Clorox Reports Strong Q2 Sales and Profit Growth; Provides Improved Fiscal Year 2013 Outlook

OAKLAND, CA, Feb 04 (Marketwire) --
The Clorox Company (NYSE: CLX) today announced strong results for its
second quarter, which ended Dec. 31, 2012. The company reported a 9
percent increase in sales and 18 percent growth in diluted earnings per
share (EPS). Clorox also delivered one percentage point of gross margin
improvement.

"I'm extremely pleased with our second-quarter results," said Chairman
and CEO Don Knauss. "We had strong year-over-year sales growth, as well
as another quarter of gross margin expansion, which is a testament to our
focus on delivering profitable growth. Based on our 5 percent sales
growth and 10 percent EPS growth in the first half of the fiscal year, we
feel more optimistic about our full-year outlook."

Some information in this press release is reported on a non-GAAP basis.
See "Non-GAAP Financial Information" below and the tables toward the end
of this press release for more information and a reconciliation of key
second-quarter results.

Fiscal Second-Quarter Results
Following is a summary of key
second-quarter results. All comparisons are with the second quarter of
fiscal year 2012, unless otherwise stated.

* 93 cents diluted earnings per share (18 percent growth)
* 5% volume
growth
* 9% sales growth

Clorox reported second-quarter earnings of $123 million, or 93 cents
diluted EPS. This compares with $105 million, or 79 cents diluted EPS, in
the year-ago quarter. Current-quarter results reflect higher sales and
volume, as well as gross margin expansion, partially offset by higher
selling and administration expenses, including continued investments in
the company's information technology (IT) systems; higher manufacturing
and logistics costs, which include the impact of inflationary pressures;
and a higher tax rate versus the year-ago quarter. In December, Clorox
completed a sale and leaseback transaction of its Oakland, Calif. general
office. The company realized net cash proceeds of $108 million and
recognized a gain of $6 million, or 3 cents diluted EPS, in the second
quarter related to the sale and leaseback transaction.

Volume for the second quarter of fiscal 2013 increased 5 percent. Sales
grew 9 percent, with increases in all four of the company's reportable
segments. The difference between sales and volume growth was mostly due
to the benefit of price increases. Sales benefited from an extra shipping
day in the quarter and acquisitions made in the last fiscal year, each
contributing about 1.5 percentage points of growth. Excluding these
items, sales grew about 5 percent. Sales also benefited from shipments to
reset retail shelves with the new concentrated bleach product, as well as
shipments of disinfecting products due to cold- and flu-related early
third-quarter merchandising events.

Gross margin increased 100 basis points to 42.5 percent from 41.5 percent
in the year-ago quarter, driven primarily by strong cost savings and the
benefit of price increases, partially offset by higher manufacturing and
logistics costs, which include the impact of inflationary pressures.

Year-to-date net cash provided by operations increased to $325 million
from $168 million in the prior-year period. The year-over-year increase
was due primarily to favorable changes in working capital and higher
earnings. For the full fiscal year, Clorox anticipates free cash flow of
9 percent to 10 percent of sales. The company defines free cash flow as
cash provided by operations less capital expenditures. Capital
expenditures are expected to be in the range of $200 million to $210
million for the current fiscal year. Following the December sale and
leaseback transaction related to the company's general office in Oakland,
Clorox ended the quarter with an elevated cash balance. Cash and the
issuance of commercial paper will be used to refinance $500 million in
long-term debt maturing in March 2013.

Key Segment Results
Following is a summary of key second-quarter results
by reportable segment. All comparisons are with the second quarter of
fiscal 2012, unless otherwise stated.

