-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Q4KHdHHzKDzqUm6BY80cBnd2id18XNAxS0eQtOW4JCbisFp3pZIf6a8h2wZLtmU/ 33bhO4O/fXqICPQ2nmG4Kw== 0000012654-96-000005.txt : 19960216 0000012654-96-000005.hdr.sgml : 19960216 ACCESSION NUMBER: 0000012654-96-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960213 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BLOCK DRUG CO INC CENTRAL INDEX KEY: 0000012654 STANDARD INDUSTRIAL CLASSIFICATION: PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS [2844] IRS NUMBER: 221375645 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06436 FILM NUMBER: 96516485 BUSINESS ADDRESS: STREET 1: 257 CORNELISON AVE CITY: JERSEY CITY STATE: NJ ZIP: 07302 BUSINESS PHONE: 2014343000 MAIL ADDRESS: STREET 1: 257 CORNELISON AVENUE CITY: JERSEY CITY STATE: NJ ZIP: 07302 10-Q 1 BLOCK DRUG CO.FORM 10-Q, 3 MONTHS ENDED12/31/95 SECURITIES AND EXCHANGE COMMISSSION WASHINGTON, D.C. 20549 _________________________________ Form 10-Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the Three Months Ended Commission File number 0-6436 December 31, 1995 _________________________BLOCK DRUG COMPANY, INC._________________________ (Exact name of registrant as specified in its charter) ___New Jersey_________________________________________________22-1375645__ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 257 Cornelison Avenue, Jersey City, N.J._______________________07302______ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (201) 434-3000 Indicate by check mark whether the registrant (1) has filed all Commission reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant is required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. YES_X__ NO_____ Indicate the number of shares outstanding of each of the issuer's classes of Common Stock, as of the close of the period covered by this report. _____Class______________ Outstanding_at_December 31,_1995 Common Stock - Class A 12,498,016 Common Stock - Class B 7,704,400 1 BLOCK DRUG COMPANY, INC. INDEX TO FORM 10-Q DECEMBER 31, 1995 ____________________________ Part I - Financial Information - Unaudited Page No. Consolidated Balance Sheets - December 31, 1995 and March 31, 1995 2 Consolidated Statements of Income for the three and nine months ended December 31, 1995 and 1994 3 Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 1995 and 4 and 1994. Notes to Consolidated Financial Statements 5 Management's Discussion and Analysis of Operating Results and Financial Condition 6 - 7 Part II - Other Information 8 2 BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(Unaudited) ASSETS __12/31/95__ __03/31/95__ Current Assets: Cash $ 12,646,000 $ 13,706,000 Marketable securities,at market 20,635,000 24,061,000 Accounts receivable, less allowances of $3,129,000 (12/31/95) and $3,222,000 (3/31/95) 112,372,000 114,656,000 Inventories: Raw & packaging materials 39,621,000 41,033,000 Finished goods 79,944,000 72,386,000 Other current assets ___39,407,000 __30,045,000 Total Current Assets 304,625,000 295,887,000 Property,plant and equipment, less accumulated depreciation of $112,382,000 (12/31/95) and $98,549,000 (3/31/95) 237,855,000 229,446,000 Long term securities at market 231,210,000 260,076,000 Goodwill and other intangible assets- net of amortization 71,064,000 64,040,000 Other assets ___26,239,000 __21,871,000 Total Assets $870,993,000 $871,320,000 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes and bonds payable $ 71,800,000 $155,591,000 Accounts payable & accrued expenses 96,622,000 101,952,000 Income taxes payable 10,003,000 8,884,000 Dividends payable ____4,394,000 __3,365,000 Total Current Liabilities 182,819,000 269,792,000 Notes and bonds payable 18,427,000 15,273,000 Deferred compensation and other payables 10,131,000 10,638,000 Deferred income taxes ___16,318,000 _13,086,000 Total Liabilities __227,695,000 308,789,000 Shareholders' Equity: Class A Common stock, non-voting, par value $.10-15,000,000 shares authorized, 12,498,016 (12/31/95) and 12,466,172 (3/31/95) shares issued and outstanding 1,250,000 1,247,000 Class A Common stock distributable 61,000 Class B Common stock par value $.10- 30,000,000 shares authorized, 7,704,400 (1995 & 1994) shares issued and outstanding 770,000 770,000 Capital in excess of par value 218,859,000 194,426,000 Retained earnings 414,094,000 367,325,000 Cumulative foreign currency translation adjustment 46,000 (3,054,000) Unrealized holding gain on marketable securities ___8,218,000 _ 1,817,000 Total Shareholders' Equity _643,298,000 _562,531,000 Total Liabilities & Shareholders' Equity $870,993,000 $871,320,000 ============= ============
