Church & Dwight(CHD) - 2022 Q4 - Annual Report

Acquisition and Financial Performance - The Hero Acquisition was completed for $546.8 million, with an additional deferred payment of $8.0 million, and Hero's annual net sales for 2022 were approximately $179.0 million[23]. - The company maintains a strong financial condition, allowing for strategic acquisitions, new product development, and capital expenditures to support organic growth[21]. - Walmart Inc. accounted for 24% of consolidated net sales in 2022, with no other customer exceeding 10%[38]. - The cost of raw materials increased in 2022 compared to 2021, impacting core commodity costs and financial results[19]. - The Specialty Products Division (SPD) accounted for approximately 6% of the consolidated net sales in 2022[12]. - Personal care products constituted approximately 45% of the Consumer Domestic sales and about 35% of the consolidated net sales in 2022[29]. Business Segments and Operations - The company operates in three principal segments: Consumer Domestic, Consumer International, and Specialty Products Division[7]. - The Consumer International segment exports to over 130 markets globally, including China and Japan[30]. - The company has adequate trona reserves to support sodium bicarbonate production for the foreseeable future[18]. Regulatory Compliance and Product Management - The company markets a range of OTC pharmaceutical products, including anti-acne cream and sunscreens, which are subject to FDA regulations[43]. - Following the CARES Act, the FDA is updating OTC monographs, impacting the company's oral care products and HERO sunscreens, requiring them to meet "state of the art" standards[43]. - The company is subject to periodic audits to ensure compliance with regulations, with non-compliance potentially leading to product seizures or recalls, adversely affecting financial conditions[44]. - The FDA's Food Safety Modernization Act (FSMA) mandates preventive controls for food and animal feed products, which the company must comply with[45]. - The company must report serious adverse events associated with its OTC pharmaceutical products marketed in the U.S., ensuring regulatory compliance[44]. - The FDA's cGMP regulations govern the manufacturing and labeling of dietary supplements, with non-compliance risking product adulteration and enforcement actions[48]. Employee and Corporate Governance - The company is committed to transparency and accountability, publishing workplace demographics in its Sustainability Reports since 2022[51]. - The company offers a comprehensive benefits package to employees, including health insurance and retirement savings plans[53]. - The company maintains a website providing access to financial reports and corporate governance documents, ensuring transparency for investors[56]. - The company is focused on attracting and retaining top talent while recognizing and rewarding performance[52].