Cleaning
(Laundry, Home Care,
Professional Products)

-- 13% volume increase
-- 15% sales increase
-- 28% pretax earnings increase

Volume growth in the segment was up double-digits, with strong
results in all three business units. Home Care delivered gains on almost
every brand, with the biggest contribution from Clorox(R) disinfecting
wipes. Due to the severity of this year's flu season, the Home Care
business saw strong retailer buy-in and significant consumption of
disinfecting wipes, as well as other Clorox-branded cleaning products.
Laundry volume increased driven by retailer shelf resets and strong
consumer acceptance of new concentrated Clorox(R) regular bleach. Gains
on bleach were partially offset by lower shipments of Clorox 2(R) stain
fighter and color booster due to continued weak category trends. Also
contributing to the segment's results were strong double-digit volume
increases in the Professional Products Division behind the benefit of
acquisitions made in fiscal 2012, as well as double-digit base business
growth. Sales outpaced volume due to the benefit of price increases.
Pretax earnings growth was driven by higher sales and margin expansion
primarily from strong cost savings and favorable commodity costs,
partially offset by higher manufacturing and logistics costs.

Household

(Bags and Wraps, Charcoal, Cat Litter)

-- 1% volume increase
-- 7% sales increase
-- 65% pretax earnings increase

The segment's volume growth was driven primarily by an increase in
early shipments in the Charcoal business ahead of the upcoming grilling
season. Cat Litter volume was flat primarily due to the negative volume
impact of last May's price increases. Glad(R) sales were up, but volume
was down primarily driven by decreased shipments in base trash bags and
food bags. Volume declines were partially offset by continued strong
growth in premium trash bag products such as Glad(R) OdorShield(R) trash
bags with Febreze(R). Segment sales growth outpaced volume growth
primarily due to the benefit of previous price increases across all three
businesses, as well as favorable product mix. Pretax earnings growth was
driven largely by higher sales and margin expansion primarily from strong
cost savings of more than $9 million and favorable product mix.

Lifestyle
(Dressings and Sauces, Water Filtration, Natural Personal
Care)

-- 7% volume increase
-- 8% sales increase
-- 1% pretax earnings increase

Volume growth in the segment was driven by double-digit shipment
gains in the Burt's Bees business, reflecting base business growth, new
product innovation in lip care and increased shipments of face products
during the holiday season. The Food business also saw strong volume
growth primarily from higher shipments of Hidden Valley(R) products due
to strong base business growth and the launch of new non-ranch dressings.
Volume declined in the Water Filtration business due to category
softness. Segment sales outpaced volume due to previous price increases.
Pretax earnings growth reflected higher sales and strong cost savings,
offset by higher selling and administrative expenses, unfavorable product
mix and higher advertising investments.

International
(All countries outside of the U.S.)

-- 3% volume decrease
-- 3% sales increase
-- 24% pretax earnings decrease

Volume declined in the segment largely due to decreased shipments in
Latin America and Canada. Latin America volume was down mid-single
digits, but sales were up due to the benefit of price increases. Outside
of Latin America and Canada, volume results were generally positive.
Overall segment sales increased primarily due to the benefit of price
increases. The 24 percent pre-tax earnings decline of $8 million was due
to margin compression, driven in part by significant inflation impacting
manufacturing and logistics costs, expenses associated with IT systems
implementation in Latin America and the impact of price controls in
Venezuela and Argentina.

Clorox Provides Improved 2013 Financial Outlook
Clorox provided an
improved financial outlook for fiscal 2013:

* 3-5 percent sales growth (previously 2-4 percent)
* EBIT margin up
25-50 basis points (unchanged)
* Diluted EPS in the range of $4.25-$4.35
(previously $4.20-$4.35)

Clorox now anticipates sales growth for fiscal 2013 in the range of 3
percent to 5 percent, versus the company's previous outlook of 2 percent
to 4 percent. This reflects strong results in the first half of the
fiscal year, continued category growth, product innovation across many of
the company's brands and the benefit of previously implemented prices
increases. Uncertainty in some international markets, particularly in
Venezuela and Argentina, as well as a more challenging comparison to
strong sales growth of nearly 6 percent in the second half of fiscal
2012, continue to be factors in the company's fiscal 2013 outlook.

