01—Abstract
Summary
Summary of the 10-Q filed May 11, 2010. Cited figures are marked; the original filing is the authoritative source.
Church & Dwight Co., Inc. reported a strong first quarter for 2010, with net sales increasing by 9.2% year-over-year to $634.6 milliona.
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 millionb, 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 millionc in cash and significant available credit facilities, underscoring its financial stability.
02—Key points
Key Highlights
- Net sales grew 9.2% to $634.6 million in Q1 2010 compared to Q1 2009.
- Gross margin improved to 45.0% from 42.9% in the prior year's quarter, driven by volume, cost efficiencies, and facility consolidation benefits.
- Net income increased significantly to $79.97 million ($1.11/share diluted) from $62.57 million ($0.88/share diluted) year-over-year.
- Consumer Domestic segment sales increased by 6.5%, driven by higher volumes in key brands like ARM & HAMMER.
- Consumer International segment experienced robust growth of 24.0%, benefiting from favorable foreign exchange rates and increased unit volumes.
- The company ended the quarter with a strong cash position of $446.6 million, supported by available credit facilities.
- The company successfully repaid $30 million in short-term borrowings related to its accounts receivable securitization facility.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2010, Church & Dwight Co Inc kept $0.12.
- Revenue$640.9M100.0%
- Cost of revenue−$350.0M54.6%
- Gross profit$290.9M45.4%
- Operating costs−$170.9M26.7%
- Operating income$120.0M18.7%
- Interest, other & tax−$45.8M7.1%
- Net income$74.2M11.6%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2010filed May 11, 2010Financial Statements
Q2 FY2010 against Q2 FY2009
| Line item | Q2 FY2010Q2 FY2009 | Change |
|---|---|---|
| Revenue | $640.90M$623.10M | +2.9% |
| Cost of Revenue | $349.10M$341.57M | +2.2% |
| Gross Profit | $290.90M$281.60M | +3.3% |
| SG&A Expenses | $84.60M$88.84M | −4.8% |
| Operating Income | $120.00M$99.00M | +21.2% |
| Interest Expense | $8.20M$9.23M | −11.2% |
| Net Income | $74.20M$58.20M | +27.5% |
| EPS (Basic) | $0.27$0.21 | +26.2% |
| EPS (Diluted) | $0.26$0.20 | +26.8% |
| Shares Outstanding (Basic) | 283.20M281.37M | +0.7% |
| Shares Outstanding (Diluted) | 288.00M285.71M | +0.8% |
05—Questions
Frequently Asked Questions
What was the primary driver of the sales increase in the first quarter of 2010?
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.
How did the company's gross margin perform in the first quarter?
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.
What is the company's current liquidity position?
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.
Were there any significant operational changes during the quarter?
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.
06—Continue