01—Abstract
Summary
Summary of the 10-Q filed May 2, 2019. Cited figures are marked; the original filing is the authoritative source.
This 10-Q filing for Church & Dwight Co., Inc. (CHD) for the quarter ended March 31, 2019, shows a solid performance with net sales increasing by 3.8% year-over-year to $1,044.7 milliona.
This growth was primarily driven by increased product volumes in the Consumer Domestic and Consumer International segments. The company also demonstrated improved profitability, with operating income up 9.3% and net income per diluted share rising to $0.70b from $0.63 in the prior year quarter. This performance reflects successful productivity programs and favorable price/mix, which more than offset rising commodity and transportation costs.
Key financial activities during the quarter included a decrease in cash and cash equivalents from $316.7 million to $97.9 millionc, largely due to debt repayments and share repurchases. The company also announced a significant acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business shortly after the quarter's end, further bolstering its specialty haircare portfolio. Overall, the results indicate continued top-line growth and operational efficiency, positioning the company for future expansion.
02—Key points
Key Highlights
- Net sales increased by 3.8% to $1,044.7 million for the first quarter of 2019 compared to the prior year, driven by volume growth in Consumer Domestic and Consumer International segments.
- Income from operations rose by 9.3% to $240.8 million, leading to a higher operating margin of 23.1% compared to 21.9% in the prior year quarter.
- Diluted Earnings Per Share (EPS) grew to $0.70, an increase of 11.1% from $0.63 in the first quarter of 2018.
- Gross margin improved by 20 basis points to 45.1%, primarily due to productivity programs and favorable price/volume mix, which offset higher commodity and transportation costs.
- The company repurchased $100.0 million of its common stock during the quarter as part of its evergreen share repurchase program.
- Cash and cash equivalents decreased significantly to $97.9 million at the end of the quarter, primarily due to debt repayments and share repurchases.
- Subsequent to the quarter, Church & Dwight announced the acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business for $475.0 million, with potential additional earn-out payments, expanding its specialty haircare offerings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2019, Church & Dwight Co Inc kept $0.17.
- Revenue$1.04B100.0%
- Cost of revenue−$573.9M54.9%
- Gross profit$470.8M45.1%
- Operating costs−$230.0M22.0%
- Operating income$240.8M23.0%
- Interest, other & tax−$65.1M6.2%
- Net income$175.7M16.8%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2019filed May 2, 2019Financial Statements
Q1 FY2019 against Q1 FY2018
| Line item | Q1 FY2019Q1 FY2018 | Change |
|---|---|---|
| Revenue | $1.04B$1.01B | +3.8% |
| Cost of Revenue | $573.90M$554.50M | +3.5% |
| Gross Profit | $470.80M$451.50M | +4.3% |
| R&D Expenses | $20.70M$19.50M | +6.2% |
| SG&A Expenses | $131.90M$131.30M | +0.5% |
| Operating Income | $240.80M$220.30M | +9.3% |
| Interest Expense | $17.80M$20.10M | −11.4% |
| Net Income | $175.70M$157.80M | +11.3% |
| EPS (Basic) | $0.71$0.64 | +10.9% |
| EPS (Diluted) | $0.70$0.63 | +11.1% |
| Shares Outstanding (Basic) | 246.10M244.90M | +0.5% |
| Shares Outstanding (Diluted) | 251.90M250.00M | +0.8% |
05—Questions
Frequently Asked Questions
How did Church & Dwight's sales perform in the first quarter of 2019?
Net sales increased by 3.8% to $1,044.7 million in the first quarter of 2019 compared to the same period in 2018. This growth was primarily driven by increased product volumes in the Consumer Domestic and Consumer International segments.
What was the impact of the new lease accounting standard adopted in January 2019?
The company adopted the new lease accounting standard on January 1, 2019. This resulted in the recognition of Right of Use Assets and corresponding Lease Liabilities on the balance sheet, with no material impact on the Company's results of operations or cash flows.
How did the company manage its debt during the quarter?
The company repaid $300.0 million of Floating Rate Senior Notes that matured in January 2019 and reduced commercial paper borrowings compared to the prior year. Total long-term debt decreased, and the company also amended its revolving credit facility to extend its term.
What significant corporate actions occurred shortly after the quarter ended?
Subsequent to the first quarter of 2019, on May 1, 2019, Church & Dwight closed on the acquisition of the FLAWLESS™ and FINISHING TOUCH™ hair removal business for $475.0 million, plus potential earn-out payments. The company also amended its credit agreement and entered into a new term loan to help fund this acquisition.
06—Continue