Sale advances Clorox's IGNITE strategy to
evolve its portfolio for long term profitable
growth
OAKLAND,
Calif., March 21, 2024 /PRNewswire/ -- The Clorox
Company (NYSE: CLX) (the "company" or "Clorox") today announced the
sale of certain wholly owned subsidiaries (collectively, "Clorox
Argentina"), with operations in Argentina, Uruguay and Paraguay, to Apex Capital, a private equity
fund associated with Grupo Mariposa, a 139-year old food and
beverage company with operations in 16 countries, and an investment
group led by Diego Barral, former
senior vice president and general manager of International at
Clorox. Financial terms were not disclosed.
The transaction included Clorox Argentina's two production
plants, as well as rights to certain Clorox brands in Argentina, Uruguay and Paraguay and shared intellectual property
across those brands. The transaction does not include Clorox's
Latin America research and
development and corporate hubs, which will remain in Argentina to support Clorox's ongoing
operations in other Latin American markets and provide transitional
services to Clorox Argentina under its new ownership. Clorox
Argentina's employees, including
all production staff, will remain employed by Clorox Argentina (to
be renamed and operate under the name of "Grupo Ayudin") except for
employees dedicated to the R&D and corporate hubs, who will
remain with Clorox under a new corporate structure in Argentina.
"This transaction supports our IGNITE strategy and our
commitment to evolve our portfolio to increase our focus on our
core business to drive more consistent, profitable growth," said
Chair and CEO Linda Rendle. "I would
like to thank our teammates in Argentina for effectively managing the
business in this dynamic operating environment. The new owners
share our values and bring proven local operating experience and we
believe their focus on maximizing the potential of the business
will position it to deliver continued growth that benefits
consumers and employees."
Clorox Argentina represents
approximately 2% of the company's fiscal year 2024 net sales
outlook provided in the most recent February
2024 earnings release. As a result of this transaction, the
company will incur a one-time, after-tax charge of approximately
$233 million in the third quarter of
fiscal year 2024 (or approximately a $1.87 reduction to earnings per share). The vast
majority of this charge is driven by the non-cash release of
approximately $222 million of
accumulated currency translation previously recorded in equity.
This transaction is expected to reduce the company's fiscal year
2024 net sales growth by approximately half a point and adjusted
earnings per share by $0.00 to
$0.02 cents. The company is not
otherwise reiterating any prior guidance.
About The Clorox Company
The Clorox Company (NYSE: CLX) champions people to be well and
thrive every single day. Its trusted brands, which include Brita®,
Burt's Bees®, Clorox®, Fresh Step®, Glad®, Hidden Valley®,
Kingsford®, Liquid-Plumr®, Pine-Sol® and Natural Vitality®, can be
found in about nine of 10 U.S. homes and internationally with
brands such as Ayudin®, Clorinda®, Chux® and Poett®. Headquartered
in Oakland, California, since
1913, Clorox was one of the first in the U.S. to integrate ESG into
its business reporting. In 2024 the company was ranked No. 1 on
Barron's 100 Most Sustainable Companies list for the second
consecutive year. Visit thecloroxcompany.com to learn
more.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
including, among others, statements regarding the expected or
potential impact of the company's operational disruption stemming
from a cyberattack, and any such forward-looking statements involve
risks, assumptions and uncertainties. Except for historical
information, statements about future volumes, sales, organic sales
growth, foreign currencies, costs, cost savings, margins, earnings,
earnings per share, diluted earnings per share, foreign currency
exchange rates, tax rates, cash flows, plans, objectives,
expectations, growth or profitability are forward-looking
statements based on management's estimates, beliefs, assumptions
and projections. Words such as "could," "may," "expects,"
"anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," "will," "predicts," and
variations on such words, and similar expressions that reflect our
current views with respect to future events and operational,
economic and financial performance are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions, subject to risks and uncertainties, and actual
results could differ materially from those discussed. Important
factors that could affect performance and cause results to differ
materially from management's expectations, are described in the
sections entitled "Risk Factors" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations" in the
company's Annual Report on Form 10-K for the fiscal year ended
June 30, 2023, and in the company's
Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2023, and as updated
from time to time in the company's Securities and Exchange
Commission filings. These factors include, but are not limited to:
our recovery from the cyberattack, unfavorable general economic and
geopolitical conditions beyond our control, including supply chain
disruptions, labor shortages, wage pressures, rising inflation, the