The company continues to expect earnings before interest and taxes (EBIT)
margin to increase by 25-50 basis points for the fiscal year, reflecting
strong cost savings and the benefit of price increases. Commodity costs
are estimated to be about flat versus the prior year. The company's
outlook reflects a range of 5 to 10 cents of diluted EPS impact related
to a possible currency devaluation in Venezuela and continued difficulty
in implementing price increases in the country. The updated outlook also
reflects higher advertising spending and a higher tax rate in the second
half of the fiscal year versus the same period in fiscal 2012.

Clorox continues to expect spending against its systems and facilities
investments, as well as other infrastructure-related investments, to be
about equal to fiscal 2012, or in the range of $50 million to $55
million.

Net of all these factors, Clorox now anticipates fiscal 2013 diluted EPS
in the range of $4.25 to $4.35 versus the company's previous outlook of
$4.20 to $4.35.

"We're pleased to be raising our outlook for sales and earnings,
recognizing the company's strong first-half results, including
significant margin growth," said Senior Vice President - Chief Financial
Officer Steve Robb. "I'm confident about the plans for the remainder of
the year, including increased investments in demand-building programs to
support product launches and the health of our brands. In addition, our
outlook includes an increased contingency given the ongoing challenges in
Venezuela, including a possible currency devaluation."

For More Detailed Financial Information

Visit the Investors: Financial Reporting: Financial Results section of
the company's website at TheCloroxCompany.com for the following:

* Supplemental volume and sales growth information
* Supplemental gross
margin driver information
* Reconciliation of certain non-GAAP financial
information, including earnings before interest and taxes (EBIT) and
earnings before interest, taxes, depreciation and amortization (EBITDA)

* Supplemental balance sheet, cash flow information and fiscal
year-to-date free cash flow reconciliation
* Supplemental price-change
information

Note: Percentage and basis-point changes noted in this press release are
calculated based on rounded numbers. Supplemental materials are available
in the Investors: Financial Reporting: Financial Results section of the
company's website at TheCloroxCompany.com.

The Clorox Company
The Clorox Company is a leading multinational
manufacturer and marketer of consumer and professional products with
approximately 8,400 employees and fiscal year 2012 revenues of $5.5
billion. Clorox markets some of the most trusted and recognized brand
names, including its namesake bleach and cleaning products, Clorox
Healthcare(TM), HealthLink(R), Aplicare(R) and Dispatch(R) products,
Green Works(R) naturally derived products, Pine-Sol(R) cleaners, Poett(R)
home care products, Fresh Step(R) cat litter, Glad(R) bags, wraps and
containers, Kingsford(R) charcoal, Hidden Valley(R) and KC Masterpiece(R)
dressings and sauces, Brita(R) water-filtration products, and Burt's
Bees(R) and gud(R) natural personal care products. Nearly 90 percent of
the company's brands hold the No. 1 or No. 2 market share positions in
their categories. Clorox's commitment to corporate responsibility
includes making a positive difference in its communities. In fiscal year
2012, The Clorox Company Foundation awarded $3.5 million in cash grants,
and Clorox made product donations valued at $15 million. For more
information, visit TheCloroxCompany.com.

Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended (the Securities Act), and Section 21E of the Securities
Exchange Act of 1934, as amended (the Exchange Act), and such
forward-looking statements involve risks and uncertainties. Except for
historical information, matters discussed above, including statements
about future volume, sales, costs, cost savings, earnings, cash flows,
plans, objectives, expectations, growth, or profitability, are
forward-looking statements based on management's estimates, assumptions
and projections. Words such as "will," "could," "may," "expects,"
"anticipates," "targets," "goals," "projects," "intends," "plans,"
"believes," "seeks," "estimates," and variations on such words, and
similar expressions, 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 above. 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 Annual Report on Form 10-K for the
fiscal year ended June 30, 2012, as updated from time to time in the
company's SEC filings. These factors include, but are not limited to: the
company's costs, including volatility and increases in commodity costs
such as resin, diesel, chlor-alkali, sodium hypochlorite, high-strength
bleach, agricultural commodities and other raw materials; increases in
energy costs; the ability of the company to implement and generate
expected savings from its programs to reduce costs, including its supply
chain restructuring and other restructuring plans; supply disruptions or
any future supply constraints that may affect key commodities or product
inputs; risks inherent in relationships with suppliers, including
sole-source or single-source suppliers; risks related to the handling
and/or transportation of hazardous substances, including, but not limited
to, chlorine; the success of the company's strategies; the ability to
manage and realize the benefits of joint ventures and other cooperative
relationships, including the company's joint venture regarding the
company's Glad(R) plastic bags, wraps and containers business, and the
agreements relating to the provision of information technology, procure
to pay and other key services by third parties; risks relating to
acquisitions, mergers and divestitures, and the costs associated
therewith; risks inherent in maintaining an effective system of internal
controls, including the potential impact of acquisitions or the use of
third-party service providers, and the need to refine controls to adjust
for accounting, financial reporting and other organizational changes or
business conditions; the ability of the company to successfully manage
tax, regulatory, product liability, intellectual property, environmental
and other legal matters, including the risk resulting from joint and
several liability for environmental contingencies and risks inherent in
litigation, including class action litigation and International
litigation; risks related to maintaining and updating the company's
information systems, including potential disruptions, costs and the
ability of the company to implement adequate information systems in order
to support the current business and to support the company's potential
growth; the ability of the company to develop commercially successful
products that delight the consumer; consumer and customer reaction to
price changes; actions by competitors; risks related to customer
concentration; customer-specific ordering patterns and trends; risks
arising out of natural disasters; the impact of disease outbreaks, or
pandemics on the company's suppliers' or customers' operations; changes
in the company's tax rate; unfavorable worldwide, regional or local
general economic and marketplace conditions and events, including
consumer confidence and consumer spending levels, the rate of economic
growth, the rate of inflation or deflation, and the financial condition
of the company's customers, suppliers and service providers; foreign
currency exchange rate fluctuations and other risks of international
operations, including government-imposed price controls; unfavorable
political conditions in the countries where the company does business and
other operational risks in such countries; the impact of the volatility
of the debt and equity markets on the company's cost of borrowing, cost
of capital and access to funds, including commercial paper and its credit
facility; risks relating to changes in the company's capital structure,
including risks related to the company's ability to implement share
repurchase plans and the impact thereof on the company's capital
structure and earnings per share; the impact of any unanticipated
restructuring or asset-impairment charges and the ability of the company
to successfully implement restructuring plans; risks arising from
declines in cash flow, whether resulting from declining sales, declining
product categories, higher cost levels, tax payments, debt payments,
share repurchases, higher capital spending, interest cost increases
greater than management's expectations, interest rate fluctuations,
increases in debt or changes in credit ratings, or otherwise; the costs
and availability of shipping and transport services; potential costs in
the event of stockholder activism; and the company's ability to maintain
its business reputation and the reputation of its brands.

The company's forward-looking statements in this press release are based
on management's current views and assumptions regarding future events and
speak only as of their dates. 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 relating to free cash flow, EBIT margin and sales
growth. The company has included reconciliations of non-GAAP financial
information related to sales growth and EBIT margin to the most directly
comparable financial measure calculated in accordance with generally
accepted accounting principles in the U.S. (GAAP). See the end of this
press release for these reconciliations.

The company has disclosed information related to free cash flow, EBIT
margin and sales growth on a non-GAAP basis to supplement its condensed
consolidated statements of earnings presented in accordance with GAAP.
These non-GAAP financial measures exclude certain items that are included
in the company's results reported in accordance with GAAP, including
interest income, interest expense, the impact of foreign currency
exchange transactions and acquisitions.

