributed to higher volumes, lower manufacturing costs (including benefits from the new York facility), and reduced shutdown costs from the North Brunswick plant closure.

As of April 2, 2010, Church & Dwight Co., Inc. had $446.6 million in cash and cash equivalents. Additionally, they had $115.0 million available through their accounts receivable securitization facility and approximately $96 million available under their revolving credit facility, indicating a strong liquidity position.

Yes, the company completed the consolidation of its laundry detergent operations by opening a new integrated manufacturing plant and distribution center in York, Pennsylvania, and closing its North Brunswick, New Jersey facility. This move is expected to yield efficiencies and cost savings.