Church & Dwight Reports Strong First Quarter Earnings

Church & Dwight Co., Inc. reported an 11% increase in net income for the quarter ended March 27, 2009 of $62.6 million. Net sales for the first quarter jumped 5% to $580.9 million. Organic sales increased by approximately 6% for the quarter which excludes the impact of foreign exchange, acquisitions and divestitures.

James R. Craigie, chairman and chief executive officer, commented, “We are very pleased with our solid first quarter results particularly in this difficult economic environment. Our results reflect continued strong organic sales growth and exceptional gross and operating margin expansion. The organic sales growth was driven by strong consumer appeal for our high quality value-oriented products, carryover benefits of 2008 pricing actions, new products, and a significant increase in marketing spending, partially offset by soft sales in the Specialty Products Division. The improved gross margin reflects pricing, earlier than expected benefits from lower commodity costs, acquisition benefits relating to the acquired businesses from Coty, Inc. and cost reduction programs.”

Consumer Domestic sales rose 14% to $438.1 million over the prior year first quarter sales. The first quarter sales increase was primarily driven by the recently acquired businesses from Coty and higher sales of Xtra Liquid Laundry Detergent, Arm & Hammer Liquid Laundry Detergent, Oxiclean laundry additive and Arm & Hammer Powder Laundry Detergent, offset by lower sales of household cleaners and certain personal care brands. Consumer Domestic sales also benefited from October price increases on liquid laundry detergents, toothpaste and battery operated toothbrushes. However, Consumer International sales slipped 17% to $82.8 million from the prior year first quarter sales.

Operating income increased 13% to $104.7 million in the first quarter.

On the new product front, Mr. Craigie commented, “We will continue to introduce a steady pipeline of new and improved products in 2009 to drive solid organic growth. Specifically, we will introduce over 20 new products in 2009. These products will be largely focused on our eight power brands and will have a strong value orientation.”

The company is also on track with its previously announced project to construct a new integrated laundry detergent manufacturing plant and distribution center in York County, Pennsylvania and the related closing of the Company’s North Brunswick, NJ complex. The new facility is scheduled to open in the fourth quarter of 2009. The Company expects to spend $100 million in 2009, $20 million in 2010, for a total of $170 million in capital expenditures and cash transition expenses from 2008 to 2010 on the project. The new facility is expected to be a significant contributor to gross margin expansion in 2010.