-2- See notes to consolidated financial statements. 3 BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED) THREE_MONTHS_ENDED NINE_MONTHS_ENDED DECEMBER_31, DECEMBER_31, _1995_____________1994____ _______1995________1994___ Revenues: Net sales $174,351,000 $148,676,000 $525,395,000 $450,380,000 Interest, dividends and other income ___6,557,000 ___5,509,000 __23,171,000 __17,831,000 _180,908,000 _154,185,000 _548,566,000 _468,211,000 Cost and Expenses: Cost of goods sold 58,090,000 46,080,000 172,431,000 144,599,000 Selling, general and administrative _105,406,000 __94,705,000 _324,619,000 _281,520,000 _ 163,496,000 _140,785,000 _497,050,000 _426,119,000 Income from continuing operations before income taxes 17,412,000 13,400,000 51,516,000 42,092,000 Income taxes __4,325,000 ___2,475,000 11,282,000 __9,013,000 Income from continuing operations _13,087,000 __10,925,000 _40,234,000 __33,079,000 Dicontinued operations(Note 2) Income from disconti- nued operations net of taxes of$32,000(1995) and $1,530,000(1994) 1,295,000 52,000 3,446,000 Gain(loss) on sale of Division,net of taxes of $25,568,000(1995) (1,241,000) 41,716,000 ----------- ---------- ---------- ---------- Income (loss)from discontinued operations (1,241,000) 1,295,000 41,768,000 3,446,000 ------------ ----------- ---------- ---------- Net Income $11,846,000 $12,220,000 $82,002,000 $36,525,000 ============= =========== =========== ========== Average number of shares outstanding 20,801,205 20,757,915 20,790,688 20,747,507 ------------- ---------- ---------- --------- Net income per share: From continuing opearations $ 0.63 $ 0.53 $ 1.94 $ 1.59 From discontinued operations (0.06) 0.06 2.00 0.17 ----------- ---------- ----------- ----------- Net income per share $ 0.57 $ 0.59 $ 3.94 $ 1.76 =========== ========== ============ =========== Cash dividends per share Class A $ 0.29 $ 0.27 $ 0.83 $ 0.79 Class B $ 0.10 $ 0.20
-3- See notes to consolidated financial statements 4 BLOCK DRUG COMPANY INC.AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED DECEMBER 31
___1995_________1994____ CASH_FLOW_FROM_OPERATING_ACTIVITIES $ 8,580,000 $ 42,791,000 CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sale of business segment 80,000,000 Additions to property, plant & equipment (21,989,000) (22,192,000) Proceeds from sales of long-term securities 67,986,000 25,750,000 Purchases of long-term securities (25,858,000) (14,752,000) Increase in marketable securities (1,105,000) (3,267,000) Payments for products acquired (16,682,000) (40,630,000) -------------- ----------- Net Cash Provided by(used in)Investing Activities 82,352,000 (55,091,000) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of debt 3,154,000 Dividends paid to shareholders (11,903,000) (9,366,000) Payments of notes payable (935,000) (3,198,000) (Decrease)increase in short-term debt,net (82,856,000) 27,709,000 ------------ ------------ Net Cash (Used in) provided by Financing Activities (92,540,000) 15,145,000 Effect of exchange rates on cash ____548,000 ____809,000 (Decrease)Increase in Cash (1,060,000) 3,654,000 Cash, Beginning of Period __13,706,000 __8,896,000 Cash, End of Period $ 12,646,000 $12,550,000 ============ =========== SUPPLEMENTAL CASH FLOW DATA Cash paid during the year: Interest $ 8,555,337 $ 5,748,037 Income taxes $ 33,805,317 $ 11,924,675 Supplemental schedule of non-cash financing and investing activities 3% Stock dividend $ 23,330,000 $ 19,813,000
-4- See notes to consolidated financial statements. 5 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. In the opinion of management, the accompanying consolidated financial statements include all adjustments (consisting of only normal recurring adjustments) necessary for a fair presentation of the data for the interim periods. 2. During the quarter,the Company acquired Nature's Remedy laxative brand for U.S. and Canadian business and Setlers antacid brand for U.K. from SmithKline Beecham, and the Parodontax line of Oral hygiene products was purchased from Madaus AG for European,Asian and Latin American markets. Had these aquisitions occrued as of the beginning of the period,they would not have had a significant effect on the operating results of the Company. 3. During the quarter,the Company signed an agreement to terminate its joint venture agreement in Japan with Kobayashi.Under the agreement,the shares in joint venture company owned by Kobayashi will be retired,in April 1996,giving the Company sole ownership at that time. 4. During the nine months ended December 31, 1995, the Company reduced its net borrowings by $ 80,637,000 mainly from lines of credit from various banks bearing interest at variable rates. 