-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Haa3MvJyteadrcKXXw44Hg2GfnsSnXPX4lE+3C0hYEt2ka1iHy0KgTTB1yehixBB 96GQgvFdKMXbFU1WIBY7jA== 0000021076-95-000005.txt : 19951002 0000021076-95-000005.hdr.sgml : 19951002 ACCESSION NUMBER: 0000021076-95-000005 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950928 SROS: AMEX SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLOROX CO /DE/ CENTRAL INDEX KEY: 0000021076 STANDARD INDUSTRIAL CLASSIFICATION: SPECIALTY CLEANING, POLISHING AND SANITATION PREPARATIONS [2842] IRS NUMBER: 310595760 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07151 FILM NUMBER: 95576725 BUSINESS ADDRESS: STREET 1: 1221 BROADWAY CITY: OAKLAND STATE: CA ZIP: 94612 BUSINESS PHONE: 5102717000 MAIL ADDRESS: STREET 1: P.O. BOX 24305 CITY: OAKLAND STATE: CA ZIP: 94612-1305 10-K 1 FORM 10-K TEXT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) [x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transmission period from to ----- ----- Commission file number 1-07151 THE CLOROX COMPANY (Exact name of registrant as specified in its charter) DELAWARE 31-0595760 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1221 Broadway, Oakland, CA 94612-1888 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (510) 271-7000 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered - ------------------------------ ------------------------ Common Stock, $1 par value New York Stock Exchange Pacific Stock Exchange Securities registered pursuant to Section 12(g) of the Act: NONE. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.[ ] Aggregate market value of voting stock held by non-affiliates of the registrant at July 31, 1995: $2,410,890,628. Number of shares of common stock outstanding at July 31, 1995: 52,437,995. DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant's Annual Report to Stockholders for the Year Ended June 30, 1995 are incorporated by reference into Parts I, II and IV of this Report. Portions of the registrant's definitive Proxy Statement for the Annual Meeting of Stockholders to be held on November 15, 1995, which will be filed with the United States Securities and Exchange Commission within 120 days after the end of the registrant's fiscal year ended June 30, 1995, are incorporated by reference into Part III of this Report. PART I ITEM l. BUSINESS - ----------------- (a) GENERAL DEVELOPMENT OF BUSINESS. The Company (the term "Company" as used herein includes the registrant identified on the facing sheet, The Clorox Company, and its subsidiaries, unless the context indicates otherwise) was originally founded in Oakland, California in 1913 as the Electro-Alkaline Company. It was reincorporated as Clorox Chemical Corporation in 1922, as Clorox Chemical Co. in 1928, and as The Clorox Company (an Ohio corporation) in 1957, when the business was acquired by The Procter & Gamble Company. The Company was fully divested by The Procter & Gamble Company in 1969 and, as an independent company, was reincorporated in 1973 in California as The Clorox Company. In 1986, the Company was reincorporated in Delaware. The Clorox Company Annual Report for the Year Ended June 30, 1995 ("Annual Report") to its stockholders is included in this Form l0-K. Portions of the Annual Report are incorporated herein by specific reference. During fiscal year 1995, the Company continued the implementation of a new strategy for its domestic business. The Company continued to focus on expanding the business through internal development of new products and line extensions of existing products. The Company introduced 16 new products in the U.S. during fiscal year 1995. It also continued its strategy of considering strategic acquisitions and, in that regard, acquired "Black Flag" brand of aerosol insecticides in September 1995. The Company also acquired Canada-based Brita International Holdings, Inc. as a geographic expansion of the Company's "Brita" brand water filtration systems. Internationally, the Company continued the implementation of its strategy of expanding its laundry, household cleaning and insecticide businesses to markets where these categories are not yet fully developed, but where high potential exists. The Company made eight international acquisitions in fiscal year 1995, increased its ownership in three additional businesses, and established businesses in eight new countries, including Brazil, Peru, the Czech Republic, the Slovak Republic and the People's Republic of China. In addition, the Company introduced 22 new products or line extensions in previously established international operations. (b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. The Company's operations are predominantly in one segment -- non-durable household consumer products. Such operations include the production and marketing of non-durable consumer products sold primarily through grocery and other retail stores. Financial information for the last three fiscal years attributable to the Company's operations is set forth in the Consolidated Financial Statements, pages 20 through 29 of the Annual Report, incorporated herein by this reference. (c) NARRATIVE DESCRIPTION OF BUSINESS. PRINCIPAL PRODUCTS. Products currently marketed in the United States and certain foreign countries are listed on page 36 of the Annual Report, incorporated herein by this reference. PRINCIPAL MARKETS - METHODS OF DISTRIBUTION. Most non- durable household consumer products are nationally advertised and sold within the United States to grocery stores through a network of brokers that was reduced through consolidation during fiscal year 1995, and to mass merchandisers, warehouse clubs, military and other retail stores primarily through a direct sales force. The Company also sells, within the United States, institutional versions of specialty food and non-food products. Outside the United States, the Company sells consumer products through subsidiaries, licensees, distributors and joint venture arrangements with local partners. SOURCES AND AVAILABILITY OF RAW MATERIALS. The Company has obtained ample supplies of all required raw materials and packaging supplies, which, with a few exceptions, were available from a wide variety of sources during fiscal year 1995. Contingency plans have been developed for single sourced supplier materials. No supply problems are presently anticipated. PATENTS AND TRADEMARKS. Although some products are covered by patents, the Company does not believe that patents, patent licenses or similar arrangements are material to its business. Most of the Company's brand name consumer products are protected by registered trademarks. Its brand names and trademarks are extremely important to its business and the Company pursues a course of vigorous action against apparent infringements. SEASONALITY. The only portions of the operations of the Company which have any significant degree of seasonality are the marketing of charcoal briquets and insecticides. Most sales of these product lines occur in the third and fourth fiscal quarters. Working capital to carry inventories built up in the off-season and to extend terms to customers is generally provided by internally generated funds plus commercial paper lines of credit. CUSTOMERS AND ORDER BACKLOG. During fiscal years 1994 and 1995, revenue from the Company's sales of its products to Wal-Mart Stores, Inc. and its affiliated companies exceeded 10% of the Company's gross consolidated revenues. Except for this relationship, the Company is not dependent upon any other single customer or a few customers. Order backlog is not a significant factor in the Company's business. RENEGOTIATION. None of the Company's operations is subject to renegotiation or termination at the election of the Federal government. COMPETITION. The markets for consumer products are highly competitive and most of the Company's products compete with other nationally advertised brands within each category, and with "private label" brands and "generic" non-branded products of grocery chains and wholesale cooperatives. Competition is encountered from similar and alternative products, many of which are produced and marketed by major national concerns having financial resources greater than those of the Company. Depending on the competitor, the Company's products compete with competitive products on price, quality or other benefits to consumers. A newly introduced consumer product (whether improved or newly developed) usually encounters intense competition requiring substantial expenditures for advertising and sales promotion. If a product gains consumer acceptance, it normally requires continuing advertising and promotional support to maintain relative market position. RESEARCH AND DEVELOPMENT. The Company's operations incurred expenses of approximately $44,819,000 in fiscal year 1995, $44,558,000 in fiscal year 1994, and $42,445,000 in fiscal year 1993 on research activities relating to the development of new products or the maintenance and improvement of existing products. None of such research activity was customer sponsored. ENVIRONMENTAL MATTERS. The Company does not anticipate making material capital expenditures in the future for environmental control facilities or to comply with environmental laws and regulations. However, in general, the Company does anticipate spending increasing amounts annually for facility upgrades and for environmental programs. The amount of capital expenditures for environmental compliance was not material in fiscal year 1995 and is not expected to be material in the next fiscal year. In addition, the Company is involved in certain other environmental matters, as follows: (i) The Company sold its architectural coatings business in fiscal year 1990. In connection with the disposition of those manufacturing facilities, the Company retained responsibility for certain environmental obligations. The financial reserve established at the time of the sale is expected to be adequate to cover the financial responsibilities for environmental matters which may arise in the future. (ii) The Company has been named as a potentially responsible party ("PRP") by the Environmental Protection Agency pursuant to the Spill Compensation and Control Act, the Sanitary Landfill Closure and Contingency Fund Act, and a section of the Solid Waste Management Act, for a site in New Jersey. Based on the Company's experience and because the Company's level of involvement is extremely limited, the Company does not expect that this matter will represent a material cost to the Company in the future. The Company settled a similar matter for another site in New Jersey during fiscal year 1995 and does not expect such settlement to represent a material cost in the future. (iii)The Company sold its Jersey City, New Jersey manufacturing facility during fiscal year 1994. In connection with the disposition of this manufacturing facility, the Company retained responsibility for certain environmental obligations. The Company does not expect that the cost of any future environmental liability in connection with the sale of this facility will be material. (iv) The Company operates a water treatment operation at its former Oakland, California manufacturing location and may undertake additional remediation in the future to recondition such property for sale. A financial reserve established in an earlier year is considered by management to be adequate to cover the future costs or liability in connection with this manufacturing location. (v) During fiscal year 1995, the Company entered into a "de minimis" settlement relating to its alleged involvement at the American Chemical Services site in Griffith, Indiana. The Company does not expect the settlement to represent a material cost in the future. (vi) The Company has been identified as a PRP by the Environmental Protection Agency for a site in Johnson County, Kansas. The Company is continuing to negotiate a settlement of this matter, which is not expected to represent a material cost to the Company. (vii)In fiscal year 1994, the Company incurred environmental remediation costs at one of its facilities in Chicago, Illinois, which were not material. In fiscal year 1995, the Company received partial reimbursement of these costs from an adjacent property owner. (viii)The Company has announced that it