Management believes that these non-GAAP financial measures provide useful
additional information to investors about current trends in the company's
operations and are useful for period-over-period comparisons. Management
uses free cash flow to help assess the cash generation ability of the
business and funds available for investing activities, such as
acquisitions, investing in the business to drive growth, and financing
activities, including debt payments, dividend payments and share
repurchases. Free cash flow does not represent cash available only for
discretionary expenditures, since the Company has mandatory debt service
requirements and other contractual and non-discretionary expenditures.
These non-GAAP financial measures should not be considered in isolation
or as a substitute for the comparable GAAP measures. In addition, these
non-GAAP measures may not be the same as similar measures provided by
other companies due to potential differences in methods of calculation
and items being excluded. They should only be read in connection with the
company's condensed consolidated statements of earnings presented in
accordance with GAAP.

See Below for These Unaudited Second-Quarter Results:

-- Condensed Consolidated Statements of Earnings, Reportable Segment
Information and Condensed Consolidated Balance Sheets
-- Reconciliation of Second-Quarter 2013 Sales Growth and Fiscal Year
2012 EBIT margin

For recent presentations made by company management and other
investor materials, visit
http://investors.thecloroxcompany.com/events.cfm.

Condensed Consolidated Statements of Earnings (Unaudited)
Dollars in millions, except share and per share amounts

Three Months Ended Six Months Ended
----------------------- -----------------------
12/31/2012 12/31/2011 12/31/2012 12/31/2011
----------- ----------- ----------- -----------

Net sales $ 1,325 $ 1,221 $ 2,663 $ 2,526
Cost of products sold 762 714 1,526 1,473
----------- ----------- ----------- -----------
Gross profit 563 507 1,137 1,053

Selling and administrative
expenses 204 184 399 374
Advertising costs 116 115 238 233
Research and development
costs 31 29 61 57
Interest expense 33 30 66 59
Other income, net (9) (6) (9) (12)
----------- ----------- ----------- -----------
Earnings before income taxes 188 155 382 342
Income taxes 65 50 126 107
----------- ----------- ----------- -----------
Net earnings $ 123 $ 105 $ 256 $ 235
=========== =========== =========== ===========

Earnings per share
Basic $ 0.94 $ 0.79 $ 1.96 $ 1.78
Diluted 0.93 0.79 1.94 1.76

Weighted average shares
outstanding (in thousands)
Basic 130,991 131,112 130,630 131,540
Diluted 132,444 132,358 132,120 133,022

Reportable Segment Information
(Unaudited)
Dollars in millions

Earnings (Losses) Before
Second Quarter Net Sales Income Taxes
---------------------------- ----------------------------
Three Months Ended Three Months Ended
--------------------- ---------------------
% %
Change Change
12/31/12 12/31/11 (1) 12/31/12 12/31/11 (1)
---------- ---------- ------ ---------- ---------- ------

Cleaning Segment $ 425 $ 370 15% $ 100 $ 78 28%

Household Segment 357 334 7% 56 34 65%

Lifestyle Segment 237 219 8% 70 69 1%

International
Segment 306 298 3% 25 33 -24%

Corporate - - - (63) (59) 7%
---------- ---------- ------ ---------- ---------- ------

Total Company $ 1,325 $ 1,221 9% $ 188 $ 155 21%
========== ========== ====== ========== ========== ======

Year-to-Date Earnings (Losses) Before
Net Sales Income Taxes
---------------------------- ----------------------------
Six Months Ended Six Months Ended
--------------------- ---------------------
% %
Change Change
12/31/12 12/31/11 (1) 12/31/12 12/31/11 (1)
---------- ---------- ------ ---------- ---------- ------

Cleaning Segment $ 897 $ 809 11% $ 220 $ 186 18%

Household Segment 712 700 2% 106 76 39%

Lifestyle Segment 445 425 5% 126 124 2%

International
Segment 609 592 3% 53 73 -27%

Corporate - - - (123) (117) 5%
---------- ---------- ------ ---------- ---------- ------

Total Company $ 2,663 $ 2,526 5% $ 382 $ 342 12%
========== ========== ====== ========== ========== ======

(1) Percentages based on rounded numbers.

