Church & Dwight 10-Q 2023-03-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended March 31, 2023

OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

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 incorporation or organization)		(I.R.S. Employer Identification No.)

500 Charles Ewing Boulevard**,** Ewing**,** NJ 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:

Title of each class		Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1 par value		CHD	New York Stock Exchange

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 every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth 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 April 25, 2023, there were 244,263,640 shares of Common Stock outstanding.

TABLE OF CONTENTS

PART I

Item				Page
1.		Financial Statements		3
2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
3.		Quantitative and Qualitative Disclosures about Market Risk		28
4.		Controls and Procedures		28

PART II

1.		Legal Proceedings		30
1A.		Risk Factors		30
2.		Unregistered Sales of Equity Securities and Use of Proceeds		30
6.		Exhibits		31

PART I – FINANCIAL INFORMATION

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In millions, except per share data)

	Three Months Ended
	March 31,				March 31,
	2023				2022
Net Sales	$	1,429.8			$	1,297.2
Cost of sales		807.8				744.7
Gross Profit		622.0				552.5
Marketing expenses		122.3				101.9
Selling, general and administrative expenses		207.8				169.9
Income from Operations		291.9				280.7
Equity in earnings of affiliates		4.4				2.4
Other income (expense), net		1.3				(0.3	)
Interest expense		**(**28.8	)			(16.6	)
Income before Income Taxes		268.8				266.2
Income taxes		65.6				61.8
Net Income	$	203.2			$	204.4
Weighted average shares outstanding - Basic		243.8				242.6
Weighted average shares outstanding - Diluted		246.8				246.7
Net income per share - Basic	$	0.83			$	0.84
Net income per share - Diluted	$	0.82			$	0.83
Cash dividends per share	$	0.27			$	0.26

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In millions)

	Three Months Ended
	March 31,				March 31,
	2023				2022
Net Income	$	203.2			$	204.4
Other comprehensive income, net of tax:
Foreign exchange translation adjustments		2.4				(2.2	)
Defined benefit plan adjustments gain (loss)		1.5				1.9
Income (loss) from derivative agreements		**(**0.8	)			15.3
Other comprehensive income (loss)		3.1				15.0
Comprehensive income	$	206.3			$	219.4

See Notes to Condensed Consolidated Financial Statements (Unaudited).

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In millions, except share and per share data)

	March 31,				December 31,
	2023				2022
Assets
Current Assets
Cash and cash equivalents	$	202.8			$	270.3
Accounts receivable, less allowances of $3.6 and $3.5		429.3				422.0
Inventories		653.3				646.6
Other current assets		49.5				57.0
Total Current Assets		1,334.9				1,395.9
Property, Plant and Equipment, Net		772.2				761.1
Equity Investment in Affiliates		13.8				12.7
Trade Names and Other Intangibles, Net		3,400.6				3,431.6
Goodwill		2,430.3				2,426.8
Other Assets		314.8				317.5
Total Assets	$	8,266.6			$	8,345.6
Liabilities and Stockholders' Equity
Current Liabilities
Short-term borrowings	$	18.7			$	74.0
Accounts payable and accrued expenses		1,049.8				1,102.8
Income taxes payable		58.4				7.0
Total Current Liabilities		1,126.9				1,183.8
Long-term Debt		2,400.1				2,599.5
Deferred Income Taxes		755.8				757.0
Deferred and Other Long-term Liabilities		274.1				273.4
Business Acquisition Liabilities		42.0				42.0
Total Liabilities		4,598.9				4,855.7
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 293,709,982 shares issued as of March 31, 2023 and December 31, 2022		293.7				293.7
Additional paid-in capital		394.0				366.2
Retained earnings		5,661.2				5,524.6
Accumulated other comprehensive loss		**(**26.2	)			(29.3	)
Common stock in treasury, at cost: 49,515,884 shares as of March 31, 2023 and 49,814,106 shares as of December 31, 2022		**(**2,655.0	)			(2,665.3	)
Total Stockholders' Equity		3,667.7				3,489.9
Total Liabilities and Stockholders' Equity	$	8,266.6			$	8,345.6

See Notes to Condensed Consolidated Financial Statements (Unaudited).