contemplates the sale of its Frederick, Maryland manufacturing facility. Customary environmental investigations are being conducted in conjunction with the contemplated sales of these sites. The Company does not expect that material environmental liabilities will be identified, and accordingly has not recorded any loss contingencies. During fiscal year 1995, the Company sold its Dyersburg, Tennessee manufacturing facility, but the Company does not expect any future environmental liability in connection with such sale. (ix) The Company has been named in a private action by a party seeking contribution by the Company for remediation costs relating to a site that the Company may have formerly been associated with in Dickinson County, Michigan. Although the parties are currently in the discovery process and the basis for the Company's potential liability has not yet been clearly identified, the Company does not expect that this matter will represent a material cost in the future. (x) A former subsidiary of the Company has been named as a PRP by the Environmental Protection Agency for a site in Tulalip, Washington in connection with the Company's former architectural coatings business. Pursuant to the terms of the agreement by which the Company sold such architectural coatings business, the Company has been responding to this matter. Based on the Company's experience and because the Company's level of involvement is extremely limited, the Company does not expect that this matter will represent a material cost to the Company in the future. Although the potential cost to the Company related to the above ongoing environmental matters is uncertain due to such factors as: the unknown magnitude of possible pollution and clean-up costs; the complexity and evolving nature of governmental laws and regulations and their interpretations; and the timing, varying costs and effectiveness of alternative clean-up technologies; based on its experience and without offsetting for expected insurance recoveries or discounting for present value, the Company does not expect that such costs individually and in the aggregate will represent a material cost to the Company or affect its competitive position. NUMBER OF PERSONS EMPLOYED. At the end of fiscal year 1995, approximately 4,700 persons were employed by the Company's continuing operations. (d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES. Net sales, pretax earnings and identifiable assets related to foreign operations and export sales are each below l0% of the respective consolidated amounts for the Company for fiscal year 1995 and have been below these levels for the two preceding fiscal years, but may not be indicative of future levels due to the Company's strategy to expand its international operations. ITEM 2. PROPERTIES - ------------------- PRODUCTION FACILITIES. The Company operates production and major warehouse facilities for its operations in 17 locations throughout the United States, and in 21 locations internationally. The vast majority of the space is owned. Some space, mainly for warehousing, is leased. The facility in Dyersburg, Tennessee was sold during fiscal year 1995. The Frederick, Maryland facility was closed in August 1994. As part of the acquisition of S.O.S in fiscal year 1994, the Company acquired two facilities, one in the United States and the other in Canada. The Canadian S.O.S facility was closed in fiscal year 1995. The Company acquired a production facility in Argentina in August 1995. The Company considers its manufacturing and warehousing facilities to be adequate to support its business. OFFICES AND TECHNICAL CENTER. The Company's general office building is owned and is located in Oakland, California. The Company also occupies leased office space in Oakland one block from its general office building. However, the lease will terminate and the Company plans to vacate such leased office space in Oakland during fiscal year 1996. The Company's Technical Center and Data Center are owned and are located in Pleasanton, California. Leased sales and other office facilities are located at a number of manufacturing and other locations. ENCUMBRANCES. None of the Company's owned facilities are encumbered to secure debt owed by the Company, except that the manufacturing facilities in Wheeling, Illinois and Belle, Missouri secure industrial revenue bond indebtedness incurred in relation to the construction or upgrade thereof. ITEM 3. LEGAL PROCEEDINGS - -------------------------- None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ None. EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current positions of the executive officers of the Company are set forth below: Name (Age) and Year Elected to Current Position Title and Current Position(s) - ------------------------------------------- - ----------------------------- G. C. Sullivan (55) 1992 Chairman of the Board, Chief Executive Officer and President W. F. Ausfahl (55) 1983 Group Vice President and Chief Financial Officer E. A. Cutter (56) 1992 Senior Vice President-General Counsel and Secretary N. P. DeFeo (49) 1993 Group Vice President-U.S. Operations R. A. Llenado (48) 1992 Group Vice President-Technical P. N. Louras, Jr. (45) 1992 Group Vice President A. W. Biebl (45) 1992 Vice President-Manufacturing, Engineering and Distribution R. H. Bolte (55) 1995 Vice President-Corporate Marketing Services J. M. Brady (41) 1993 Vice President-Human Resources J. O. Cole (54) 1992 Vice President-Corporate Affairs R. T. Conti (40) 1992 Vice President-International C. M. Couric (48) 1995 Vice President-Brita Products L. Griffey (59) 1993 Vice President-International Manufacturing G. E. Johnston (48) 1993 Vice President-Kingsford Products Division R. C. Klaus (50) 1990 Vice President-Professional Products D. C. Murray (59) 1989 Vice President-Household Products L. S. Peiros (40) 1995 Vice President-Food Products Division K. M. Rose (46) 1993 Vice President-Treasurer H. J. Salvo, Jr. (47) 1991 Vice President-Controller B. A. Sudbury (48) 1992 Vice President-Research and Development F. A. Tataseo (41) l994 Vice President-Sales C. E. Williams (46) 1993 Vice President-Information Services
There is no family relationship between any of the above named persons, or between any of such persons and any of the directors of the Company or any persons nominated for election as a director of the Company. See Item 10 of Part III of this Form 10-K. The current term of office of each officer is from the date of the officer's election to the date of the first Board of Directors' meeting following the next Annual Meeting of Stockholders or until the officer's successor is elected, subject to the power of the Board of Directors to remove any officer at any time. W. F. Ausfahl, R. C. Klaus and D.C. Murray have been employed by the Company for at least the past five years in the same respective positions as listed above. The other executive officers have held the respective positions described below for at least the past five years: G. C. Sullivan joined the Company in 1971 in the sales department of Household Products. Prior to his election as Chairman of the Board, Chief Executive Officer and President in 1992, he was Group Vice President from 1989 through 1992 and Vice President-Household Products from 1984 through 1989. E. A. Cutter joined the Company in June 1983 as Vice President-General Counsel and Secretary. He held this position through June 1, 1992, when he was elected Senior Vice President-General Counsel and Secretary, with additional responsibility for the Company's government affairs and community affairs functions. N. P. DeFeo joined the Company in June 1993 as Group Vice President-U.S. Operations. Previously, he had been with The Procter & Gamble Company for 25 years. His last position there was as Vice President and Managing Director of Worldwide Strategic Planning, Laundry and Cleaning Products. R. A. Llenado joined the Company in September 1991 as Group Vice President. Prior to joining the Company, he was Vice President, Research and Development, L & F Products, Inc. (formerly Lehn & Fink Products Group, a subsidiary of Eastman Kodak Co.) from 1988 to 1991. P. N. Louras, Jr. joined the Company in April 1980 as Manager, Analysis and Control, Kingsford Products. Prior to his election as Group Vice President effective June 1, 1992, he was Vice President-International from August 1990 through May 1992, Vice President-Controller from July 1988 through August 1990 and Controller, Household Products from 1987 through July 1988. A. W. Biebl joined the Company in 1981 as Manufacturing Manager, Food Service. Prior to his election as Vice President-Manufacturing, Engineering and Distribution effective June 1, 1992, he was Vice President-Kingsford Products from 1989 through May 1992 and Vice President-Food Service Products from 1985 through 1989. R. H. Bolte joined the Company in April 1982. Prior to his election as Vice President-Corporate Marketing Services in July 1995, he was Director of Advertising and Promotion from June 1993 through June 1995 and Director of Media Services from May 1982 through May 1993. J. M. Brady joined the Company in 1976 as a brand assistant in Marketing, Household Products. From November 1991 until her election as Vice President-Human Resources in September 1993, she was Vice President-Corporate Marketing Services. She was director of Corporate Marketing Services from August 1991 through November 1991, Director of Marketing, Kingsford Products from 1989 through August 1991 and held various marketing positions for Household Products and Kingsford Products from 1987 through 1989. J. O. Cole joined the Company in 1973 as an attorney in its Legal Services Department. He has served in numerous capacities in that Department and was named Associate General Counsel in 1992. In November 1992, he was elected to the position of Vice President- Corporate Affairs. R. T. Conti joined the Company in 1982 as Associate Region Sales Manager, Household Products. Prior to his election as Vice President-International effective June 1, 1992, he was Area General Manager-International for Europe, Middle East and Africa from 1990 through May 1992 and Manager of Sales Planning for Household Products from 1987 through 1990. C. M. Couric joined the Company in 1973 as a Brand Assistant in the Household Products marketing organization. Prior to his election in July, 1995 as Vice President-Brita Products, he had served as Director, Brita Operations from 1988 through June 1995 and as a Manager of Business Development from 1984 through 1988. G. E. Johnston joined the Company in July 1981 as Regional Sales Manager-Special Markets. Prior to his election as Vice President-Kingsford Product Division effective November 17, 1993, he was Vice President-Corporate Development from June 1992 through November 16, 1993, and Director of Corporate Development from 1991 through May 1992, and Director of Business Development from September 1989 through 1991. L. S. Peiros joined the Company in 1982 and was elected Vice President-Food Products Division effective July 1995. From September 1993 until his election to his current position he was Vice President-Corporate Marketing Services. From June 1992 through August 1993 he was Director of Marketing-Household Products and from August 1991 through June 1992 he was Director of Marketing-Kingsford Products. Prior to that he had served in various marketing positions in both Household Products and Kingsford Products. K. M. Rose joined the Company in 1978 as a financial analyst. Prior to her election as Vice President-Treasurer effective July 15, 1992, she was Controller, Household Products from July 1988 through July 1992. Beginning October 1, 1994, she also assumed responsibility for the Company's investor relations and risk management functions. H. J. Salvo, Jr. joined the Company in 1972 as a staff accountant. Prior to his election as Vice President-Controller in November 1990, he was Director of Business Development from October 1989 through September 1990 and had served as Controller for three of the Company's operating units from 1983 through September 1989. B. A. Sudbury joined the Company in 1978 as Project Leader in Research and Development. Prior to his election as Vice President-Research and Development effective