Condensed Consolidated Balance Sheets
Dollars in millions

12/31/2012 6/30/2012 12/31/2011
----------- ----------- -----------
(Unaudited) (Unaudited)

ASSETS
Current assets
Cash and cash equivalents $ 445 $ 267 $ 297
Receivables, net 511 576 489
Inventories, net 444 384 451
Other current assets 152 149 111
----------- ----------- -----------
Total current assets 1,552 1,376 1,348

Property, plant and equipment, net 1,051 1,081 1,041
Goodwill 1,119 1,112 1,093
Trademarks, net 556 556 566
Other intangible assets, net 79 86 103
Other assets 145 144 139
----------- ----------- -----------
Total assets $ 4,502 $ 4,355 $ 4,290
=========== =========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities
Notes and loans payable $ 5 $ 300 $ 476
Current maturities of long-term debt 500 850 350
Accounts payable 365 412 345
Accrued liabilities 493 494 438
Income taxes payable 10 5 28
----------- ----------- -----------
Total current liabilities 1,373 2,061 1,637
Long-term debt 2,169 1,571 2,070
Other liabilities 788 739 641
Deferred income taxes 116 119 141
----------- ----------- -----------
Total liabilities 4,446 4,490 4,489
----------- ----------- -----------

Contingencies

Stockholders' equity (deficit)
Preferred stock - - -
Common stock 159 159 159
Additional paid-in capital 644 633 616
Retained earnings 1,430 1,350 1,210
Treasury shares (1,801) (1,881) (1,861)
Accumulated other comprehensive net
losses (376) (396) (323)
----------- ----------- -----------
Stockholders' equity (deficit) 56 (135) (199)
----------- ----------- -----------
Total liabilities and stockholders'
equity (deficit) $ 4,502 $ 4,355 $ 4,290
=========== =========== ===========

The tables below present the reconciliation of non-GAAP financial
measures to the most directly comparable GAAP financial measures and
other supplemental information. See "Non-GAAP Financial Information"
above for further information regarding the company's use of non-GAAP
financial measures.

Second-Quarter Sales Growth Reconciliation

Fiscal Fiscal
2013 2012
-------- --------

Base sales growth - non-GAAP 7.1% 4.0%

Foreign exchange -0.1 -0.5
Acquisitions 1.5 --
-------- --------

Total sales growth - GAAP 8.5% 3.5%
======== ========

Fiscal Year 2012 EBIT(1) Margin Reconciliation

Fiscal
2012
--------

Earnings from continuing operations before income taxes - GAAP $ 791

Less: Interest income -3
Add: Interest expense 125
--------

EBIT (1) - non-GAAP $ 913
========

EBIT margin(2) - non-GAAP 16.7%

Net Sales $ 5,468

(1) EBIT represents Earnings from Continuing Operations Before Interest and
Taxes
(2) EBIT margin is a measure of EBIT as a percentage of net sales.

For Gross Margin Drivers, please refer to the Supplemental
Information: Gross Margin Driver page in the Financial Results section of
the company's website TheCloroxCompany.com.

Media Relations
Aileen Zerrudo
(510) 271-3075
aileen.zerrudo@clorox.com

Kathryn Caulfield
(510) 271-7209
kathryn.caulfield@clorox.com

Investor Relations
Lisah Burhan
(510) 271-3269
lisah.burhan@clorox.com

Steve Austenfeld
(510) 271-2270
steve.austenfeld@clorox.com

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