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Unaudited)

(In millions)

	Three Months Ended
	March 31,				March 31,
	2023				2022
Cash Flow From Operating Activities
Net Income	$	203.2			$	204.4
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		16.9				16.6
Amortization expense		38.0				37.1
Deferred income taxes		**(**1.6	)			(1.0	)
Equity in net earnings of affiliates		**(**4.4	)			(2.4	)
Distributions from unconsolidated affiliates		3.3				0.8
Non-cash compensation expense		25.8				2.9
Other		1.0				(1.5	)
Change in assets and liabilities:
Accounts receivable		**(**2.4	)			(1.8	)
Inventories		**(**4.8	)			(63.7	)
Other current assets		0.7				3.1
Accounts payable and accrued expenses		**(**62.0	)			(95.2	)
Income taxes payable		57.7				57.6
Other operating assets and liabilities, net		1.7				(4.1	)
Net Cash Provided By Operating Activities		273.1				152.8
Cash Flow From Investing Activities
Additions to property, plant and equipment		**(**25.0	)			(15.6	)
Other		**(**4.6	)			(0.1	)
Net Cash Used In Investing Activities		**(**29.6	)			(15.7	)
Cash Flow From Financing Activities
Long-term debt (repayments)		**(**200.0	)			0.0
Short-term debt (repayments), net of borrowings		**(**55.6	)			(149.9	)
Proceeds from stock options exercised		10.2				11.0
Payment of cash dividends		**(**66.3	)			(63.7	)
Net Cash Used In Financing Activities		**(**311.7	)			(202.6	)
Effect of exchange rate changes on cash and cash equivalents		0.7				(0.7	)
**Net Change In Cash and Cash Equiva

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Recent Developments

Supply Chain, Inflation, Labor, Consumer Demand and Competition

We continue to experience some adverse supply chain related impacts to our business, including raw material and labor shortages and interruptions. These negative impacts continue to result in some difficulty meeting consumer demand, particularly related to vitamins and our STERIMAR nasal congestion relief products. In addition, these negative impacts together with significant broad-based cost inflation and higher interest rates have affected input costs and consumer behavior. While conditions are improving and we expect pricing and productivity to offset inflation in the near term, we expect some raw material and labor shortages and input cost inflation to continue.

In addition, our Specialty Products business has been negatively impacted by the entrance of new foreign competition in the United States dairy market. We expect that low-priced imports will continue to enter the market.

For additional discussion of how we are addressing meeting retail customer demand for certain categories and decreased consumer demand for discretionary brands, as well as lower growth and increased competition in the vitamin category, please refer to Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K.

Looking forward, the impact that these challenges will continue to have on our operational and financial performance will depend on future developments, including inflationary impacts, retail customers' acceptance of all or a portion of any price increases, our continued ability to obtain an adequate supply of products and materials, the spread and severity of new COVID-19 variants, and the long-term impact of vaccines. Additionally, we may be impacted by our ability to recruit and retain a workforce and engage third-parties to manufacture and distribute our products, as well as any future government actions affecting employers and employees, consumers and the economy in general. The impact of any of these potential future developments are uncertain and difficult to predict considering the rapidly evolving landscape.

We are monitoring the impact of both inflation and recessionary indicators including the effect of corresponding government actions, such as raising interest rates to counteract inflation, that may negatively impact consumer spending, and how these factors will potentially influence future cash flows for the short and long term. While we expect that many of these effects will be transitory and that our value focused portfolio positions us well in inflationary and slowing economic environments, it is impossible to predict their impact.

Results of Operations

Consolidated results

	Three Months Ended				Change vs.		Three Months Ended
	March 31, 2023				Prior Year		March 31, 2022
Net Sales	$	1,429.8			10.2%		$	1,297.2
Gross Profit	$	622.0			12.6%		$	552.5
Gross Margin		43.5	%		+90 basis points			42.6	%
Marketing Expenses	$	122.3			20.0%		$	101.9
Percent of Net Sales		8.6	%		+70 basis points			7.9	%
Selling, General & Administrative Expenses	$	207.8			22.3%		$	169.9
Percent of Net Sales		14.5	%		+140 basis points			13.1	%
Income from Operations	$	291.9			4.0%		$	280.7
Operating Margin		20.4	%		-120 basis points			21.6	%
Net income per share - Diluted	$	0.82			-1.2%		$	0.83

Net Sales

Net sales for the quarter ended March 31, 2023 were $1,429.8, an increase of $132.6 or 10.2% as compared to the same period in 2022. The components of the net sales increase are as follows:

	Three Months Ended
	March 31,
Net Sales - Consolidated	2023
Product volumes sold		(—	%)
Pricing/Product mix		5.7	%
Foreign exchange rate fluctuations		(0.7	%)
Acquired product lines (1)		5.2	%
Net Sales increase		10.2	%

(1)

On October 13, 2022, we completed the Hero Acquisition. Hero is included in our results since the date of acquisition.

