Company: CLX
Filing Date: 2025-11-03
Form Type: 10-Q
Source: 0000021076-25-000053
Chunk: 30

Company: CLOROX CO /DE/
Filing Date: 2025-11-03
Form: 10-Q
Item: Part I, Item 1
Chunk 30
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 a consistent basis by removing the impact of the items that management believes does not directly reflect the performance of each segment's underlying operations. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management. Adjusted EBIT margin is the ratio of adjusted EBIT to net sales.

Reconciliation of earnings before income taxes to adjusted EBITThree months ended9/30/20259/30/2024Earnings before income taxes$107 $177 Interest income(2)(3)Interest expense23 21 Loss on divestiture (1)— 118 Cyberattack costs, net of insurance recoveries (2)— (10)Digital capabilities and productivity enhancements investment (3)32 29 Adjusted EBIT$160 $332 

(1)Represents the loss related to the divestiture of the Better Health VMS business.  

(2)Represents incremental costs and insurance recoveries related to the cyberattack.

(3)Represents expenses related to the Company's digital capabilities and productivity enhancements investment. 

27

NON-GAAP FINANCIAL MEASURES (Continued)

Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, will cease at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the Company's underlying operating performance, the Company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the Company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management. 

Of the total investment, approximately 75% is expected to represent incremental operating costs primarily recorded within selling and administrative expenses to be adjusted from reported earnings before income taxes for purposes of disclosing adjusted EBIT through fiscal year 2026. About 70% of these operating costs are expected to be related to the implementation of the ERP, with the remaining costs primarily related to the implementation of complementary technologies.

During the three months ended September 30, 2025 and 2024, the Company incurred approximately $32 and $29, respectively, of operating expenses related to its digital capabilities and productivity enhancements investment. The expenses relate to the following:

Three months ended9/30/202