5. In January 1996 the Company acquired the Lava bar soap brand from Procter & Gamble. -5- 6 BLOCK DRUG COMPANY, INC. & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION OPERATING RESULTS Sales of $174 million in the third quarter and $525 million in the nine months ended December 31, 1995 were 17% above sales for the comparable prior periods. Foreign sales increased 13% for the quarter and 17% for the nine month period. Stated in local currency,sales for the quarter increased 9% and 10% for the nine month period. Domestic sales were higher both in the quarter and 9 months due to selected price increases and unit gains primarily in Consumer Products Segment. Interest, dividends and other income increased for the nine month period from the comparable year-ago period due to investment in Block/Kobyashi Joint- Venture and a co-promotion arrangement in Dental Products Segment. The costs of goods sold percentage to sales 32.8% and 32.1% in the first nine months of the current and prior year respectively. These percentages were affected by selective price increases, mix of products sold in addition to improved manufacturing operations. Selling, general and administrative expenses, most of which are related to advertising and promotional activities, were 61.7% of sales in the first nine months of the current year, compared to 62.5% in the prior period. These expenses reflect a major spending program to meet significant competition and build brand equities. Due to the above factors, pretax income was 9.8% of sales in the first nine months of the current period compared to 9.3% in the comparable prior year period. The effective income tax rate of 21.9% and 21.4% in the first nine months of the current and prior year, respectively, reflect tax-exempt interest from government securities and income from the lower tax areas of Puerto Rico and Ireland. The Company has realigned its business strategy during the past 12 months, renewing its focus on marketing and manufacturing of its core business segments; dental, consumer and household products. This fundamental change in strategy led to the divestiture of the Reed & Carnrick pharmaceutical division and the subsequent purchase of a number of key brands in support of core segments. In January, 1996 the Company acquired the Lava bar soap brand from Procter and Gamble. During the third quarter, the Naure's remedy laxative brand in the United States and the Setlers Antacid brand in the UK were acquired from SmithKline Beecham; and the Parodontax line of oral hygiene products was purchased from Madaus AG for European, Asian and Latin American markets. -6- 7 In another strategic move in the third quarter, the Company signed an agreement to terminate its joint venture agreement in Japan with Kobayashi and will acquire sole ownership of the Joint Venture Company in April, 1996. The Company is desirous of becoming more involved in the day to day management of the business in Japan which represents a significant portion of the Company's international operations in over-the-counter oral care products. Also during the past year, the Company entered into an agreement with U.S. Biomaterials Corporation for the marketing and selling of PerioGlas brand dental implant material to dental professionals. the PerioGlas material is indicated for the treatment of intrabony defects caused by periodontal disease. This product is detailed to dentists through the Company's Dental Consultants. Detailing, advertising and telemarketing of PerioGlas commenced in the third fiscal quarter. Other product line acquisitions completed during the past twelve months as part of the strategic realignment include the Goody's brand of headache powders from Goody's Pharmaceuticals, Inc. and the Carpet Fresh and Neutra-Air brands of carpet fresheners from Reckitt & Colman. FINANCIAL_CONDITION Cash decreased for the nine months ended December 31, 1995 to $12.6 million from $13.7 million at year-end March 31, 1995. The decrease resulted primarily from the reduction in debt, payment for products acquired and increases in capital expenditures,partially offset by the proceeds from the sale of business segment and net sales of securities. In the prior year nine months cash increased to $12.6 million from $8.9 million at year-end March 31, 1994. The net increase resulted primarily from a positive cash flow from operating activities, an increase in accrued expenses and higher short-term borrowings. This effect was partially offset by increases in goodwill and other intangible assets, capital expenditures and inventories. The increase in goodwill and other intangible assets and short-term borrowings were mainly due to the Goody's acquisition. -7- 8 PART II. OTHER INFORMATION Item 6.__________Exhibits and Reports on Form 8K___________ (b) Reports on Form 8K - there were no reports on Form 8K for the three months ended December 31, 1995. _____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. __BLOCK_DRUG_COMPANY,_INC.__ (Registrant) 1-30-96 MELVIN KOPP ________________ ______________________________ DATE Melvin Kopp Senior Vice President & Chief Financial Officer -8- 9 EX-27 2
5 1000 9-MOS MAR-31-1996 DEC-31-1995 12646 20635 115501 3129 119565 304625 350237 112382 870993 182819 0 2020 0 0 641278 870993 525395 548566 172431 172431 317527 0 7092 51516 11282 40234 41768 0 0 82002 3.94 3.94
-----END PRIVACY-ENHANCED MESSAGE-----