Venezuela Takes Over Clorox Venezuela's Plants; Clorox Reaffirms FY15 Outlook

(RTTNews) - Clorox Co. (CLX) said that the Venezuelan government has occupied the Santa Lucía and Guacara production facilities of Corporación Clorox de Venezuela S.A. or Clorox Venezuela.

To protect the community, Clorox Venezuela had safely secured the plants in complete shut-down mode prior to its exit, including removal of all chlorine and lock-down of equipment. The Venezuelan government's actions raise grave concerns, and Clorox and its affiliates cannot be responsible for the safety of workers and the surrounding communities or any liability or damages resulting from this occupation.

The company noted that Clorox Venezuela is prepared to engage in conversations with the Venezuelan government regarding prompt, adequate and effective compensation.

On September 22, 2014, The Clorox Company said that Clorox Venezuela was no longer viable. As a result, Clorox Venezuela immediately discontinued its operations, and announced it is seeking to sell its assets. While Clorox Venezuela would have preferred to maintain its business in Venezuela and continue supplying its products to the Venezuelans, given the operating restrictions imposed by the Venezuelan government, considerable economic uncertainty, continual supply disruptions, and without significant and ongoing price increases as well as other remedial actions, Clorox Venezuela anticipated considerable operating losses would continue into the foreseeable future.

Based on the Venezuelan government's representations, Clorox Venezuela had expected significant price increases would be forthcoming much earlier this year. However, price increases subsequently approved by the government were nowhere near sufficient and would have caused Clorox Venezuela to continue operating at a significant loss.

The Clorox Company, Clorox Spain S.L., and their respective affiliates had initiated an expedited sale process to facilitate a swift transition of the Clorox Venezuela assets to a new owner. The Venezuelan government had been advised of this expedited sales process.

The Clorox Company confirmed fiscal 2015 outlook for sales and earnings per share from continuing operations.

The company's fiscal 2015 financial outlook continues to anticipate sales from continuing operations to be about flat and diluted earnings per share from continuing operations to be in the range of $4.35-$4.50, and is not impacted by the takeover of these assets in Venezuela. Analysts polled by Thomson Reuters expect the company to report earnings of $4.42 per share and revenues of $5.59 billion for fiscal 2015. Analysts' estimates typically exclude special items.

Clorox Venezuela began operations in 1990 with distribution of the Pine-Sol brand. It subsequently acquired Mistolín cleaners and the Nevex brand. The business also produced cleaning utensils under brand names such as Bon Bril, Marlene and Lustrillo. Facilities include two administrative offices in Caracas, two manufacturing sites in Santa Lucía and a third manufacturing facility in Guacara.