For the three months ended March 31, 2023, the volume change reflects increased product unit sales in the Consumer International segment, offset by decreased product unit sales in the Consumer Domestic and the SPD segments. For the three months ended March 31, 2023, price/mix was favorable in all three segments.

Gross Profit / Gross Margin

Our gross profit was $622.0 for the three months ended March 31, 2023, a $69.5 increase as compared to the same period in 2022. Gross margin increased 90 basis points (“bps”) in the first quarter of 2023 compared to the same period in 2022, due to favorable price/mix/volume of 160 bps, the impact of productivity programs of 160 bps, business acquisition mix benefits of 120 bps, lower transportation costs of 70 bps, and favorable foreign exchange of 10 bps, offset by the impact of higher manufacturing costs, including labor, of 360 bps, and higher commodities of 70 bps.

Operating Expenses

Marketing expenses for the three months ended March 31, 2023 were $122.3, an increase of $20.4 or 20.0% as compared to the same period in 2022. Marketing expenses as a percentage of net sales in the first quarter of 2023 increased by 70 bps to 8.6% as compared to 7.9% in the same period in 2022 due to 140 bps on higher expense, as we increased marketing spend as fill rates improved, offset by 70 bps of leverage on higher net sales.

SG&A expenses were $207.8 in the first quarter of 2023, an increase of $37.9 or 22.3% as compared to the same period in 2022. SG&A as a percentage of net sales increased 140 bps to 14.5% in the first quarter of 2023 as compared to 13.1% in the same period in 2022. The increase is due to 260 bps on higher expenses, offset by 120 bps of leverage associated with higher sales. The higher expenses for the three-month period ended March 31, 2023 are primarily due to expenses related to the Hero Acquisition.

Other (income) expense, net was nominal for the three months ended March 31, 2023 and 2022.

Interest expense for the three months ended March 31, 2023 increased $12.2 to $28.8, as compared to the same period in 2022, primarily due to higher interest rates.

Income Taxes

The effective tax rate for the three months ended March 31, 2023 was 24.4%, compared to 23.2% in the same period in 2022. The increase in the tax rate is primarily due to lower stock option exercises and non-deductible compensation expense related to the restricted stock issued for the Hero Acquisition.

Segment results

We operate three reportable segments: Consumer Domestic, Consumer International and SPD. These segments are determined based on differences in the nature of products and organizational structure. We also have a Corporate segment.

Segment			Products
Consumer Domestic			Household and personal care products
Consumer International			Primarily personal care products
SPD			Specialty chemical products

The Corporate segment income consists of equity in earnings of affiliates. As of March 31, 2023, we held 50% ownership interests in each of Armand and ArmaKleen, respectively. Our equity in earnings of Armand and ArmaKleen, totaled $4.4 and $2.4 for the three months ended March 31, 2023 and 2022, respectively, and are included in the Corporate segment. Certain subsidiaries that are included in the Consumer International segment manufacture and sell personal care products to the Consumer Domestic segment. These sales are eliminated from the Consumer International segment results set forth below.

Segment net sales and income before income taxes for the three months ended March 31, 2023 and March 31, 2022 are as follows:

	Consumer				Consumer
	Domestic				International				SPD				Corporate**(3)**				Total
Net Sales**(1)**
First Quarter of 2023	$	1,116.9			$	230.6			$	82.3			$	0.0			$	1,429.8
First Quarter of 2022		995.1				214.6				87.5				0.0				1,297.2
Income before Income Taxes**(2)**
First Quarter of 2023	$	228.7			$	28.9			$	6.8			$	4.4			$	268.8
First Quarter of 2022		222.7				29.6				11.5				2.4				266.2

(1)

Intersegment sales from Consumer International to Consumer Domestic, which are not reflected in the table, were $3.6 and $4.8 for the three months ended March 31, 2023 and March 31, 2022, respectively.