June 1, 1992, he was Director of Research and Development, Household Products from 1985 through May 1992. F. A. Tataseo joined the Company in October 1994 as Vice President-Sales. Previously, he was employed by The Pillsbury Company (Division of Grand Metropolitan Inc.) as Vice President, Sales (March - September 1994), and as Vice President, Direct Sales Force (June 1993 - February 1994); and by The Procter & Gamble Company as Sales Merchandising Division Manager, Soap Sector (May 1992 - May 1993); as Division Sales Manager, Laundry Products Category (November 1990 - April 1993); and as Division Sales Manager, Fabric Care Category (July 1988 - October 1990). C. E. Williams joined the Company in May 1993 as Vice President-Information Services. From 1987 until he joined the Company, Mr. Williams was Director of Information Services of the Fritz Companies, Inc. PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED - ---------------------------------------------------------- STOCKHOLDER MATTERS - ------------------- (a) MARKET INFORMATION. The principal markets for Clorox Common Stock are the New York and Pacific Stock Exchanges. The high and low sales prices quoted for New York Stock Exchange-Composite Transactions Report for each quarterly period during the past two fiscal years appears under "Quarterly Data," page 32 of the Annual Report, incorporated herein by this reference, and on July 31, 1995, the closing price for the Company's stock was $65.625 per share. (b) HOLDERS. The approximate number of record holders of Clorox Common Stock as of July 31, 1995 was 13,056 based on information provided by the Company's transfer agent. (c) DIVIDENDS. The amount of quarterly dividends paid with respect to Clorox Common Stock during the past two fiscal years appears under "Quarterly Data," page 32 of the Annual Report, incorporated herein by this reference. ITEM 6. SELECTED FINANCIAL DATA - -------------------------------- This information appears under "Financial Summary," pages 30 and 31 of the Annual Report, incorporated herein by this reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATION - ---------------------------------- This information appears under "Management's Discussion and Analysis," pages 18 and 19 of the Annual Report, incorporated herein by this reference. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA - ---------------------------------------------------- These statements and data appear on pages 20 through 28 and 32 of the Annual Report, incorporated herein by this reference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON - --------------------------------------------------------- ACCOUNTING AND FINANCIAL DISCLOSURE - ----------------------------------- None. PART III ITEM l0. DIRECTORS AND EXECUTIVE OFFICERS OF THE - ------------------------------------------------- REGISTRANT - ---------- Information regarding each nominee for election as a director, including those who are executive officers of the Company, appears under "Nominees for Election as Directors" of the definitive Proxy Statement of the Company, which will be filed with the United States Securities and Exchange Commission within 120 days after the end of the registrant's fiscal year ended June 30, 1995 ("Proxy Statement"), incorporated herein by this reference. Pursuant to Instruction 3 to Item 401(b) of Regulation S-K, information regarding the executive officers of the registrant is reported in Part I of this Report. The information required by Item 405 of Regulation S-K appears under "Compliance with Section 16(a) of the Exchange Act" of the Proxy Statement, incorporated herein by this reference. ITEM ll. EXECUTIVE COMPENSATION - -------------------------------- The information required by Item 402 of Regulation S-K appears under "Organization of the Board of Directors," "Employee Benefits and Management Compensation Committee Report on Compensation," "Summary Compensation Table," "Options and Stock Appreciation Rights," "Comparative Stock Performance," "Pension Plan," and "Supplemental Executive Retirement Plan" of the Proxy Statement, all incorporated herein by this reference. ITEM l2. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS - --------------------------------------------------------- AND MANAGEMENT - -------------- (a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS. Information concerning the only entity or person known to the Company to be the beneficial owner of more than 5% of its Common Stock appears under "Beneficial Ownership of Voting Securities" of the Proxy Statement, incorporated herein by this reference. (b) SECURITY OWNERSHIP OF MANAGEMENT. Information concerning the beneficial ownership of the Company's Common Stock by each nominee for election as a director appears under "Nominees for Election as Directors" of the Proxy Statement and by all directors and executive officers as a group appears under "Beneficial Ownership of Voting Securities" of the Proxy Statement, both incorporated herein by this reference. ITEM l3. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS - -------------------------------------------------------- Information concerning transactions with directors, nominees for election as directors, management and the beneficial owner of more than 5% of the Company's Common Stock appears under "Beneficial Ownership of Voting Securities" of the Proxy Statement, incorporated herein by this reference. PART IV ITEM l4. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K - ----------------------------------------------------------------- - -------- (a)(1) Financial Statements: Page Financial Statements and Independent Auditors' Report Copy included in the Annual Report, incorporated herein by this Included reference: Statements of Consolidated Earnings for the years ended June 30, 1995, l994 and l993 Consolidated Balance Sheets, June 30, 1995 and l994 Statements of Consolidated Stockholders' Equity for the years ended June 30, 1995, l994 and l993 Statements of Consolidated Cash Flows for the years ended June 30, 1995, l994 and l993 Notes to Consolidated Financial Statements Independent Auditors' Report Quarterly Data (2) Financial Statement Schedules have been omitted because of the absence of conditions under which they are required, or because the information is shown elsewhere in this Form 10-K. (3) Executive Compensation Plans and Arrangements: Stock Option Plan (1977), amended 10/16/80, 7/21/82, 6/21/83, 10/19/83 and 11/17/93 (Exhibit 10(i) to Annual Report on Form 10-K for the year ended June 30, 1994) Long-Term Compensation Program dated October 21, 1987, amended 11/17/93 (Exhibit 10(ii) to Annual Report on Form 10-K for the year ended June 30, 1994) Officer Employment Contract (form) (Exhibit 10(ix) to Annual Report on Form 10-K for the year ended June 30, 1993) Supplemental Executive Retirement Plan dated July 17, 1991 (Exhibit 10(x) to Annual Report on Form 10-K for the year ended June 30, 1993) (b) Current Reports on Form 8-K during the fourth quarter of fiscal year 1995: None. (c) Exhibits: Index to Exhibits follows. (d) (Not applicable) Index to Exhibits ----------------- (2) (Not applicable) (3) (i) Certificate of Incorporation dated October 22, 1986 (filed as Exhibit (3)(i) to Annual Report on Form 10-K for the year ended June 30, 1987, incorporated herein by this reference) (ii)Bylaws dated November 18, 1992 (restated) (filed as Exhibit 3(ii) to Quarterly Report on Form 10-Q for the quarter ended December 31, 1992, incorporated herein by this reference) (4) (i) Form of Indenture between the Company and Wachovia Bank & Trust Company, N.A. as Trustee, regarding $200,000,000 in 8.8% Notes due 2001 (filed as Exhibit 4 to Registration Statement on Form S-3 No. 33-4083 dated May 24, 1991, incorporated herein by this reference) (ii)Prospectus Supplement (to Prospectus dated July 9, 1991) giving terms of the Indenture referenced in Exhibit 4 (i) above (filed on July 18, 1991, supplementing the Registration Statement on Form S-3 No. 33-4083 dated May 24, 1991, and incorporated herein by this reference) (9) (Not applicable) (10) Material contracts: (i) Stock Option Plan (1977) (Amended l0/l6/80, 7/2l/82, 6/2l/83, l0/l9/83, 9/18/85, 11/20/85, 7/15/87 and 11/17/93) (Exhibit 10(i) to Annual Report on Form 10-K for the year ended June 30, 1994, incorporated herein by this reference) (ii)Long-Term Compensation Program dated October 21, 1987 (filed as Exhibit 10(ii) to Annual Report on Form 10-K for the year ended June 30, 1994, incorporated herein by this reference) (iii)Agreement between Henkel KGaA and the Company dated June l8, l98l (filed as Exhibit (l0)(v) to Form 8 dated August ll, l983, incorporated herein by this reference) (iv)Agreement between Henkel GmbH (now Henkel KGaA) and the Company dated July 3l, l974 (filed as Exhibit (l0) (vi) to Form 8 dated August ll, l983, incorporated herein by this reference) (v) Agreement between Henkel KGaA and the Company dated November l6, l98l (filed as Exhibit (l0)(vii) to Form 8 dated August ll, l983, incorporated herein by this reference) (vi)Agreement between Henkel KGaA and the Company dated July 16, 1986 (filed as Exhibit B to Current Report on Form 8-K for March 19, 1987, incorporated herein by this reference) (vii)Agreement between Henkel KGaA and the Company dated March 18, 1987 (filed as Exhibit A to Current Report on Form 8-K for March 19, 1987, incorporated herein by this reference) (viii)Agreement between Henkel KGaA and the Company dated January 16, 1992 (filed as Exhibit 10(xi) to Annual Report on Form 10-K for the year ended June 30, 1992, incorporated herein by this reference) (ix)Officer Employment Contract (form) (filed as Exhibit 10(ix) to Annual Report on Form 10-K for the year ended June 30, 1994, incorporated herein by this reference) (x) Supplemental Executive Retirement Plan dated July 17, 1991 (filed as Exhibit 10(x) to Annual Report on Form 10-K for the year ended June 30, 1993, incorporated herein by this reference) (xi)1993 Directors' Stock Option Plan dated November 17, 1993 (filed as Exhibit 10(xi) to Annual Report on Form 10-K for the year ended June 30, 1994, incorporated herein by this reference) (11) (Not applicable) (12) (Not applicable) (13) Annual Report, following the Financial Statement Schedules of this Form 10-K (16) (Not applicable) (l8) (Not applicable) (21) Subsidiaries of the registrant, following Exhibit 13 of this Form 10-K (22) (Not applicable) (23) Independent Auditors' Consent, following Exhibit 21 of this Form 10-K (24) (Not applicable) (26) (Not applicable) (27) Financial Data Schedule, following Exhibit 23 of this Form 10-K (28) (Not applicable)
SIGNATURES Pursuant to the requirements of Section l3 or l5(d) of the Securities Exchange Act of l934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. THE CLOROX COMPANY Date: September 20, 1995 By: /s/G. C. Sullivan ----------------- G. C. Sullivan, Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of l934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date /s/G.C. Sullivan Chairman of the Board & Director September 20, 1995 - --------------------- (Chief Executive Officer) G. C. Sullivan /s/W. F. Ausfahl Group Vice President & Director September 20, 1995 - --------------------- (Principal Financial Officer) /s/D. Boggan, Jr. Director September 20, 1995 - --------------------- D. Boggan, Jr. /s/J. W. Collins Director September 20, 1995 - --------------------- J. W. Collins /s/U. Fairchild Director September 20, 1995 - --------------------- U. Fairchild (signatures continue) /s/J. Krautter Director September 20, 1995 - --------------------- J. Krautter /s/J. Manchot Director September 20 1995 - --------------------- J. Manchot /s/D. O. Morton Director September 20, 1995 - --------------------- D. O. Morton /s/E. L. Scarff Director September 20, 1995 - --------------------- E. L. Scarff /s/L. R. Scott Director September 20, 1995 - --------------------- L. R. Scott /s/F. N. Shumway Director September 20, 1995 - --------------------- F. N. Shumway /s/J. A. Vohs Director September 20, 1995 - --------------------- J. A. Vohs /s/C. A. Wolfe Director September 20, 1995 - --------------------- C. A. Wolfe /s/H. J. Salvo, Jr. Vice President-Controller September 20, 1995 - --------------------- (Principal Accounting Officer) H. J. Salvo, Jr.
