\ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended June 30, 2017 Commission file number 1-10585 CHURCH & DWIGHT CO., INC. (Exact name of registrant as specified in its charter) Delaware 13-4996950 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 500 Charles Ewing Boulevard, Ewing, N.J. 08628 (Address of principal executive offices) Registrant’s telephone number, including area code: (609) 806-1200 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on which registered Title of each class Common Stock, $1 par value New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ☒ ☐ Large accelerated filer Accelerated filer ☐ ☐ Non-accelerated filer Smaller reporting company Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of August 1, 2017, there were 249,509,049 shares of Common Stock outstanding.
TABLE OF CONTENTS PART I Page Item 1. Financial Statements 3 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 19 3. Quantitative and Qualitative Disclosures about Market Risk 27 4. Controls and Procedures 27 PART II 1. Legal Proceedings 28 1A. Risk Factors 28 2. Unregistered Sales of Equity Securities and Use of Proceeds 29 6. Exhibits 30 2
PART I – FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (In millions, except per share data) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net Sales $ 898.0 $ 877.4 $ 1,775.2 $ 1,726.4 Cost of sales 487.6 469.4 965.5 939.4 Gross Profit 410.4 408.0 809.7 787.0 Marketing expenses 130.9 120.2 221.7 212.7 Selling, general and administrative expenses 156.3 112.5 268.7 219.5 Income from Operations 123.2 175.3 319.3 354.8 Equity in earnings of affiliates 3.1 2.5 5.2 4.2 Investment earnings 0.3 0.4 0.7 0.7 Other income (expense), net (0.5) (0.1) (0.7) (1.8) Interest expense (9.3) (7.1) (17.5) (13.9) Income before Income Taxes 116.8 171.0 307.0 344.0 Income taxes 43.9 59.4 102.6 119.4 Net Income $ 72.9 $ 111.6 $ 204.4 $ 224.6 Weighted average shares outstanding - Basic 249.8 257.0 252.0 258.0 Weighted average shares outstanding - Diluted 255.6 261.9 257.7 262.8 Net income per share - Basic $ 0.29 $ 0.43 $ 0.81 $ 0.87 Net income per share - Diluted $ 0.29 $ 0.43 $ 0.79 $ 0.85 Cash dividends per share $ 0.19 $ 0.18 $ 0.38 $ 0.355 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) (In millions) Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, 2017 2016 2017 2016 Net Income $ 72.9 $ 111.6 $ 204.4 $ 224.6 Other comprehensive income, net of tax: Foreign exchange translation adjustments 6.7 (6.5) 14.6 3.4 Defined benefit plan adjustments gain (loss) 11.9 0.0 11.9 0.0 Income (loss) from derivative agreements (3.4) (0.8) (4.0) (7.5) Other comprehensive income (loss) 15.2 (7.3) 22.5 (4.1) Comprehensive income $ 88.1 $ 104.3 $ 226.9 $ 220.5 See Notes to Condensed Consolidated Financial Statements (Unaudited). 3
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions, except share and per share data) December 31, June 30, 2017 2016 Assets Current Assets Cash and cash equivalents $ 237.6 $ 187.8 Accounts receivable, less allowances of $1.9 and $2.1 303.8 287.0 Inventories 292.3 258.2 Other current assets 43.5 23.8 Total Current Assets 877.2 756.8 Property, Plant and Equipment, Net 573.2 588.6 Equity Investment in Affiliates 9.5 8.5 Trade Names and Other Intangibles, Net 1,561.8 1,431.8 Goodwill 1,534.7 1,444.1 Other Assets 110.6 124.3 Total Assets $ 4,667.0 $ 4,354.1 Liabilities and Stockholders' Equity Current Liabilities Short-term borrowings $ 629.3 $ 426.8 Accounts payable and accrued expenses 581.6 568.9 Income taxes payable 0.8 6.2 Total Current Liabilities 1,211.7 1,001.9 Long-term Debt 894.1 693.4 Deferred Income Taxes 524.7 512.2 Deferred and Other Long-term Liabilities 188.2 168.7 Total Liabilities 2,818.7 2,376.2 Commitments and Contingencies Stockholders' Equity Preferred Stock, $1.00 par value, Authorized 2,500,000 shares; none issued 0.0 0.0 Common Stock, $1.00 par value, Authorized 600,000,000 shares and 292,855,100 shares issued as of June 30, 2017 292.8 292.8 Additional paid-in capital 258.1 251.4 Retained earnings 3,034.7 2,926.0 Accumulated other comprehensive loss (41.3) (63.8) Common stock in treasury, at cost: 43,571,217 shares in 2017 and 38,892,165 shares in 2016 (1,696.0) (1,428.5) Total Stockholders' Equity 1,848.3 1,977.9 Total Liabilities and Stockholders’ Equity $ 4,667.0 $ 4,354.1 See Notes to Condensed Consolidated Financial Statements (Unaudited). 4
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (In millions) Six Months Ended June 30, June 30, 2017 2016 Cash Flow From Operating Activities Net Income $ 204.4 $ 224.6 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 29.7 30.7 Amortization expense 29.5 23.7 Deferred income taxes 11.3 14.2 Equity in net earnings of affiliates (5.2) (4.2) Distributions from unconsolidated affiliates 4.3 3.4 Non-cash compensation expense 12.3 12.3 Non-cash pension settlement charge 31.7 0.0 Other (0.4) 1.2 Change in assets and liabilities: Accounts receivable (6.8) 0.3 Inventories (30.1) (9.3) Other current assets (10.4) (1.9) Accounts payable and accrued expenses (14.2) 20.1 Income taxes payable (10.7) 0.2 Excess tax benefit on stock options exercised 0.0 (18.2) Other operating assets and liabilities, net 3.9 (0.6) Net Cash Provided By Operating Activities 249.3 296.5 Cash Flow From Investing Activities Additions to property, plant and equipment (10.4) (17.8) Acquisitions (235.3) (175.5) Other 3.4 (0.3) Net Cash Used In Investing Activities (242.3) (193.6) Cash Flow From Financing Activities Long-term debt borrowings 200.0 0.0 Short-term debt borrowings (repayments) 202.6 23.8 Proceeds from stock options exercised 27.3 29.4 Excess tax benefit on stock options exercised 0.0 18.2 Payment of cash dividends (95.7) (91.7) Purchase of treasury stock (300.0) (200.0) Other (1.0) (5.3) Net Cash Provided By (Used In) Financing Activities 33.2 (225.6) Effect of exchange rate changes on cash and cash equivalents 9.6 3.5 Net Change In Cash and Cash Equivalents 49.8 (119.2) Cash and Cash Equivalents at Beginning of Period 187.8 330.0 Cash and Cash Equivalents at End of Period $ 237.6 $ 210.8 See Notes to Condensed Consolidated Financial Statements (Unaudited) . 5
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW-CONTINUED (Unaudited) (In millions) Six Months Ended June 30, June 30, 2017 2016 Cash paid during the year for: Interest (net of amounts capitalized) $ 16.8 $ 13.0 Income taxes $ 102.0 $ 104.8 Supplemental disclosure of non-cash investing activities: Property, plant and equipment expenditures included in Accounts Payable $ 5.3 $ 4.5 See Notes to Condensed Consolidated Financial Statements (Unaudited). 6
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