(2)

In determining income before income taxes, interest expense, investment earnings and certain aspects of other income and expense were allocated among the segments based upon each segment’s relative income from operations.

(3)

Corporate segment consists of equity in earnings of affiliates from Armand and ArmaKleen for the three months ended March 31, 2023 and March 31, 2022.

Product line revenues from external customers are as follows:

	Three Months Ended
	March 31,				March 31,
	2023				2022
Household Products	$	601.6			$	520.5
Personal Care Products		515.3				474.6
Total Consumer Domestic		1,116.9				995.1
Total Consumer International		230.6				214.6
Total SPD		82.3				87.5
Total Consolidated Net Sales	$	1,429.8			$	1,297.2

Household Products include laundry, deodorizing, and cleaning products. Personal Care Products include condoms, pregnancy kits, oral care products, skin care and hair care products, cold and remedy products, and gummy dietary supplements.

Consumer Domestic

Consumer Domestic net sales in the first quarter of 2023 were $1,116.9, an increase of $121.8 or 12.2% as compared to the same period in 2022. The components of the net sales change are the following:

	Three Months Ended
	March 31,
Net Sales - Consumer Domestic	2023
Product volumes sold		(0.9	%)
Pricing/Product mix		6.4	%
Acquired product lines (1)		6.7	%
Net Sales increase		12.2	%

(1)

Hero is included in our results since the date of acquisition.

The increase in net sales for the three months ended March 31, 2023, reflects the impact of the Hero Acquisition, ARM & HAMMER® Liquid Detergent, ARM & HAMMER® Cat Litter, THERABREATH® mouth wash, and XTRA® Liquid Detergent partially offset by declines in VITAFUSION® and L’IL CRITTERS® gummy vitamins, FINISHING TOUCH FLAWLESS® Hair Removal Products, and WATERPIK® Shower Heads.

Consumer Domestic income before income taxes for the first quarter of 2023 was $228.7, an increase of $6.0 as compared to the first quarter of 2022. The increase is due primarily to favorable price/mix of $55.8 and the impact of higher sales volumes of $27.0, offset by higher SG&A expenses of $35.9, higher marketing expenses of $19.3, higher manufacturing and distribution expenses of $11.6 and higher interest and other expenses of $9.9.

Consumer International

Consumer International net sales were $230.6 in the first quarter of 2023, an increase of $16.0 or 7.5% as compared to the same period in 2022. The components of the net sales change are the following:

	Three Months Ended
	March 31,
Net Sales - Consumer International	2023
Product volumes sold		6.8	%
Pricing/Product mix		4.8	%
Foreign exchange rate fluctuations		(4.1	%)
Net Sales increase		7.5	%

Excluding the impact of foreign exchange rates, sales growth is driven by BATISTE, VITAFUSION® and L’IL CRITTERS® gummy vitamins and FEMFRESH in the Global Markets Group (“GMG”) business, BATISTE and GRAVOL in Canada, BATISTE in Australia and in Europe and ARM & HAMMER® Liquid Detergent and STERIMAR in Mexico.

Consumer International income before income taxes was $28.9 in the first quarter of 2023, an $0.7 decrease as compared to the first quarter of 2022. Higher manufacturing and commodity costs of $11.2, higher SG&A expenses of $2.5, unfavorable foreign exchange rates of $1.6, higher marketing expenses of $0.6, and higher interest and other expenses of $0.7, were partially offset by a favorable price/mix of $9.2 and the impact of higher sales volumes of $6.8.

Specialty Products (“SPD”)

SPD net sales were $82.3 in the first quarter of 2023, a decrease of $5.2 or 5.9% as compared to the same period in 2022. The components of the net sales change are the following:

	Three Months Ended
	March 31,
Net Sales - SPD	2023
Product volumes sold		(7.5	%)
Pricing/Product mix		1.6	%
Net Sales decrease		(5.9	%)

Net sales decreased in the first quarter of 2023 primarily due to competitive imports within our domestic dairy segment.