APPENDIX (to Form 10-K) The following items have been filed under cover of Form SE: 1. Middle of Page 18 - Bar Chart entitled "Clorox Value Measure", showing the economic value measurement of the Company over the period of the last five fiscal years. 2. Middle of Page 19 - Bar Chart entitled "Cash Provided, Continuing Operations." EX-13 2 APPLICABLE SECTIONS OF ANNUAL REPORT MANAGEMENT'S DISCUSSION AND ANALYSIS Results of Operations Continuing operations again achieved record unit volume in 1995, after record years in 1994 and 1993. The gain in 1995 volume was principally due to a full year's ownership of the S.O.S business, which was acquired in mid 1994, growth in the Brita water filtration business in the United States, and record volumes for Combat insecticides, Clorox liquid bleach, Clorox Clean-Up dilutable cleaner, Tilex soap scum remover, Clorox toilet bowl cleaner, professional strength Formula 409 cleaner, Pine-Sol cleaner, and the Kingsford line of charcoal briquets. The increase in unit volume for 1994 was principally due to the S.O.S acquisition, the consolidation of an Argentine subsidiary in which our interest increased to 90 percent in June 1993, and the introduction of new products including Liquid-Plumr buildup remover, Clorox Stain Out soil and stain remover, Clorox toilet bowl cleaners, Tilex soap scum remover, and Hidden Valley Ranch kids' dressings. Net sales increased 8 percent in 1995 following increases of 12 percent in 1994 and 6 percent in 1993. This year's growth was primarily driven by the S.O.S acquisition and the record volumes described above. Price increases on a few established brands were offset by a price decrease on Tilex in 1995 and by a price decrease on Pine-Sol in 1994, and by increased incentive trade promotions in 1995. Cost of products sold was 45 percent of net sales in both 1995 and 1994, and 44 percent in 1993. Research and Development (R&D) expense was up slightly over 1994, after increasing 5 percent over 1993. This was the third consecutive record year for new product introductions and reflects efficiencies achieved in the R&D function that began in 1993 and were realized in 1994 to bring new products to market faster and at lower overall costs. R&D activities are anticipated to continue at current levels as a percent of sales. We expect to continue to shorten development times and further improve cost efficiencies while maintaining a high level of new product activity in 1996. Selling, delivery, and administration (SD&A) expenses increased 16 percent over 1994 and as a percentage of net sales increased by 1.4 percentage points. The increase in 1995 is principally attributable to the strategic growth of our International business where we have increased our overhead infrastructure through acquisitions or through expanding our marketing activities in Latin America, the Caribbean, Canada, the Pacific Rim, and Central Europe. In addition, we incurred transition costs related to the implementation of our new logistics strategy, and our new Customer Interface project that will improve customer service. SD&A increased approximately 10 percent in 1994 over 1993 principally due to the 1994 acquisition of S.O.S, and the consolidation of our Argentine subsidiary. We continue to focus on improving our cost structure and anticipate continued spending during 1996 on our international infrastructure and the Customer Interface initiative. Total marketing spending, which includes trade promotions, consumer promotions and advertising, increased 3 percent over 1994. Media advertising levels increased while sales promotion, primarily couponing, decreased in 1995 versus 1994. Advertising expense increased 18 percent from 1993 to 1994 principally due to heavy introductory spending on new products in 1994. Interest expense, the majority of which relates to long-term financing, increased $6,696,000 in 1995 over 1994 due to additional borrowing in 1995 to finance the acquisition of Brita International Holdings, Inc., expanded International activities financed by local borrowings, and the effect of higher short-term interest rates on commercial paper borrowings. The effective tax rates were 40.6, 41.3, and 39.0 percent in 1995, 1994, and 1993, respectively. The decrease in 1995 was principally due to the effect in 1994 of the retroactive 1 percent increase in the federal statutory tax rate that was reflected in 1994 earnings. The 1995 increase over 1993 was due primarily to the ongoing effect of the higher statutory tax rate. Earnings per share from continuing operations increased $.43 in 1995 over 1994, a 13 percent increase, and $.28 in 1994 over 1993, both of which were driven by the volume growth described above, and shares repurchased in 1995 and 1994 under the share repurchase program. Net earnings per share decreased in 1995 from 1994 due to the inclusion in 1994 of $.59 per share earnings from discontinued operations. Financial Position and Liquidity Cash flow from continuing operations was $290,849,000 in 1995 and resulted from record earnings and our continued focus on efficient utilization of resources driven by the Clorox Value Measure (CVM) economic value measurement system implemented in 1994. CVM was up 26 percent in 1995 over 1994 following two consecutive years of 18 percent growth, versus our average long-term target of 12 percent. The 1995 increase in accounts receivable is attributable to the acquisition of Brita International Holdings, Inc. and other International acquisitions and new ventures. Higher sales of Combat insecticides, Kingsford charcoal, Brita water filtration systems, and our business in the Republic of Korea also contributed to the increase. Higher levels of inventories and accounts payable were principally due to International acquisitions and new ventures. At June 30, 1995, we had available a $350,000,000 credit agreement with a syndication of banks which expires on May 31, 2000. We believe we have access to additional bank credit and the public debt markets should the need arise. During 1995, $97,651,000 was used to invest in new businesses, all of which were outside the United States. The largest single investment was Brita International Holdings, Inc., of Canada. On January 1, 1994, the S.O.S products business was acquired for $116,488,000. Also, during 1994, additional foreign investments of $25,949,000 were made. In 1993, we acquired a controlling interest in our joint venture in Argentina that was previously accounted for on the equity basis and as of June 30, 1993 was consolidated. Capital expenditures were $62,911,000, $56,627,000, and $77,637,000 in 1995, 1994, and 1993, respectively. Spending generally has been for expanded capacity, process improvements, and environmental programs and initiatives. Dividends paid in 1995 were $102,272,000, or $1.92 per share. In July 1995, we announced a 10.4 percent increase in the quarterly dividend rate to $.53, from $.48 per share for a new annual rate of $2.12 per share. In 1995, 1994, and 1993, cash flow from operations has exceeded cash needs for capital expenditures, dividends, and scheduled debt service. We anticipate similar strong cash flow again in 1996. Proceeds from the sale of discontinued operations generated cash of $159,293,000 in 1994. We recently completed the stock repurchase program initiated in 1989. Through June 30, 1995, 5,000,000 shares were repurchased, of which 1,325,485 shares at a cost of $78,270,000 were acquired during 1995. In July 1995, our Board of Directors authorized an additional $100,000,000 for a share repurchase program planned to be completed during 1996. These shares will be purchased on the open market. Reacquired shares are held as treasury shares and are available for reissuance for corporate uses. In order to manage the impact of interest rate movements on interest expense and interest income, we have approved the use of interest rate derivative instruments, such as interest rate swaps. These instruments have the effect of converting fixed rate interest to floating, or floating to fixed. Conditions under which derivatives can be used are set forth in a Company Policy Statement, and include a restriction on the amount of such activity to a designated portion of existing debt, a limit on the term of any derivative transaction, and a specific prohibition of the use of any leveraged instrument. Other derivative instruments used to hedge assets and anticipated transactions include foreign currency contracts. These contracts were not material in either 1995 or 1994. We are committed to an ongoing program of comprehensive, long-term environmental assessment of our facilities. This program is implemented by the Company's Department of Health, Safety and Environment, with guidance from legal counsel. During each facility assessment, compliance with applicable environmental laws and regulations is evaluated and the facility is reviewed in an effort to identify possible future environmental liabilities. Although not material, at June 30, 1995 and 1994, expected costs have been accrued for the probable future costs of environmental liabilities without offset for expected insurance recoveries, or discounting for present value.
