-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, CsWw4oO35lF6G6kBFKnG9ovqp1kHRTSiDcn4orOLfaQ/+pIdW4JNivapfG0sEuZi OzHz5zwQrw4IcLC1JejaMQ== 0000018000-94-000001.txt : 19940128 0000018000-94-000001.hdr.sgml : 19940128 ACCESSION NUMBER: 0000018000-94-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940127 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CARTER WALLACE INC /DE/ CENTRAL INDEX KEY: 0000018000 STANDARD INDUSTRIAL CLASSIFICATION: 2834 IRS NUMBER: 134986583 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 001-05910 FILM NUMBER: 94503195 BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2123395000 10-Q 1 3RD QTR FORM 10Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarter ended December 31, 1993 ( ) Transition Report Pursuant to Section 13 or 15 (d) of the Securities Act of 1934 For the transition period from to Commission File Number 1-5910 CARTER-WALLACE, INC. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - (Exact name of registrant as specified in its charter) Delaware 13-4986583 (State or other jurisdiction of (IRS Employer Identification No.) incorporation or organization) 1345 Avenue of the Americas New York, New York 10105 (Address of principal executive offices) Registrant's telephone number, including area code: 212-339-5000 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 12 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 X No The number of shares of the registrant's Common Stock and Class B common stock outstanding at December 31, 1993 were 33,442,000 and 12,634,000, respectively. CARTER-WALLACE, INC. AND SUBSIDIARIES INDEX TO FORM 10-Q DECEMBER 31, 1993 PART I - FINANCIAL INFORMATION Item 1 - Financial Statements Condensed Consolidated Statements of Earnings for the three months and nine months ended December 31, 1993 and 1992 1 Condensed Consolidated Balance Sheets at December 31, 1993 and March 31, 1993 2 Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 1993 and 1992 3 Notes to Condensed Consolidated Financial Statements 4 Report by KPMG Peat Marwick on their Limited Review 7 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II - OTHER INFORMATION Item 1 - Legal Proceedings 13 Item 6 - Exhibits and Reports on Form 8-K 13 Signatures 14 PART I - FINANCIAL INFORMATION CARTER-WALLACE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (Unaudited)
Three Months Ended Nine Months Ended December 31, December 31, 1993 1992 1993 1992 Revenues: Net sales $176,459,000 $159,640,000 $489,475,000 $484,150,000 Income from licensing agreement - - - 10,000,000 Other revenues 1,125,000 1,345,000 3,697,000 4,171,000 177,584,000 160,985,000 493,172,000 498,321,000 Cost and expenses: Cost of goods sold 57,098,000 54,255,000 168,020,000 165,374,000 Advertising, marketing & other selling expenses 66,261,000 55,740,000 196,946,000 179,643,000 Research & development expenses 14,405,000 12,388,000 39,079,000 36,839,000 General, administrative & other expenses 20,624,000 18,835,000 59,638,000 57,893,000 Interest expense 516,000 415,000 1,535,000 1,551,000 158,904,000 141,633,000 465,218,000 441,300,000 Earnings before taxes on income 18,680,000 19,352,000 27,954,000 57,021,000 Provision for taxes on income 5,791,000 5,999,000 7,851,000 17,677,000 Net earnings before cumulative effect of accounting change 12,889,000 13,353,000 20,103,000 39,344,000 Cumulative effect of accounting change, net of tax - - (43,819,000) - Net earnings (loss) $ 12,889,000 $ 13,353,000 $(23,716,000) $ 39,344,000 Net earnings (loss) per average share of common stock outstanding: Before cumulative effect of accounting change $ .28 $ .29 $ .44 $ .86 Cumulative effect of accounting change - - (.96) - Net earnings (loss) $ .28 $ .29 $(.52) $ .86 Cash dividends per share $ .0833 $ .0833 $ .2499 $ .2499 Average shares of common stock outstanding 45,959,000 45,783,000 45,850,000 45,786,000
- 1 - CARTER-WALLACE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, March 31, 1993 1993 (Unaudited) (Restated) Assets Current Assets: Cash and cash equivalents $ 15,001,000 $ 8,231,000 Short-term investments 29,697,000 28,207,000 Accounts and other receivables less allowances of $5,357,000 at December 31, 1993 and $5,639,000 at March 31, 1993 130,660,000 139,413,000 Inventories: Finished goods 65,846,000 52,835,000 Work in process 18,545,000 22,520,000 Raw materials and supplies 37,448,000 39,085,000 121,839,000 114,440,000 Prepaid expenses, deferred taxes and other current assets 22,358,000 22,507,000 Total Current Assets 319,555,000 312,798,000 Property, plant and equipment, at cost 274,971,000 