interest rate environment, fuel and energy costs, foreign currency
exchange rate fluctuations, weather events or natural disasters,
disease outbreaks or pandemics, such as COVID-19, terrorism, and
unstable geopolitical conditions, including ongoing conflicts in
the Middle East and Ukraine and rising tensions between
China and Taiwan, as well as macroeconomic and
geopolitical volatility and uncertainty as a result of a number of
these and other factors, including actual and potential shifts
between the U.S. and its trading partners, especially China; volatility and increases in the costs
of raw materials, energy, transportation, labor and other necessary
supplies or services; the impact of the changing retail
environment, including the growth of alternative retail channels
and business models, and changing consumer preferences; the ability
of the company to drive sales growth, increase prices and market
share, grow its product categories and manage favorable product and
geographic mix; risks related to supply chain issues, product
shortages and disruptions to the business, as a result of increased
supply chain dependencies due to an expanded supplier network and a
reliance on certain single-source suppliers; intense competition in
the company's markets; the ability of the company to implement and
generate cost savings and efficiencies, and successfully implement
its transformational initiatives or strategies, including achieving
anticipated benefits and cost savings from the implementation of
the streamlined operating model and digital capabilities and
productivity enhancements; dependence on key customers and risks
related to customer consolidation and ordering patterns; the
ability of the company to successfully manage global political,
legal, tax and regulatory risks, including changes in regulatory or
administrative activity; risks related to international operations
and international trade, including changing macroeconomic
conditions as a result of inflation, volatile commodity prices and
increases in raw and packaging materials prices, labor, energy and
logistics; global economic or political instability; foreign
currency fluctuations, such as devaluations, and foreign currency
exchange rate controls; changes in governmental policies, including
trade, travel or immigration restrictions, new or additional
tariffs, and price or other controls; labor claims and civil
unrest; continued high levels of inflation in Argentina; risks relating to acquisitions, new
ventures and divestitures, and associated costs, including for
asset impairment charges related to, among others, intangible
assets, including trademarks and goodwill, in particular the
impairment charges related to the carrying value of the company's
Vitamins, Minerals and Supplements business and the divestiture of
and related loss on sale from our operations in Argentina; and the ability to complete
announced transactions and, if completed, integration costs and
potential contingent liabilities related to those transactions; the
accuracy of the company's estimates and assumptions on which its
financial projections, including any sales or earnings guidance or
outlook it may provide from time to time, are based; risks related
to increases in the estimated fair value of The Procter &
Gamble Company's interest in the Glad business; the
performance of strategic alliances and other business
relationships.
The company's forward-looking statements in this press release
are based on management's current views, beliefs, assumptions and
expectations regarding future events and speak only as of the date
of this press release. The company undertakes no obligation to
publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, except
as required by the federal securities laws.
Non-GAAP Financial Information
This press release contains non-GAAP financial information related
to adjusted EPS. Adjusted EPS is defined as diluted earnings per
share that excludes or has otherwise been adjusted for significant
items that are nonrecurring or unusual. The income tax effect on
non-GAAP items is calculated based upon the tax laws and statutory
income tax rates applicable in the tax jurisdiction(s) of the
underlying non-GAAP adjustment. Adjusted EPS is supplemental
information that management uses to help evaluate the company's
historical and prospective financial performance on a consistent
basis over time. Management believes that by adjusting for certain
items affecting comparability of performance over time, such as the
pension settlement charge, incremental costs related to the
cyberattack, asset impairments, charges related to the streamlined
operating model, charges related to the digital capabilities and
productivity enhancements investment, significant losses/(gains)
related to acquisitions or dispositions, and other nonrecurring or
unusual items, investors and management are able to gain additional
insight into the company's underlying operating performance on a
consistent basis over time. However, adjusted EPS may not be the
same as similar measures provided by other companies due to
potential differences in methods of calculation or differences in
which items are incorporated into these adjustments.
CLX-F
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SOURCE The Clorox Company