Statements of Consolidated Earnings The Clorox Company Years ended June 30 95 94 93 In thousands, except per-share amounts. Net Sales $ 1,984,170 $ 1,836,949 $ 1,634,171 - ----------------------------------------------------------------- - -------------------------------------------------- Costs and Expenses Cost of products sold 892,172 820,434 724,753 Selling, delivery and administration 416,392 359,360 328,088 Advertising 271,730 286,666 242,528 Research and development 44,819 44,558 42,445 Interest expense 25,120 18,424 18,856 Other (income) expense, net (3,957) 874 2,316 - ----------------------------------------------------------------- - -------------------------------------------------- Total costs and expenses 1,646,276 1,530,316 1,358,986 - ----------------------------------------------------------------- - -------------------------------------------------- Earnings Before Income Taxes 337,894 306,633 275,185 Income Taxes 137,062 126,640 107,267 - ----------------------------------------------------------------- - -------------------------------------------------- Earnings from Continuing Operations 200,832 179,993 167,918 Earnings (Losses) from Discontinued Operations - 32,064 (867) - ----------------------------------------------------------------- - -------------------------------------------------- Net Earnings $ 200,832 $ 212,057 $ 167,051 ================================================================= ================================================== Earnings (Losses) per Common Share Continuing Operations $ 3.78 $ 3.35 $ 3.07 Discontinued Operations - 0.59 (0.02) - ----------------------------------------------------------------- - -------------------------------------------------- Net Earnings $ 3.78 $ 3.94 $ 3.05 ================================================================= ================================================== Weighted Average Shares Outstanding 53,147 53,800 54,698 See Notes to Consolidated Financial Statements.
Assets Current Assets Cash and short-term investments $ 137,330 $ 115,922 Accounts receivable, less allowance 311,868 249,843 Inventories 121,095 105,948 Deferred income taxes 11,495 18,548 Prepaid expenses 18,543 14,014 - ----------------------------------------------------------------- - ---------------------------------- Total current assets 600,331 504,275 - ----------------------------------------------------------------- - ---------------------------------- Property, Plant and Equipment - Net 524,972 532,600 - ----------------------------------------------------------------- - ---------------------------------- Brands, Trademarks, Patents and Other Intangibles - Net 592,792 520,042 - ----------------------------------------------------------------- - ---------------------------------- Investments in Affiliates 96,385 83,368 - ----------------------------------------------------------------- - ---------------------------------- Other Assets 92,192 57,284 - ----------------------------------------------------------------- - ---------------------------------- Total $1,906,672 $1,697,569 ================================================================= ================================== Liabilities and Stockholders' Equity Current Liabilities Accounts payable $ 122,763 $ 97,728 Accrued liabilities 234,595 227,197 Income taxes payable 6,283 7,599 Commercial paper 115,303 42,916 Current maturities of long-term debt 379 392 - ----------------------------------------------------------------- - ---------------------------------- Total current liabilities 479,323 375,832 - ----------------------------------------------------------------- - ---------------------------------- Long-term Debt 253,079 216,088 - ----------------------------------------------------------------- - ---------------------------------- Other Obligations 85,129 63,187 - ----------------------------------------------------------------- - ---------------------------------- Deferred Income Taxes 145,228 133,045 - ----------------------------------------------------------------- - ---------------------------------- Stockholders' Equity Common stock - authorized, 175,000,000 shares, $1 par value 55,422 55,422 Additional paid-in capital 108,347 106,554 Retained earnings 971,380 876,832 Treasury shares, at cost (168,217) (107,146) Cumulative translation adjustments and other (23,019) (22,245) - ----------------------------------------------------------------- - ---------------------------------- Stockholders' equity 943,913 909,417 - ----------------------------------------------------------------- - ---------------------------------- Total $1,906,672 $1,697,569 ================================================================= ================================== See Notes to Consolidated Financial Statements.
Statements of Consolidated Stockholders' Equity The Clorox Company Cumulative In thousands, except share Common Stock Additional Treasury Shares Translation In thousands, except shares --------------- Paid-in Retained ------------------ Adjustments and per-share amounts Shares Amount Capital Earnings Shares Amount and Other Balance, June 30, 1992 55,422,297 $55,422 $ 105,249 $ 690,018 (877,204) $ (35,025) $ (1,923) Net earnings 167,051 Dividends ($1.71 per share) (93,509) Employee stock plans and other 234 (1,398) 305,049 11,668 Translation adjustments (18,493) - ----------------------------------------------------------------- - -------------------------------------------------------- Balance, June 30, 1993 55,422,297 55,422 105,483 762,162 (572,155) (23,357) (20,416) Net earnings 212,057 Dividends ($1.80 per share) (97,095) Employee stock plans and other 1,071 (292) 405,414 16,121 Treasury stock acquired (1,883,300) (99,910) Translation adjustments (1,829) - ----------------------------------------------------------------- - -------------------------------------------------------- Balance, June 30, 1994 55,422,297 55,422 106,554 876,832 (2,050,041) (107,146) (22,245) Net earnings 200,832 Dividends ($1.92 per share) (102,272) Employee stock plans and other 1,793 (4,012) 355,211 17,199 (1,187) Treasury stock acquired (1,325,485) (78,270) Translation adjustments 413 - ----------------------------------------------------------------- - -------------------------------------------------------- Balance, June 30, 1995 55,422,297 $55,422 $ 108,347 $ 971,380 (3,020,315) $(168,217) $(23,019) ================================================================= ======================================================== See Notes to Consolidated Financial Statements.
Statements of Consolidated Cash Flows The Clorox Company Years ended June 30 95 94 93 In thousands. Operations: Earnings from continuing operations $ 200,832 $ 179,993 $ 167,918 Adjustments to reconcile to net cash provided by continuing operations: Depreciation and amortization 103,866 94,120 83,607 Deferred income taxes 15,386 15,985 32,378 Other 7,498 25,985 9,412 Effects of changes in: Accounts receivable (58,314) (18,299) (36,266) Inventories (11,723) 5,691 (7,892) Prepaid expenses (1,892) 2,355 (2,850) Accounts payable 21,771 13,485 (18,071) Accrued liabilities 15,630 (8,134) 2,849 Income taxes payable (2,205) (12,741) 3,498 - ----------------------------------------------------------------- - ------------------------------------------- Net cash provided by continuing operations 290,849 298,440 234,583 Net cash (used for) provided by discontinued operations - (31,658) 10,877 - ----------------------------------------------------------------- - ------------------------------------------- Net cash provided by operations 290,849 266,782 245,460 Investing Activities: Property, plant and equipment (62,911) (56,627) (77,637) Net proceeds from sales of businesses - 159,293 15,000 Businesses purchased (97,651) (142,437) (31,547) Disposal of property, plant and equipment 8,707 11,264 3,759 Other (54,437) (22,046) (24,938) - ----------------------------------------------------------------- - ------------------------------------------- Net cash used for investment (206,292) (50,553) (115,363) - ----------------------------------------------------------------- - ------------------------------------------- Financing Activities: Long-term borrowings 47,298 13,000 299 Long-term debt repayments (2,806) (741) (1,236) Short-term borrowings (repayments), net 62,115 3,430 (42,469) Cash dividends (102,272) (97,095) (93,509) Treasury stock acquired (78,270) (99,910) - Employee stock plans 10,786 9,845 8,958 - ----------------------------------------------------------------- - ------------------------------------------- Net cash used for financing (63,149) (171,471) (127,957) - ----------------------------------------------------------------- - ------------------------------------------- Net increase in cash and short-term investments 21,408 44,758 2,140 Cash and short-term investments: Beginning of year 115,922 71,164 69,024 - ----------------------------------------------------------------- - ------------------------------------------- End of year $ 137,330 $ 115,922 $ 71,164 ================================================================= =========================================== Cash paid for: Interest (net of amounts capitalized) $ 25,479 $ 18,267 $ 18,616 Income taxes 106,821 128,210 61,052 Noncash transactions: Liabilities arising from business purchased $ 25,047 $ 7,200 $ - See Notes to Consolidated Financial Statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1 Significant Accounting Policies Principles of Consolidation The Company is principally engaged in the production and marketing of nondurable consumer products to grocery stores and other retail outlets. The consolidated financial statements include the statements of the Company and its majority-owned subsidiaries. All significant intercompany transactions and accounts are eliminated in consolidation. Short-term Investments Short-term investments consist of money market and other high quality instruments with an initial maturity of three months or less and are stated at cost which approximates market value. Inventories Inventories are stated at the lower of cost or market. Cost of the majority of inventories is determined on the last-in, first-out (LIFO) method. Cost for the remainder of the inventories is determined generally on the first-in, first-out (FIFO) method. Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is calculated by the straight-line method over the estimated useful lives of the depreciable assets. Brands, Trademarks, Patents and Other Intangibles Brands, trademarks, patents and other intangible assets arising from transactions after October 30, 1970 are amortized over their estimated useful lives up to a maximum of 40 years. Carrying values are reviewed periodically and a determination of impairment is made based on estimates of future cash flows, undiscounted and without interest charges. Investments in Affiliates The Company holds minority investments in foreign entities which are accounted for under the equity method. The most significant investment is a 20 percent equity ownership in Henkel Iberica, S.A. of Spain. Income Taxes The Company uses the liability method to account for income taxes, in accordance with Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes". Foreign Currency Translation Foreign currency assets and liabilities are translated using the exchange rates in effect at the balance sheet date. Income and expenses are translated at the average exchange rates during the year. Translation gains and losses are reported in stockholders' equity; transaction gains and losses are included in net earnings. Earnings per Common Share Earnings per common share are computed by dividing net earnings by the weighted average number of common shares outstanding during each year. The potential dilution from the exercise of stock options is not material. Major Customer Sales to the Company's largest customer, Wal-Mart Stores, Inc. and affiliates, were 13% and 12% of consolidated net sales in 1995 and 1994, respectively. Derivative Financial Instruments The use of financial instruments is limited to purposes other than trading and includes management of interest rate movements (interest rate swaps), and foreign currency exposure (forward contracts) related to supply contracts and accounts receivable. Both categories of financial instruments are treated as off-balance sheet financial instruments. Gains or losses on hedges of existing assets are included in the carrying amounts and are recognized in earnings when those assets are liquidated. Gains or losses arising from hedges of firm commitments and anticipated transactions are deferred and recognized in earnings or as an adjustment of carrying amounts when the hedged transaction occurs. 2 Discontinued Operations
The Company sold its bottled water and frozen foods businesses during 1994 for $159,293,000. The sale of these businesses resulted in a net gain of $31,430,000. In June 1993, the Company sold its Prince Castle business which did not result in a material gain or loss. Results of discontinued operations are classified separately in the Statements of Consolidated Earnings and include (in thousands): 94 93 Net sales $ 18,700 $ 173,291 ================================================================= ======================== Earnings (losses) from operations before income taxes $ 1,043 $ (1,437) Income tax (expense) benefits (409) 570 - ----------------------------------------------------------------- - ------------------------- Net earnings (losses) from discontinued operations 634 (867) - ----------------------------------------------------------------- - ------------------------- Gain on sale of businesses 42,177 - Income taxes 10,747 - - ----------------------------------------------------------------- - ------------------------- Net gain on sale of businesses 31,430 - - ----------------------------------------------------------------- - ------------------------- Earnings (losses) from discontinued operations $ 32,064 $ (867)
3 Acquisitions Acquisitions in 1995, totaling $97,651,000, were funded from cash and other obligations and included Brita International Holdings, Inc., a Canadian-based manufacturer and marketer of Brita water filtration systems, and eight foreign investments, all of which were accounted for as purchases. Approximately $96,337,000 of the acquisition cost has been allocated to brands, trademarks and other intangibles to be amortized over estimated lives up to 40 years. Such purchases also included at fair value, assets of $26,361,000, and the assumption of liabilities of $25,047,000. On January 31, 1994, the Company acquired the S.O.S products business of Miles Inc., which was accounted for as a purchase. The $116,488,000 acquisition included the S.O.S brand of soap pads and other cleaning products in the United States and Canada, manufacturing facilities, and certain items of working capital. Approximately $98,850,000 of the purchase price has been allocated to brands, trademarks and other intangibles to be amortized over an estimated life of 40 years. The purchase included, at fair value, current assets of $9,200,000; property, plant and equipment of $15,600,000; the assumption of current liabilities of $5,300,000, and a postretirement health-care liability of $1,900,000. The acquisition was funded from cash and short-term borrowings. Results of operations after the S.O.S acquisition date are included in the 1994 Statement of Consolidated Earnings. The following pro forma information has been prepared assuming that this acquisition had taken place at the beginning of the respective periods. The pro forma information includes adjustments for interest expense that would have been incurred to finance the purchase, additional depreciation based on the fair market value of the property, plant, and equipment acquired and the amortization of intangibles arising from the transaction. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed dates.