263,367,000 Less: accumulated depreciation and amortization 120,136,000 113,297,000 154,835,000 150,070,000 Intangible assets 111,614,000 117,232,000 Other assets 40,028,000 15,450,000 Total Assets $626,032,000 $595,550,000 Liabilities and Stockholders' Equity Current Liabilities: Accounts payable $ 18,067,000 $ 32,866,000 Accrued expenses 95,886,000 93,807,000 Notes payable 11,692,000 1,950,000 Total Current Liabilities 125,645,000 128,623,000 Long-Term Liabilities: Long-term debt 12,560,000 13,184,000 Deferred compensation 8,290,000 7,751,000 Other long-term liabilities 85,343,000 16,831,000 Total Long-Term Liabilities 106,193,000 37,766,000 Stockholders' Equity: Common stock 34,418,000 34,373,000 Class B common stock 12,787,000 12,832,000 Capital in excess of par value 1,683,000 637,000 Retained earnings 380,688,000 415,369,000 Less: Equity adjustment from foreign currency translation 20,227,000 14,739,000 Treasury stock, at cost 15,155,000 19,311,000 Total Stockholders' Equity 394,194,000 429,161,000 Total Liabilities and Stockholders' Equity $626,032,000 $595,550,000
- 2 - CARTER-WALLACE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS NINE MONTHS ENDED DECEMBER 31, 1993 AND 1992 (Unaudited)
1993 1992 Net earnings (loss) $(23,716,000) $ 39,344,000 Cumulative effect of accounting change 43,819,000 - Changes in assets and liabilities (10,284,000) (5,890,000) Other changes 20,303,000 19,398,000 Cash flows from operations 30,122,000 52,852,000 Cash flows used in investing activities: Additions to property, plant and equipment (17,651,000) (19,510,000) Increase in short-term investments (3,155,000) (1,258,000) Payments for acquisitions (196,000) (755,000) Other investing activities 443,000 2,889,000 (20,559,000) (18,634,000) Cash flows used in financing activities: Dividends paid (11,455,000) (11,442,000) Increase in borrowings 10,109,000 1,428,000 Payments of debt (771,000) (2,422,000) Purchase of treasury stock (278,000) (342,000) (2,395,000) (12,778,000) Effect of exchange rate changes on cash and cash equivalents (398,000) (822,000) Increase in cash and cash equivalents $ 6,770,000 $ 20,618,000
- 3 - CARTER-WALLACE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1993 AND 1992 Note 1: Interim Reports The results of the interim periods are not necessarily indicative of results expected for a full year's operations. In the opinion of management, all adjustments necessary for a fair statement of results of these interim periods have been reflected in these financial statements and are of a normal recurring nature. Note 2: Review of Independent Auditors The financial information included in this report has been reviewed by KPMG Peat Marwick, independent auditors, in accordance with standards and procedures established by the American Institute of Certified Public Accountants. All adjustments or additional disclosures proposed by KPMG Peat Marwick have been reflected in the data presented and a copy of their report on this limited review is included in this Form. Note 3: Postretirement Benefits Other Than Pensions The Company provides certain health care and life insurance benefits for retired employees. Effective April 1, 1993, the Company adopted Statement of Financial Accounting Standards ("SFAS") No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions". SFAS No. 106 requires companies to accrue postretirement benefits during the years the employees render service until they attain full eligibility for those benefits. Previously, these costs were recognized as expense as the premiums were paid. The postretirement benefit plans are unfunded. The cumulative effect of adopting SFAS No. 106 as of April 1, 1993, resulted in a charge of $69,554,000 before taxes or $43,819,000 after taxes ($.96 per share). This non-cash charge represents the accumulated benefit obligation which the Company has elected to recognize immediately. The initial postretirement benefit obligation was subsequently reduced as a result of plan modifications made effective July 1, 1993. In accordance with SFAS No. 106, this reduction in the obligation is being amortized as a component of the net periodic postretirement expense in current and future years. The effect of adopting SFAS No. 106 and the subsequent amendment of the plan will increase 1994 postretirement benefit expense by approximately $2,500,000 before taxes or $1,700,000 after taxes ($.04 per share). The effect on the nine months ended December 31, 1993 excluding the one-time charge to earnings was approximately $2,300,000 before taxes or $1,600,000 after taxes ($.03 