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
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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
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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
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(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
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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
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None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
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None.
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
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)
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- -----------------------------
<S> <C> <C> <C>
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
</TABLE>
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
<TABLE>
<CPATION>
ITEM l4. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
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- --------
<S><C> <C> <C> <C> <C>
<C>
(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)
</TABLE>
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
<TABLE>
<CAPTION>
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> <C>
<C>
/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.
</TABLE>
<PAGE>
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."
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.
<PAGE>
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.
<PAGE>
<TABLE>
<CAPTION>
Statements of Consolidated Earnings
The Clorox Company
Years ended June 30
95 94 93
In thousands, except per-share amounts.
<S> <C>
<C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION
Consolidated Balance Sheets
The Clorox Company
Years ended June 30
95 94
In thousands, except share and per-share amounts.
<S>
<C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
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
<S> <C> <C> <C>
<C> <C> <C> <C>
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.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Consolidated Cash Flows
The Clorox Company
Years ended June 30
95 94 93
In thousands.
<S>
<C> <C> <C>
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.
</TABLE>
<PAGE>
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
<TABLE>
<CAPTION>
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
<S> <C>
<C>
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)
</TABLE>
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.
<TABLE>
<CAPTION>
Year ended June 30
94 93
In thousands, except per share amounts (unaudited)
<S> <C>
<C>
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
</TABLE>
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
<TABLE>
<CAPTION
In addition to common stock, the Company is authorized to
issue 5,000,000 shares of preferred stock with a par value
of $1 per share, none of which is outstanding. The Company
has a stock option plan under which options to purchase
shares of common stock may be granted to key employees. The
plan provides that the option price shall not be less than
the fair market value of the shares on the date of grant
and that no portion of the option may be exercised beyond
ten years from that date. Options which were outstanding at
June 30, 1995 become exercisable cumulatively over one, two
or three years from the grant date. At June 30, 1995,
1,572,538 shares were available for the granting of additional
options or other stock compensation awards. A summary of
changes in common stock options during 1995 and 1994 is:
Number
of
Shares Price per Share
<S> <C>
<C> <C><C>
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
</TABLE>
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
<TABLE>
<CAPTION>
The major components are (in thousands):
95
94 93
<S> <C>
<C> <C>
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
=================================================================
=============================
</TABLE>
13 Income Taxes
<TABLE>
<CAPTION>
Income tax expenses are (in thousands):
95
94 93
<S> <C>
<C> <C>
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%
</TABLE>
<TABLE>
<CAPTION>
The reconciliation between the Company's effective income tax
rate and the statutory federal income tax rate
is as follows:
95
94 93
<S> <C>
<C> <C>
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%
=================================================================
========================
</TABLE>
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
<PAGE>
<TABLE>
<CAPTION>
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.
<S> <C> <C> <C> <C> <C>
<C> <C> <C> <C> <C>
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
</TABLE>
(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.
<PAGE>
<TABLE>
<CAPTION>
Quarterly Data
The Clorox Company
1st
2nd 3rd 4th
In thousands, except per-share amounts. Quarter
Quarter Quarter Quarter Year
<S> <C> <C>
<C> <C> <C>
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
</TABLE>
(a) Includes net gain on the sale of discontinued businesses
of
$31,430 or $.58 per share.
<PAGE>
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
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
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
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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.
</LEGEND>
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<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 38174
<SECURITIES> 99156
<RECEIVABLES> 313389
<ALLOWANCES> 1521
<INVENTORY> 121095
<CURRENT-ASSETS> 600331
<PP&E> 889874
<DEPRECIATION> 364902
<TOTAL-ASSETS> 1906672
<CURRENT-LIABILITIES> 479323
<BONDS> 253079
<COMMON> 55422
0
0
<OTHER-SE> 888491
<TOTAL-LIABILITY-AND-EQUITY> 1906672
<SALES> 1984170
<TOTAL-REVENUES> 1984170
<CGS> 892172
<TOTAL-COSTS> 1625113
<OTHER-EXPENSES> (3957)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 25120
<INCOME-PRETAX> 337894
<INCOME-TAX> 137062
<INCOME-CONTINUING> 200832
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 200832
<EPS-PRIMARY> 3.78
<EPS-DILUTED> 0
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