Year ended June 30 94 93 In thousands, except per share amounts (unaudited) Net sales $ 1,884,362 $ 1,722,845 Earnings from continuing operations $ 177,070 $ 169,991 Net earnings $ 209,134 $ 169,124 Earnings per common share from continuing operations $ 3.29 $ 3.11 Net earnings per common share $ 3.89 $ 3.09
In addition, 1994 acquisitions included various foreign investments of $25,949,000. During 1993, the Company purchased an additional 39 percent interest in its joint venture in Argentina bringing total ownership to 90 percent. 4 Inventories The major classes are (in thousands): 95 94 Finished goods and work in process $ 71,102 $ 69,280 Raw materials and supplies 49,993 36,668 - ---------------------------------------------------------- Total $121,095 $105,948 ========================================================== Had the cost of inventories been determined using the FIFO method, inventories would have been higher by approximately $14,218,000 at June 30, 1995 and $14,843,000 at June 30, 1994. The LIFO method was used to value 74 percent of the inventory at June 30, 1995 and 85 percent at June 30, 1994. 5 Property, Plant and Equipment The major classes are (in thousands): 95 94 Land and improvements $ 60,083 $ 59,005 Buildings 263,509 261,964 Machinery and equipment 534,660 495,903 Construction in progress 31,622 33,650 - --------------------------------------------------------- Total 889,874 850,522 Less accumulated depreciation 364,902 317,922 - --------------------------------------------------------- Net $524,972 $532,600 ========================================================= Depreciation expense was $66,886,000 in 1995, $61,660,000 in 1994 and $51,532,000 in 1993. 6 Brands, Trademarks, Patents and Other Intangibles - Net The major classes are (in thousands): 95 94 Brands and trademarks $ 583,902 $ 484,574 Patents and other intangibles 129,076 129,076 Accumulated amortization (120,186) (93,608) - ---------------------------------------------------------- Net $ 592,792 $ 520,042 Brands and trademarks includes $41,708,000 of continuing value arising from transactions prior to October 31, 1970. 7 Accrued Liabilities Advertising costs included in accrued liabilities at June 30, 1995 and 1994 were $126,268,000 and $126,725,000, respectively. 8 Long-term Debt The principal components are (in thousands): 95 94 8.8% Non-callable notes due August 1, 2001, includes net unamortized premium of $208 and $243, respectively $200,208 $200,243 Other debt 53,250 16,237 - -------------------------------------------------------------- 253,458 216,480 Less: current maturities 379 392 - -------------------------------------------------------------- Long-term debt $253,079 $216,088 Fair values of the 8.8 percent notes at June 30, 1995 and 1994 were approximately $222,500,000 and $212,250,000, respectively, based upon quoted market prices for similar debt. The Company has a $350,000,000 credit agreement with a syndication of banks which expires on May 31, 2000. The credit agreement requires maintenance of a minimum net worth of $704,000,000. At June 30, 1995, the credit agreement is available for general corporate purposes and for the support of additional commercial paper issuance. 9 Financial Instruments In order to manage the impact of interest rate movements, the Company has entered into interest rate swap agreements. The transactions effectively convert a portion of the Company's interest rate exposure on its 8.8 percent fixed rate non-callable notes to a floating rate. The effect of the swap agreements on the 8.8 percent fixed rate notes reduced interest expense by $573,000 and $1,803,000, and resulted in effective borrowing rates of 8.5 percent and 7.9 percent in years 1995 and 1994, respectively. Under the terms of these agreements, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts as calculated by reference to agreed notional principal amounts. LIBOR is used as the variable rate index for calculation. Exposure to counterparty credit risk has been minimized by entering into these agreements only with major financial institutions that are expected to fully perform under the terms of the swap agreements. The fair value of these instruments, shown at the top of the next column, was determined based upon market prices for similar instruments. Notional amounts outstanding and weighted average rates at June 30 are (in thousands): 95 94 Received fixed/pay floating - notional amounts $100,000 $100,000 Weighted average receive rate 6.6% 6.6% Weighted average pay rate 6.6% 3.9% Pay fixed/received floating - notional amounts $ 50,000 $ - Weighted average pay rate 6.3% - Weighted average receive rate 6.6% - Fair value of interest rate swaps (unrealized loss) $ (3,539) $ (8,422) At June 30, 1995 the Company had four outstanding interest rate swap agreements under which fixed rates are received and two interest rate swap agreements under which fixed rates are paid. At June 30, 1994, the Company had four outstanding interest rate swap agreements under which fixed rates were received. Original terms to maturity ranged from 7 3/4 to 8 1/2 years where fixed rates are received and at June 30, 1995 the remaining term for these agreements was approximately 6 years. Original terms to maturity where fixed rates are paid were 1 3/4 to 2 years and at June 30, 1995 the remaining term for these agreements was approximately 1 3/4 years. Foreign currency forward contracts are used periodically to manage foreign exchange risks associated with export sales and purchases from foreign suppliers denominated in foreign currency. At June 30, 1995, outstanding foreign currency forward contracts to hedge purchases denominated in Canadian dollars were approximately $17,937,000 and had fair values based upon quoted market prices of approximately $18,363,000 with an unrealized gain of approximately $426,000. 10 Stockholders' Equity
Outstanding at June 30, 1993 1,884,923 $13.69 - $43.75 Granted 907,768 51.13 - 63.50 Exercised (296,849) 13.69 - 43.75 Cancelled (137,722) 20.00 - 52.94 - ----------------------------------------------------------------- - -------------------------- Outstanding at June 30, 1994 2,358,120 13.81 - 63.50 Granted 386,897 48.88 - 57.20 Exercised (330,140) 13.81 - 54.63 Cancelled (35,114) 40.50 - 52.94 - ----------------------------------------------------------------- - -------------------------- Outstanding (held by 203 optionees) at June 30, 1995 2,379,763 $20.00 - $63.50 ================================================================= ========================== Options exercisable at: June 30, 1995 1,328,838 June 30, 1994 1,163,598
11 Leases The Company leases transportation equipment and a limited number of its manufacturing, warehousing and office facilities. Most leases are classified as operating leases and will expire over the next five years. Future minimum lease payments are $8,532,000, and do not exceed $4,300,000 in any one year. Rental expense for continuing operations was $11,424,000 in 1995, $11,875,000 in 1994 and $14,365,000 in 1993. Space not occupied by the Company in its headquarters building is let to other tenants under operating leases expiring through 1998. Future minimum rentals to be received are $2,312,000 and do not exceed $1,500,000 in any one year. 12 Other Expense (Income), Net
The major components are (in thousands): 95 94 93 Amortization of intangibles $ 26,582 $ 23,896 $ 22,058 Equity in earnings of affiliates (4,441) (5,926) (9,979) Interest income (7,796) (5,292) (2,931) Royalty income (7,110) (8,850) (7,361) Other, net (11,192) (2,954) 529 - ----------------------------------------------------------------- - ----------------------------- Total $ (3,957) $ 874 $ 2,316 ================================================================= =============================
13 Income Taxes
Income tax expenses are (in thousands): 95 94 93 Current Federal $ 96,444 $ 86,686 $ 57,776 State 19,778 17,562 13,815 Foreign 5,454 3,569 3,651 - ----------------------------------------------------------------- - --------------------------- Total current 121,676 107,817 75,242 - ----------------------------------------------------------------- - --------------------------- Deferred Federal 12,232 16,416 26,635 State 688 1,173 4,147 Foreign 2,466 1,234 1,243 - ----------------------------------------------------------------- - --------------------------- Total deferred 15,386 18,823 32,025 - ----------------------------------------------------------------- - --------------------------- Total expense $137,062 $126,640 $107,267 ================================================================= =========================== Effective income tax rate 40.6% 41.3% 39.0%
The reconciliation between the Company's effective income tax rate and the statutory federal income tax rate is as follows: 95 94 93 Federal statutory rate 35.0% 35.0% 34.0% State income taxes, net of federal tax benefit 3.9 3.9 4.2 Taxes on foreign earnings 1.5 1.1 1.2 Retroactive effect of federal rate increase - 1.0 - Other 0.2 0.3 (0.4) - ----------------------------------------------------------------- - ------------------------ Effective income tax rate 40.6% 41.3% 39.0% ================================================================= ========================
