-----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, AMHgB6GBdwYAmlHLZJaJ7RbBq6RpTQ/xdjyEYK0OGaoRdHHEAkEs+pC9Ie0PQapX yi+T3yc6mYXxM38ImN713Q== 0000012654-97-000002.txt : 19970222 0000012654-97-000002.hdr.sgml : 19970222 ACCESSION NUMBER: 0000012654-97-000002 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970212 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: 97527496 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,INC.FORM 10-Q,3MONTHS ENDED 12/31/96 SECURITIES AND EXCHANGE COMMISSION 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, 1996 _________________________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,_1996 Common Stock - Class A 13,140,938 Common Stock - Class B 7,704,400 1 BLOCK DRUG COMPANY, INC. INDEX TO FORM 10-Q DECEMBER 31, 1996 ____________________________ Part I - Financial Information - Unaudited Page No. Consolidated Balance Sheets - December 31, 1996 and March 31, 1996 2 Consolidated Statements of Income for the three and nine months ended December 31, 1996 and 1995 3 Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 1996 and 4 and 1995. 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 __12/31/96__ __03/31/96__ Current Assets: Cash $ 23,308,000 $ 16,388,000 Marketable securities,at market 35,054,000 13,433,000 Accounts receivable, less allowances of $4,461,000 (12/31/96) and $4,188,000 (3/31/96) 135,077,000 124,816,000 Inventories: Raw & packaging materials 47,686,000 42,868,000 Finished goods 98,657,000 81,500,000 Other current assets ___67,367,000 __33,200,000 Total Current Assets 407,149,000 312,205,000 Property,plant and equipment, less accumulated depreciation of $121,451,000 (12/31/96) and $114,724,000 (3/31/96) 253,251,000 242,552,000 Long term securities at market 208,476,000 222,667,000 Goodwill and other intangible assets- net of amortization 150,980,000 127,047,000 Other assets ___ 4,170,000 __24,646,000 Total Assets $1,024,026,000 $929,117,000 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes and bonds payable $108,069,000 $75,559,000 Accounts payable & accrued expenses 141,785,000 118,273,000 Income taxes payable 14,549,000 7,751,000 Dividends payable ____4,901,000 __4,572,000 Total Current Liabilities 269,304,000 206,155,000 Notes and bonds payable 59,090,000 56,143,000 Deferred compensation and other payables 15,164,000 15,364,000 Deferred income taxes ___11,358,000 _10,413,000 Total Liabilities __354,916,000 288,075,000 Shareholders' Equity: Class A common stock, non-voting, par value $.10-15,000,000 shares authorized, 13,140,938 (12/31/96) and 13,111,962 (3/31/96) shares issued and outstanding 1,314,000 1,311,000 Class A common stock distributable 40,000 Class B common stock par value $.10- 30,000,000 shares authorized, 7,704,400 (1996 & 1995) shares issued and outstanding 770,000 770,000 Class B common stock distributable 23,000 Capital in excess of par value 246,868,000 219,207,000 Retained earnings 420,528,000 416,200,000 Cumulative foreign currency translation adjustment (3,313,000) (2,476,000) Unrealized holding gain on marketable securities ____2,880,000 _ 6,030,000 Total Shareholders' Equity __669,110,000 _641,042,000 Total Liabilities & Shareholders' Equity $1,024,026,000 $929,117,000 ============= ============
-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, _1996_____________1995____ _______1996________1995___ Revenues: Net sales $216,409,000 $174,351,000 $625,439,000 $525,395,000 Interest, dividends and other income ___9,431,000 ___6,557,000 __23,676,000 __23,171,000 _225,840,000 _180,908,000 _649,115,000 _548,566,000 Cost and Expenses: Cost of goods sold 71,335,000 58,090,000 199,370,000 172,431,000 Selling, general and administrative _135,353,000 _105,406,000 _387,202,000 _324,619,000 _ 206,688,000 _163,496,000 _586,572,000 _497,050,000 Income from continuing operations before income taxes 19,152,000 17,412,000 62,543,000 51,516,000 Income Taxes __2,922,000 ___4,325,000 15,636,000 11,282,000 Income from continuing operations _16,230,000 __13,087,000 _46,907,000 __40,234,000 Discontinued operations(Note 2) Income from disconti- nued operations net of taxes of $32,000(1995) 52,000 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) 41,768,000 ------------ ----------- ---------- ---------- Net income $16,230,000 $11,846,000 $46,907,000 $82,002,000 ============= =========== =========== ========== Average number of shares outstanding 21,464,135 21,425,241 21,454,158 21,414,409 ------------- ---------- ---------- ---------- Earnings per share: From continuing operations $ 0.76 $ 0.61 $ 2.19 $ 1.88 From discontinued operations (0.06) 1.95 ----------- ----------- ----------- ---------- Net earnings $ 0.76 $ 0.55 $ 2.19 $ 3.83 =========== ========== ============ =========== Cash dividends per share Class A $ 0.31 $ 0.29 $ 0.89 $ 0.83 Class B $ 0.1075 $ 0.10 $ 0.3075 $ 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 _____1996_________1995____ CASH_FLOW_FROM_OPERATING_ACTIVITIES $ 46,463,000 $ 8,580,000 CASH FLOW FROM INVESTING ACTIVITIES Proceeds from sale of business segment 80,000,000 Additions to property, plant & equipment (30,544,000) (21,989,000) Proceeds from the sale of property 5,200,000 Proceeds from sales of long-term securities 47,200,000 67,986,000 Purchases of long-term securities (31,981,000) (25,858,000) (Increase) in marketable securities (23,326,000) (1,105,000) Payment for products