SPD income before income taxes was $6.8 in the first quarter of 2023, a decrease of $4.7 as compared to the same period in 2022, due to higher SG&A costs of $2.2, the impact of lower sales volumes of $2.1, unfavorable manufacturing costs of $0.9 and higher marketing expenses of $0.6, offset by favorable price/product mix of $1.4.

Corporate

The Corporate segment includes equity in earnings of affiliates from Armand and ArmaKleen in the three months of 2023 and 2022. The Corporate segment income before income taxes was $4.4 in the first quarter of 2023, as compared to $2.4 in the same period in 2022.

Liquidity and Capital Resources

On June 16, 2022, we entered into a credit agreement (the “Credit Agreement”) that provides for our $1,500.0 unsecured revolving credit facility (the “Revolving Credit Facility”) that matures on June 16, 2027, unless extended. The Credit Agreement replaced our prior $1,000.0 unsecured revolving credit facility maturing on March 29, 2024 that was entered into on March 29, 2018. We have the ability to increase our borrowing up to an additional $750.0, subject to lender commitments and certain conditions as described in the Credit Agreement. Borrowings under the Credit Agreement are available for general corporate purposes and are used to support our $1,500.0 commercial paper program.

As of March 31, 2023, we had $202.8 in cash and cash equivalents, and approximately $1,480.0 available through the Revolving Credit Facility and our commercial paper program. To preserve our liquidity, we invest cash primarily in government money market funds, prime money market funds, short-term commercial paper and short-term bank deposits.

In the first quarter of 2023, we repaid $200.0 of our $400.0 Term Loan due December 22, 2024 with cash on hand and commercial paper borrowings.

The current economic environment presents risks that could have adverse consequences for our liquidity. See “Unfavorable economic conditions could adversely affect demand for our products” under “Risk Factors” in Item 1A of the Form 10-K. We continue to manage all aspects of our business including, but not limited to, monitoring the financial health of our customers, suppliers and other third-party relationships, implementing gross margin enhancement strategies and developing new opportunities for growth. We do not anticipate that current economic conditions will adversely affect our ability to comply with the financial covenant in the Credit Agreement because we currently are, and anticipate that we will continue to be, in compliance with the maximum leverage ratio requirement under the Credit Agreement.

On October 28, 2021, the Board authorized a new share repurchase program, under which we may repurchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and replaced the 2017 Share Repurchase Program. The 2021 Share Repurchase Program did not modify our evergreen share repurchase program, authorized by the Board on January 29, 2014, under which we may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under its incentive plans.

As of March 31, 2023, there remains $729.7 of share repurchase availability under the 2021 Share Repurchase Program.

On February 1, 2023, the Board declared a 4% increase in the regular quarterly dividend from $0.2625 to $0.2725 per share, equivalent to an annual dividend of $1.09 per share payable to stockholders of record as of February 15, 2023. The increase raises the annual dividend payout from $255.0 to approximately $265.0.

We anticipate that our cash from operations, together with our current borrowing capacity, will be sufficient to fund our share repurchase programs, pay debt and interest as it comes due, fund dividends, and meet our capital expenditure program costs. Capital expenditures in 2023 are expected to be approximately $250.0 primarily for manufacturing capacity investments in laundry, litter and vitamins to support expected future sales growth. Cash, together with our current borrowing capacity, may be used for acquisitions that would complement our existing product lines or geographic markets.

Cash Flow Analysis

	Three Months Ended
	March 31,				March 31,
	2023				2022
Net cash provided by operating activities	$	273.1			$	152.8
Net cash used in investing activities	$	(29.6	)		$	(15.7	)
Net cash used in financing activities	$	(311.7	)		$	(202.6	)

Net Cash Provided by Operating Activities – Our primary source of liquidity is the cash flow provided by operating activities, which is dependent on net income and changes in working capital. Our net cash provided by operating activities in the first three months ended March 31, 2023 increased by $120.3 to $273.1 as compared to $152.8 in the same period in 2022 due to an improvement in working capital and an increase in cash earnings (net income adjusted for non-cash items). The improvement in working capital is primarily related to lower investment in inventory for our discretionary brands and lower incentive compensation payments in 2023. We measure working capital effectiveness based on our cash conversion cycle. The following table presents our cash conversion cycle information for the quarters ended March 31, 2023 and 2022:

	As of
	March 31, 2023				March 31, 2022				Change
Days of sales outstanding in accounts receivable ("DSO")		27				28				(1	)
Days of inventory outstanding ("DIO")		72				69				3
Days of accounts payable outstanding ("DPO")		73				80				7
Cash conversion cycle		26				17				9

Our cash conversion cycle (defined as the sum of DSO and DIO less DPO) which is calculated using a two-period average method, increased nine days from the prior year. We continue to focus on reducing our working capital requirements.