The net deferred income tax liabilities (assets), both current and non-current at June 30, result from the tax effects of the following temporary differences (in thousands): 95 94 Amortization/depreciation $ 52,515 $ 64,268 Safe harbor lease agreements 29,401 32,145 Unremitted foreign earnings 45,473 35,057 Restructuring expense (3,676) (12,812) Post employment benefits (17,712) (19,873) Other 27,732 15,712 - ------------------------------------------------------------- Net $133,733 $114,497 14 Employee Benefit Plans Retirement Income Plans The Company has defined benefit pension plans for substantially all its domestic employees. Benefits are based on either employee years of service and compensation or stated dollar amount per year of service. The Company is the sole contributor to the plans, in amounts deemed necessary to provide benefits, and to the extent deductible for federal income tax purposes. Assets of the plans consist primarily of stocks and bonds. The components of pension expense are (in thousands): 95 94 93 Service cost - benefits earned in current year $ 6,944 $ 5,970 $ 5,646 Interest on projected benefit obligation 8,913 7,753 6,552 Return on plan assets: Actual gain (19,347) (2,762) (9,750) Deferral of the actual gain in excess of (less than) the assumed rate of 8% 9,702 (6,029 1,766 Other gains, including amortization over 15 years of the net pension transition asset at July 1, 1985 (701) (790) (1,245) - -------------------------------------------------------------- Total pension expense $ 5,511 $ 4,142 $ 2,969 The plan's funded status at June 30 is as follows (in thousands): 95 94 Actuarial present value of the accumulated benefit obligation, including vested benefits of $95,410 in 1995 and $84,027 in 1994 $101,580 $ 89,531 ============================================================= Plans' assets at market value 141,385 119,100 Projected benefit obligation, determined using a discount rate of 8% and including the effect of an assumed annual increase in future compensation levels of 4.5% in 1995 and 1994 124,119 111,846 - ------------------------------------------------------------- Excess of plans' assets over pension obligation 17,266 7,254 Less deferrals: Remaining unamortized balance of net pension transition asset at July 1, 1985 (8,691) (10,338) Prior service cost 4,734 5,748 Other net losses 6,072 14,330 - -------------------------------------------------------------- Accrued pension asset included in other assets $ 19,381 $ 16,994 The Company has defined contribution plans for most of its domestic employees not covered by collective bargaining agreements, to which it contributes based on its earnings or participants' contributions. The Company also participates in multi-employer pension plans for certain of its hourly-paid production employees and contributes to those plans based on collective bargaining agreements. The aggregate cost of the defined contribution and multi-employer pension plans was $12,427,000 in 1995, $12,753,000 in 1994 and 11,570,000 in 1993. Retirement Health Care The Company provides certain health care benefits for employees who meet age, participation and length of service requirements at retirement. The plans pay stated percentages of covered expenses after annual deductibles have been met. Benefits paid take into consideration payments by Medicare. The plans are not prefunded and the Company has the right to modify or terminate certain of these plans. Postretirement health care expense consists of the following (in thousands): 95 94 93 Service cost - benefits earned in the current year $2,643 $2,823 $2,898 Interest on projected benefit obligation 3,041 2,881 2,749 - ------------------------------------------------------------ Total postretirement health care expense $5,684 $5,704 $5,647 ============================================================ Benefits paid were $1,191,000, $1,058,000 and $1,060,000 in fiscal years 1995, 1994 and 1993, respectively. The accumulated postretirement benefit obligation (APBO) includes the following at June 30 (in thousands): 95 94 Retirees $12,086 $10,260 Active employees 31,109 28,707 Deferral of net gains 5,425 6,599 - ----------------------------------------------------- Total unfunded accrued benefit obligation included in other obligations $48,620 $45,566 The assumed health care cost trend rate used in measuring the APBO was 11.3 percent for 1995, gradually declining to 5.5 percent over the next nine years. Changes in these rates can have a significant effect on amounts reported. A one percentage point increase in the trend rates would increase the June 30, 1995 accumulated postretirement benefit obligation by $6,958,000 and increase 1995 expense by $1,360,000. The discount rate used to determine the APBO was 8 percent. Discontinued Operations As a result of the Company's decision to discontinue operations of its bottled water and frozen foods businesses, a curtailment gain of $2,104,000 for pension benefits and $1,228,000 for retirement health-care was recognized in 1994. 15 Contingent Liabilities The Company is subject to various lawsuits and claims arising out of its businesses which include contracts, environmental issues, product liability, patent and trademark matters, and taxes. In the opinion of management, after consultation with counsel, the disposition of these matters will not have a material adverse effect, individually or in the aggregate, on the Company's financial position, results of operations, or liquidity. Responsibility for Consolidated Financial Statements The management of the Company is responsible for the integrity and objectivity of the financial statements included in this Annual Report. In fulfilling this responsibility, management maintains an effective system of internal accounting controls and supports a comprehensive internal audit program. The Board of Directors has an Audit Committee consisting of independent directors. The Audit Committee meets regularly with management, internal auditors and Deloitte & Touche LLP, independent certified public accountants. Deloitte & Touche LLP and the internal auditors have full authority to meet with the Audit Committee, either with or without management representatives present. Deloitte & Touche LLP have completed their audit of the accompanying consolidated financial statements. Their report appears below. Independent Auditors' Report [DELOITTE & TOUCHE LOGO] The Stockholders and Board of Directors of The Clorox Company: We have audited the accompanying consolidated balance sheets of The Clorox Company and its subsidiaries (the companies) as of June 30, 1995 and 1994, and the related statements of consolidated earnings, consolidated stockholders' equity and consolidated cash flows for the years ended June 30, 1995, 1994, and 1993. These financial statements are the responsibility of the companies' management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the companies at June 30, 1995 and 1994, and the results of their operations and their cash flows for the years ended June 30, 1995, 1994 and 1993 in conformity with generally accepted accounting principles. /s/ Deloitte & Touche LLP Deloitte & Touche LLP Oakland, California August 9, 1995
Financial Summary The Clorox Company Years ended June 30 95 94 93 92 91 90 89 88 87 86 In thousands, except per-share data. Operations Net sales $1,984,170 $1,836,949 $1,634,171 $1,547,057 $1,468,370 $1,309,019 $1,199,293 $1,033,747 $ 934,985 $ 893,699 - ----------------------------------------------------------------- - --------------------------------------------------------- Percent change 8.0 12.4 5.6 5.4 12.2 9.1 16.0 10.6 4.6 2.4 Cost of products sold 892,172 820,434 724,753 678,504 672,405 601,322 548,434 450,527 422,149 415,542 Operating expenses 732,941 690,584 613,061 612,074 677,468(d) 498,084 458,085 396,910 356,065 326,531 Other 21,163 19,298 21,172 17,382 21,315 (30,755) (28,189) (10,897) (17,588) (5,356) - ----------------------------------------------------------------- - --------------------------------------------------------- Total costs and expenses 1,646,276 1,530,316 1,358,986 1,307,960 1,371,188 1,068,651 978,330 836,540 760,626 736,717 - ----------------------------------------------------------------- - --------------------------------------------------------- Earnings before income taxes 337,894 306,633 275,185 239,097 97,182 240,368 220,963 197,207 174,359 156,982 Income taxes 137,062 126,640 107,267 97,903 37,361 87,456 79,718 73,460 75,394 70,389 - ----------------------------------------------------------------- - --------------------------------------------------------- Earnings from continuing operations 200,832 179,993 167,918 141,194 59,821 152,912 141,245 123,747 98,965 86,593 Earnings (losses) from discon- tinued operations - 32,064(a) (867) (23,429)(b) (7,075) 714 (17,101)(e) 8,823 5,934 9,017 Cumulative effect of accounting change - - - (19,061)(c) - - - - - - - ----------------------------------------------------------------- - --------------------------------------------------------- Net earnings $ 200,832 $ 212,057 $ 167,051 $ 98,704 $ 52,746 $ 153,626 $ 124,144 $ 132,570 $ 104,899 $ 95,610 ================================================================= ========================================================= Percent change, continuing operations 11.6 7.2 18.9 136.0 (60.9) 8.3 14.1 25.0 14.3 8.4 Common Stock Weighted average shares outstanding(f) 53,147 53,800 54,698 54,366 54,063 54,873 55,333 55,127 54,652 54,268 Earnings (losses) per common share: Earnings from continuing operations $3.78 $3.35 $3.07 $2.60 $1.11(d) $2.79 $2.55 $2.26 $1.82 $1.60 Earnings (losses) from discontinued operations - 0.59(a) (0.02) (0.43)(b) (0.13) 0.01 (0.31)(e) 0.16 0.11 0.17 Cumulative effect of accounting change - - - (0.35)(c) - - - - - - Net earnings $3.78 $3.94 $3.05 $1.82 $0.98 $2.80 $2.24 $2.42 $1.93 $1.77 ================================================================= ========================================================== Dividends $1.92 $1.80 $1.71 $1.59 $1.47 $1.29 $1.09 $0.92 $0.79 $0.70 Stockholders' equity at end of year (per share) 18.01 17.04 16.03 14.92 14.47 15.00 14.19 13.19 11.51 10.31 Other Data Continuing operations Working capital (defic- iency) $ 121,008 $ 128,443 $ 160,208 $ (25,322)$ 115,626 $ 151,602 $ 265,569 $ 145,780 $ 225,596 $ 198,290 Property, plant and equipment - net 524,972 532,600 538,101 508,629 441,794 441,681 348,526 312,068 207,712 193,503 Property additions 62,911 56,627 72,141 114,353 89,009 134,099 66,551 135,702 48,630 59,408 Long-term debt 253,079 216,088 204,000 203,627 405,341 5,807 5,192 20,739 24,513 33,626 Percent return on net sales 10.1 9.8 10.3 9.1 4.1 11.7 11.8 12.0 10.6 9.7 Current ratio 1.3 1.3 1.4 0.9 1.3 1.7 1.9 1.5 2.3 2.2 Total assets 1,906,672 1,697,569 1,649,230 1,589,993 1,656,872 1,124,147 1,189,894 1,121,232 911,097 825,748 Stockholders' equity 943,913 909,417 879,294 813,741 784,276 810,514 786,176 712,854 616,447 549,793 Percent return on average stockholders' equity 21.7 24.2 19.8 12.3 6.4 19.1 16.4 19.9 18.0 18.5
(a) Includes net gain on the sale of discontinued business of $31,430 or $.58 per share. (b) Includes special charges for the revaluation of certain intangible assets. (c) Nonrecurring charge to recognize the accumulated postretirement health benefit obligation at July 1, 1991, resulting from the adoption of SFAS No. 106. Operating results preceding 1992 were not restated for the adoption of this new standard. (d) Includes a charge for restructuring of $125,250 or $1.45 per share. (e) Includes net loss on the disposal of Olympic HomeCare Products of $20,000, or $.36 per share. (f) Weighted average shares outstanding and earnings per share from 1986 through 1989 assume full dilution from a note converted during 1989.