acquired (27,525,000) (16,682,000) -------------- ----------- Net cash (used in) provided by investing activities (60,976,000) 82,352,000 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issuance of debt 2,947,000 3,154,000 Dividends paid to shareholders (14,052,000) (11,903,000) Payments of notes payable (5,625,000) (935,000) Increase (decrease) in short-term debt 38,135,000 (82,856,000) ------------ ------------ Net cash provided by (used in) financing activities 21,405,000 (92,540,000) Effect of exchange rates on cash ____ 28,000 ____548,000 Increase (decrease) in cash 6,920,000 (1,060,000) Cash, Beginning of period __16,388,000 __13,706,000 Cash, end of period $ 23,308,000 $12,646,000 ============ =========== SUPPLEMENTAL CASH FLOW DATA Cash paid during the year: Interest $ 6,694,133 $ 8,555,337 Income taxes $ 14,791,092 $ 33,805,317 SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES 3% Stock Dividend $ 28,465,000 $ 23,330,000
-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 nine months ended December 31,1996, the Company increased its net borrowings by $ 35,457,000 mainly from lines of credit from various banks bearing interest at variable rates. 3. During the quarter the Company purchased Atrisorb, a guided tissue regeneration product for the treatment of periodontal disease from Atrix Laboratories,Inc. The Company also signed an agreement and exercised its option for the exclusive worldwide license to Targon mouthwash from Jeffrey Mitchell Laboratories,Inc. 4. Subsequent event: On February 5,1997 the Company announced it will consolidate its manufacturing operations by closing six of its twelve production facilities in various parts of the world. The cost of restructuring and re-engineering will be approximately $70 million. -5- 6 BLOCK DRUG COMPANY, INC. & SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL CONDITION OPERATING RESULTS Consolidated world wide net sales of $216 million in the third quarter and $625 million in the nine month ended December 31, 1996 were 24% and 19% respectively above sales for the comparable prior periods. Foreign sales increased 36% for the quarter and 30% for the nine month period due mainly to new products and inclusion of Japanese operations as a wholly-owned subsidiary. Stated in local currency foreign sales for the quarter increased 42% and 36% for the nine month period. Domestic sales were higher due to selective price increases and unit gains in the consumer products segment. Interest, dividends and other income for the nine month period was comparable with the year-ago period. Other income increased in the quarter due to gain on sale of marketable securities to help finance product line acquisitions. The cost of goods sold percent to sales for the first nine months of the current year was 31.9% compared with 32.8% in the prior period. The decrease was due to improved manufacturing operations and mix of products sold, in addition to selective price increases. Selling, general and administrative expenses, most of which are related to advertising and promotional activities were 61.9% and 61.8% respectively for the current and prior nine month period. These expenses reflect a major spending program to meet significant competition and build brand equities. Due to the above factors, income before taxes was 10.0% in the first nine months of the current year compared to 9.8% in the comparable prior year period. The effective income tax rates of 25.0% and 21.9% 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 increase in the current nine month period is due primarily to the effects of accounting for the Company's Japanese operation as a wholly-owned subsidiary following the termination of its joint venture in Japan. - 6 - 7 On February 5, 1997 the Company announced it will consolidate its manufacturing operations by closing six of its twelve production facilities in various parts of the world. This action is expected to generate approximately $25 million in additional annual cost savings which will be reinvested to support the Company's brands, recent acquisitions and new products as well as strengthen its presence in major markets and enable the Company to penetrate new geographic areas worldwide. The Company plans to take a pre-tax charge of approximately $70 million in the fourth fiscal quarter to cover the costs of restructuring and re- engineering. Financial Condition Cash increased for the nine month period ended December 31, 1996 to $23.3 million from $16.4 million at year-end March 31, 1996. The increase resulted primarily from an increase in accounts payable and short-term debt partially offset by payment for products acquired and increases in capital expenditures. In the prior year nine months cash decreased to $12.6 million from $13.7 million at year-end March 31, 1996. 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. -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, 1996. _____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) 2-6-97 MELVIN KOPP ________________ ______________________________ DATE Melvin Kopp Senior Vice President & Chief Financial Officer -8- 9 EX-27 2
5 1000 9-MOS MAR-31-1997 DEC-31-1996 23308 35054 139538 4461 146343 407149 374702 121451 1024026 269304 0 0 0 2084 0 1024026 625439 649115 199370 199370 379925 0 7277 62543 15636 46907 0 0 0 46907 2.19 2.19
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