Net Cash Used in Investing Activities – Net cash used in investing activities during the first three months of 2023 was $29.6, primarily reflecting $25.0 for property, plant and equipment additions. Net cash used in investing activities during the first three months of 2022 was $15.7, primarily reflecting $15.6 for property, plant and equipment additions.

Net Cash Used in Financing Activities – Net cash used in financing activities during the first three months of 2023 was $311.7 reflecting $255.6 of net debt payments, $66.3 of cash dividend payments, partially offset by $10.2 of proceeds from stock option exercises. Net cash used in financing activities during the first three months of 2022 was $202.6, reflecting $149.9 of net debt payments and $63.7 of cash dividend payments, partially offset by $11.0 of proceeds from stock option exercises.

Market risk

For quantitative and qualitative disclosures about market risk affecting the Company, see “Quantitative and Qualitative Disclosures About Market Risk” in Item 7A of Part II in the Form 10-K.

a) Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) at the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, are effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission (the “Commission”), and (ii) accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding the disclosure.

b) Change in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurring during the Company’s most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

This report contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; the impact of the COVID-19 pandemic and the Company’s response; gross margin changes; trade, marketing and SG&A spending; marketing expense as a percentage of net sales; sufficiency of cash flows from operations; earnings per share; the impact of new accounting pronouncements; cost savings programs; recessionary conditions; interest rates; inflation; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the decline of condom usage; the Company’s hedge programs; the impact of foreign exchange, and commodity price fluctuations; impairments and other charges; the Company’s investments in joint ventures; the impact of acquisitions (including earn-outs) and divestitures; capital expenditures; the Company’s effective tax rate; the impact of tax audits; tax changes; the effect of the credit environment on the Company’s liquidity and capital resources; the Company’s fixed rate debt; compliance with covenants under the Company’s debt instruments; the Company’s commercial paper program; the Company’s current and anticipated future borrowing capacity to meet capital expenditure program costs; the Company’s share repurchase programs; payment of dividends;

environmental and regulatory matters; the availability and adequacy of raw materials, including trona reserves and the conversion of such reserves; and the customers and consumer acceptance of certain ingredients in our products. Other forward-looking statements in this report are generally identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events), including those relating to the outbreak of contagious diseases; other impacts of the COVID-19 pandemic and its impact on the Company’s operations, customers, suppliers, employees, and other constituents, and market volatility and impact on the economy (including contributions to recessionary conditions), resulting from global, nationwide or local or regional outbreaks or increases in infections, new variants, and the risk that the Company will not be able to successfully execute its response plans with respect to the pandemic or localized outbreaks and the corresponding uncertainty; the impact of regulatory changes or policies associated with the COVID-19 pandemic, including continuing or renewed shutdowns of retail and other businesses in various jurisdictions; the impact of new legislation such as the U.S. CARES Act, the EU Medical Device Regulation, new cosmetic and device regulations in Mexico, and the U.S. Modernization of Cosmetic Regulation Act; the impact on the global economy of the Russia/Ukraine war, including the impact of export controls and other economic sanctions; potential recessionary conditions or economic uncertainty; the impact of continued shifts in consumer behavior, including accelerating shifts to on-line shopping; unanticipated increases in raw material and energy prices, including as a result of the Russia/Ukraine war or other inflationary pressures; delays and increased costs in manufacturing and distribution; increases in transportation costs; labor shortages; the impact of price increases for our products; the impact of inflationary conditions; the impact of supply chain and labor disruptions; the impact of severe or inclement weather on raw material and transportation costs; adverse developments affecting the financial condition of major customers and suppliers; competition; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space or on-line share of private label and retailer-branded products or other changes in the retail environment; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; the Company’s borrowing capacity and ability to finance its operations and potential acquisitions; higher interest rates; foreign currency exchange rate fluctuations; implications of the United Kingdom’s withdrawal from the European Union; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs; increased or changing regulation regarding the Company’s products and its suppliers in the United States and other countries where it or its suppliers operate; market volatility; issues relating to the Company’s information technology and controls; the impact of natural disasters, including those related to climate change, on the Company and its customers and suppliers, including third party information technology service providers; integrations of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment in the countries where we do business.

