Church & Dwight(CHD) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS Unaudited condensed consolidated financial statements, including income, comprehensive income, balance sheets, cash flows, and equity, are presented with detailed notes Condensed Consolidated Statements of Income The company's income statements show a decline in net sales, gross profit, and net income for both the three and six months ended June 30, 2025, compared to 2024 Three Months Ended June 30, 2025 vs. 2024: | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | | Net Sales | $1,506.3 | $1,511.2 | -0.3% | | Gross Profit | $647.0 | $712.1 | -9.1% | | Income from Operations | $261.7 | $336.9 | -22.3% | | Net Income | $191.0 | $243.5 | -21.6% | | Diluted EPS | $0.78 | $0.99 | -21.2% | | Cash dividends per share | $0.30 | $0.28 | 7.1% | Six Months Ended June 30, 2025 vs. 2024: | Metric | 2025 (Millions) | 2024 (Millions) | Change (%) | | :-------------------------------- | :-------------- | :-------------- | :--------- | | Net Sales | $2,973.4 | $3,014.5 | -1.4% | | Gross Profit | $1,306.6 | $1,399.1 | -6.6% | | Income from Operations | $557.0 | $641.9 | -13.2% | | Net Income | $411.1 | $471.2 | -12.8% | | Diluted EPS | $1.66 | $1.91 | -13.1% | | Cash dividends per share | $0.59 | $0.57 | 3.5% | Condensed Consolidated Statements of Comprehensive Income Comprehensive income decreased for both the three and six-month periods, with foreign exchange translation adjustments showing a positive shift Comprehensive Income (Millions): | Period | 2025 | 2024 | | :------------------- | :----- | :----- | | Three Months Ended June 30 | $198.7 | $243.7 | | Six Months Ended June 30 | $423.6 | $469.3 | Other Comprehensive Income (Loss) Components (Six Months Ended June 30, 2025 vs. 2024): | Component | 2025 (Millions) | 2024 (Millions) | | :-------------------------------- | :-------------- | :-------------- | | Foreign exchange translation adjustments | $23.2 | $(6.3) | | Defined benefit plan adjustments gain | $0.4 | $(0.2) | | Income (loss) from derivative agreements | $(11.1) | $4.6 | Condensed Consolidated Balance Sheets The balance sheet shows a slight decrease in total assets and liabilities, while total stockholders' equity increased from December 2024 to June 2025 Balance Sheet Highlights (Millions): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :-------------- | :---------------- | | Total Current Assets | $2,229.8 | $2,240.6 | | Total Assets | $8,788.2 | $8,883.1 | | Total Current Liabilities | $1,208.6 | $1,315.9 | | Total Liabilities | $4,394.5 | $4,522.3 | | Total Stockholders' Equity | $4,393.7 | $4,360.8 | Condensed Consolidated Statements of Cash Flow Net cash provided by operating activities decreased, while net cash used in investing activities also decreased, and net cash used in financing activities increased significantly Cash Flow Summary (Six Months Ended June 30, Millions): | Activity | 2025 | 2024 | | :-------------------------------- | :----- | :----- | | Net Cash Provided By Operating Activities | $416.5 | $499.9 | | Net Cash Used In Investing Activities | $(39.6) | $(91.5) | | Net Cash Used In Financing Activities | $(426.8) | $(257.4) | | Net Change In Cash and Cash Equivalents | $(40.9) | $147.2 | | Cash and Cash Equivalents at End of Period | $923.2 | $491.7 | - Cash paid for interest (net of capitalized amounts) was $46.6 million in 2025 and $48.2 million in 2024. Income taxes paid were $146.7 million in 2025 and $140.0 million in 2024[15] Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased from January 1, 2025, to June 30, 2025, influenced by net income, cash dividends, stock purchases, and other comprehensive income adjustments Stockholders' Equity Changes (Millions): | Metric | January 1, 2025 | June 30, 2025 | | :-------------------------------- | :-------------- | :------------ | | Total Stockholders' Equity | $4,360.8 | $4,393.7 | | Net income | $220.1 (Q1) / $191.0 (Q2) | | | Cash dividends | $(72.4) (Q1) / $(72.6) (Q2) | | | Stock purchases | | $(300.0) | | Accumulated Other Comprehensive Income (Loss) | $(30.9) | $(18.4) | Notes to Condensed Consolidated Financial Statements 1. Basis of Presentation Unaudited financial statements, including normal adjustments and R&D in SG&A, should be read with the 2024 10-K - Research and development expenses were $35.8 million for Q2 2025 (vs. $33.0 million in Q2 2024) and $68.6 million for the first six months of 2025 (vs. $63.1 million in 2024)[21] 2. New Accounting Pronouncements ASU 2023-07 (Segment Reporting) was adopted retrospectively; other ASUs on income taxes and expense disaggregation are being evaluated - ASU 2023-07, Segment Reporting, was adopted retrospectively for fiscal years beginning after December 15, 2023, leading to enhanced disclosures about significant segment expenses[22] - ASU 2023-09 (Income Taxes) and ASU 2024-03/2025-01 (Expense Disaggregation Disclosures) are not yet adopted, and the Company is evaluating their potential impact[23][24] 3. Inventories Inventory balances slightly increased from December 2024 to June 2025, primarily due to higher finished goods Inventories (Millions): | Category | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :---------------- | | Raw materials and supplies | $134.8 | $140.4 | | Work in process | $40.2 | $45.4 | | Finished goods | $447.4 | $427.5 | | Total | $622.4 | $613.3 | 4. Property, Plant and Equipment, Net ("PP&E") Net PP&E slightly decreased, while depreciation expense increased year-over-year for both periods Net PP&E (Millions): | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :-------------- | :---------------- | | Gross PP&E | $1,867.9 | $1,851.8 | | Less accumulated depreciation | $944.4 | $920.1 | | Net PP&E | $923.5 | $931.7 | Depreciation Expense on PP&E (Millions): | Period | 2025 | 2024 | | :-------------------- | :----- | :----- | | Three Months Ended June 30 | $22.5 | $20.4 | | Six Months Ended June 30 | $45.1 | $38.8 | - An impairment charge of $60.0 million related to Construction in progress assets was recorded in SG&A in the Consumer Domestic segment during Q3