Quarterly Data The Clorox Company 1st 2nd 3rd 4th In thousands, except per-share amounts. Quarter Quarter Quarter Quarter Year Year ended June 30, 1995 Net Sales $476,367 $414,454 $499,060 $594,289 $1,984,170 Cost of Products Sold 210,134 183,963 225,997 272,078 892,172 Net Earnings 53,181 34,095 54,034 59,522 200,832 Per Common Share Net Earnings $1.00 $0.64 $1.02 $1.13 $3.78 Dividends 0.48 0.48 0.48 0.48 1.92 Market Price (NYSE) High 52 3/4 59 1/2 62 3/8 65 3/4 65 3/4 Low 47 3/4 51 1/4 55 1/4 56 47 3/4 Year-end 65 1/4 Price/earnings ratio, year end 17 Year ended June 30, 1994 Net Sales $449,744 $370,844 $481,928 $534,433 $1,836,949 Cost of Products Sold 193,828 163,386 211,964 251,256 820,434 Earnings from Continuing Operations 46,314 30,586 49,515 53,578 179,993 Discontinued Operations 32,064(a) - - - 32,064(a) - ----------------------------------------------------------------- - ----------------------------------------- Net Earnings $ 78,378 $ 30,586 $ 49,515 $ 53,578 $ 212,057 Per Common Share Net Earnings $1.44(a) $0.57 $0.93 $1.00 $3.94(a) Dividends 0.45 0.45 0.45 0.45 1.80 Market Price (NYSE) High 55 3/8 55 1/4 55 3/4 52 1/4 55 3/4 Low 47 1/8 51 1/2 47 1/4 47 47 Year-end 48 7/8 Price/earnings ratio, year end 12
(a) Includes net gain on the sale of discontinued businesses of $31,430 or $.58 per share. THE COMPANY'S PRINCIPLE RETAIL BRANDS United States BBQ Bag Single-use, lightable bag of charcoal briquets Brita Water filter systems Clorox Regular, Fresh Scent and Lemon Fresh liquid bleach Clorox Toilet bowl cleanser and automatic toilet bowl cleaner Clorox Dilutable household cleaner, spray cleaner and Clean-Up gel Clorox 2 Regular and Lemon Fresh dry and liquid all-fabric bleaches Combat Insecticides: ant and roach bait stations; ant granules and stakes; roach gel; ant and roach aerosols and fogger Control Cat litter Formula 409 All-purpose spray cleaner, Regular and Professional Strength; glass and surface cleaner Fresh Step Cat litter Fresh Step Scoop Scoopable cat litter Hidden Bottled salad dressing, dry salad dressing and party Valley dip mixes; bottled fat-free salad dressing; Ranch ready-to-eat dips Hidden Seasoned mini-croutons Valley Ranch Salad Crispins K.C. Barbecue sauce Master- piece Kingsford Charcoal briquets, charcoal briquets with mesquite, charcoal lighter and wood smoke chips Kitchen Bouquet Browning and seasoning sauce and gravy aid Liquid- Drain opener, Regular and Professional Plumr Strength; buildup remover; and septic system treatment Match Instant lighting charcoal briquets Light Pine-Sol Cleaner, Regular and Lemon Scent; spray cleaner Soft Scrub Mild abrasive liquid cleanser: regular, with bleach, and with lemon; and gel S.O.S Steel wool soap pads: regular, lemon scent and juniors; home cleaning products Stain Out Soil and stain remover; liquid and spray SuperBait Insecticides: roach bait stations Tackle Household cleaner disinfectant Tilex Instant mildew remover; soap scum remover Tuffy Mesh scrubber PROFESSIONAL PRODUCTS Clorox Germicidal bleach Clorox Toilet bowl cleanser Clorox Professional system products; food service degreaser, floor cleaner, drain build-up remover, pot and pan detergent Clorox Dilutable cleaner Clean-Up Combat Insecticides Formula 409 All-purpose spray cleaner and glass & surface cleaner Hidden Salad dressings Valley Ranch K.C. Barbecue sauce Master- piece Kitchen Browning and seasoning sauce and gravy aid Bouquet Liquid- Drain opener Plumr Maxforce Professional insecticides; ant and roach baits, roach gel Pine-Sol Cleaner Tilex Instant mildew remover PRINCIPAL INTERNATIONAL MARKETS Argentina Brazil Canada Chile Colombia Costa Rica Czech Republic Dominican Republic Egypt Hong Kong Hungary Japan Malaysia Mexico Panama People's Republic of China Peru Poland Puerto Rico Republic of Korea Saudi Arabia/Gulf States Slovak Republic Uruguay Venezuela Yemen Arab Republic EX-21 3 LIST OF SUBSIDIARIES EXHIBIT 21 (to Form 10-K) THE CLOROX COMPANY SUBSIDIARIES OF THE REGISTRANT (100% owned unless otherwise indicated) Subsidiaries Jurisdiction of Incorporation - ----------------------------- ----------------------------- American Sanitary Company S.A. Costa Rica American Sanitary Company Grand Cayman, (Overseas) Inc. (51%) British West Indies Amesco Ltd. (49%) Grand Cayman, British West Indies The Brita Products Company Delaware Brita (Canada) Inc. Canada Clorox Argentina S.A. (90%) Argentina Clorox do Brasil Ltda. Brasil The Clorox Company of Canada, Ltd. Canada Clorox (Cayman Islands) Ltd. Cayman Islands Clorox Chile S.A. Chile Clorox (Far East) Ltd. (50%) Hong Kong The Clorox (Guangzhou) Company Ltd. People's Republic of China The Clorox International Company Delaware Clorox Korea Ltd. Korea Clorox (Malaysia) Industries Sdn. Bhd. Malaysia Clorox (Malaysia) Sdn. Bhd. Malaysia Clorox de Mexico, S.A. de C.V. Mexico Clorox del Pacifico S.A. (80%) Peru Clorox de Panama S.A. Panama Clorox del Peru S.A. Peru The Clorox Professional Products Company Delaware The Clorox Company of Puerto Rico Delaware Clorox Uruguay S.A. Uruguay Corporacion Clorox de Venezuela, S.A. Venezuela Henkel Iberica, S.A. (20%) Spain The Household Cleaning Products Egypt Company of Egypt, Ltd. (49%) The HVR Company Delaware The Kingsford Products Company Delaware (doing business in certain jurisdictions as "Combat Insect Control Systems" and in certain jurisdictions as "Maxforce Insect Control Systems") Mohammed Ali Abudawood and Saudi Arabia Company for Industry (30%) National Cleaning Products Saudi Arabia Company Limited (30%) Productos Del Hogar, C. por A. (49%) Dominican Republic Tecnoclor, S.A. (49%) Colombia United Cleaning Products Mfg. Co. Ltd. (33%) Yemen Arab Republic Yuhan-Clorox Co., Ltd. (50%) Korea EX-23 4 AUDITOR'S CONSENT LETTER EXHIBIT 21 TO FORM 10-K [Deloitte & Touche LLP Letterhead] INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in The Clorox Company Registration Statements No. 33-4083 on Form S-3, Nos. 33-41131, 33-41277, 2-88106 (Post-Effective Amendment No. 2), 33-24582, 33-56565 and 33-56563 on Form S-8 of our reports dated August 9, 1995, appearing in and incorporated by referencein this Annual Report on Form 10-K of The Clorox Company for the year ended June 30, 1995. /s/Deloitte & Touche LLP San Francisco, California September 28, 1995 EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE FINANCIAL STATEMENTS OF THE CLOROX COMPANY FOR THE FISCAL YEAR ENDED JUNE 30, 1995, AS PRESENTED IN THE CLOROX COMPANY'S FORM 10-K FILED FOR SUCH PERIOD, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 12-MOS JUN-30-1995 JUL-01-1994 JUN-30-1995 38174 99156 313389 1521 121095 600331 889874 364902 1906672 479323 253079 55422 0 0 888491 1906672 1984170 1984170 892172 1625113 (3957) 0 25120 337894 137062 200832 0 0 0 200832 3.78 0
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