The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the United States federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission (the “Commission”).

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

General

The Company, in the ordinary course of its business, is subject of, or party to, various pending or threatened legal actions, government investigations and proceedings from time to time, including, without limitation, those relating to commercial transactions, product liability, purported consumer class actions, employment matters, antitrust, environmental, health, safety and other compliance related matters. Such proceedings are subject to many uncertainties and the outcome of certain pending or threatened legal actions may not be reasonably predictable and any related damages may not be estimable. Certain legal actions could result in an adverse outcome for us, and any such adverse outcome could have a material adverse effect on our business, financial condition, results of operations, and cash flows.

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Item 1A, “Risk Factors” in the Form 10-K, which could materially affect the Company’s business, financial condition or future results.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company repurchases shares of its Common Stock from time to time pursuant to its publicly announced share repurchase programs.

On October 28, 2021, the Board authorized a new share repurchase program under which the Company may purchase up to $1,000.0 in shares of Common Stock (the “2021 Share Repurchase Program”). The 2021 Share Repurchase Program does not have an expiration and replaces the Company’s 2017 Share Repurchase Program. The 2021 Share Repurchase Program does not modify the Company’s evergreen share repurchase program, authorized by the Board on January 29, 2014, under which the Company may repurchase, from time to time, Common Stock to reduce or eliminate dilution associated with issuances of Common Stock under its incentive plans.

As a result of the Company’s recent stock repurchases, there remains $729.7 of share repurchase availability under the 2021 Share Repurchase Program as of March 31, 2023.

ITE****M 6. EXHIBITS

Exhibit Index

		(3.1)		Amended and Restated Certificate of Incorporation of the Company, incorporated by reference to Exhibit 3.1 to the Company’s quarterly report on Form 10-Q filed on June 30, 2020.
		(3.2)		Amendment to the Company’s Amended and Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on April 30, 2021.
		(3.3)		By-laws of the Company, amended and restated as of December 23, 2022, incorporated by reference to Exhibit 3.1 to the Company’s current report on Form 8-K filed on December 23, 2022.
		(10.1)		Form of Restricted Stock Unit Agreement, incorporated by reference to Exhibit 10.1 to the Company’s current report on Form 8-K filed on February 6, 2023.
		(10.2)		Form of Performance Stock Unit Agreement, incorporated by reference to Exhibit 10.2 to the Company’s current report on Form 8-K filed on February 6, 2023.
		(10.4)		Amended and Restated Compensation Plan for Directors, dated February 1, 2023, incorporated by reference to Exhibit 10.14 to the Company’s Annual report on Form 10-K filed on February 16, 2023.
		(31.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.
		(31.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act.
		(32.1)		Certification of the Chief Executive Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.
		(32.2)		Certification of the Chief Financial Officer of the Company pursuant to Rule 13a-14(b) under the Exchange Act and 18 U.S.C. Section 1350.
		(101.INS)		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
		(101.SCH)		Inline XBRL Taxonomy Extension Schema Document.
		(101.CAL)		Inline XBRL Taxonomy Extension Calculation Linkbase Document.
		(101.DEF)		Inline XBRL Taxonomy Extension Definition Linkbase Document.
		(101.LAB)		Inline XBRL Taxonomy Extension Label Linkbase Document.
		(101.PRE)		Inline XBRL Taxonomy Extension Presentation Linkbase Document.
		(104)		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

Indicates documents filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

				CHURCH & DWIGHT CO., INC.
				(REGISTRANT)
DATE:		April 27, 2023		/s/ Richard A. Dierker
				RICHARD A. DIERKER
				Executive Vice President
				and Chief Financial Officer
				(Principal Financial Officer)
DATE:		April 27, 2023		/s/ Joseph J. Longo
				JOSEPH J. LONGO
				VICE PRESIDENT AND
				CONTROLLER
				(PRINCIPAL ACCOUNTING OFFICER)