per share). (Continued) - 4 - CARTER-WALLACE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1993 AND 1992 (Continued) Note 4: Income Taxes Effective April 1, 1993, the Company adopted SFAS No. 109 "Accounting for Income Taxes". This statement requires a change in the method of accounting for income taxes from the deferred method to the liability method. During the quarter ended September 30, 1993, the enacted federal statutory tax rate increased from 34% to 35%. In accordance with SFAS No. 109, deferred income taxes were adjusted to reflect this change which resulted in a credit to the income tax provision of $815,000 or $.02 per share. The effect of the tax law change on the current provision was not significant. Deferred income taxes are provided for temporary differences between the book and tax bases of the Company's assets and liabilities. As of April 1, 1993, the Company had net deferred tax assets of $35,400,000 recorded in the condensed consolidated balance sheet which was subsequently increased to $36,200,000 reflecting the change in the enacted federal statutory tax rate. Aggregate deferred tax assets of $50,700,000 consist primarily of $26,800,000 related to postretirement benefit plans, $10,300,000 related to accrued liabilities, $8,200,000 related to employee benefit plans, and $4,500,000 related to asset valuations. Aggregate deferred tax liabilities of $14,500,000 consist primarily of $11,200,000 related to the excess of tax depreciation over depreciation for financial statement purposes. The effect of adopting this statement was a one-time non-cash charge of $1,970,000 which was recognized on a restated basis in the year ended March 31, 1989. Accordingly, retained earnings as of March 31, 1993 have been restated to reflect the adoption. In addition, as a result of the restatement of acquisitions made subsequent to March 31, 1989, Intangible Assets at March 31, 1993 have been restated and reduced by $800,000. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized. Management believes, based on the Company's history of prior and current operating earnings, that the Company will realize the benefits of the existing deferred tax assets. (Continued) - 5 - CARTER-WALLACE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1993 AND 1992 (Continued) Note 5: Licensing Agreement In April, 1992, Carter-Wallace entered into a licensing agreement with Schering-Plough Corporation, granting Schering-Plough exclusive marketing rights in all markets except the United States and its territories and possessions, Canada and Mexico, to Felbatol (felbamate), an antiepileptic drug for the treatment of certain seizure disorders. Under the licensing agreement, Carter-Wallace received in April, 1992, an initial, non-refundable license payment of $10,000,000 and is to receive royalties, which could be significant, on net sales of its Felbatol compound in the territory covered by the license. Separately, Schering-Plough and Carter-Wallace agreed that, under certain circumstances, they will put into effect a co-promotional arrangement with respect to a Schering-Plough pharmaceutical product to be determined in the future. This agreement will permit Carter-Wallace to receive fees for services and additional remuneration attributable to growth in sales of such product, which, in total, may be significant to the Company. - 6 - INDEPENDENT AUDITORS' REPORT The Board of Directors Carter-Wallace, Inc.: We have reviewed the condensed consolidated balance sheet of Carter-Wallace, Inc. and subsidiaries as of December 31, 1993, and the related condensed consolidated statements of earnings for the three-month and nine-month periods ended December 31, 1993 and 1992 and the condensed consolidated statements of cash flows for the nine-month periods ended December 31, 1993 and 1992 in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. As discussed in notes 3 and 4 to the condensed consolidated financial statements, the Company adopted the provisions of the Financial Accounting Standards Board's Statements No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" and No. 109, "Accounting for Income Taxes" in 1994. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Carter-Wallace, Inc. and subsidiaries as of March 31, 1993, and the related consolidated statements of earnings and retained earnings, and cash flows for the year then ended (not presented herein); and in our report dated May 20, 1993, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 1993 is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. Our report dated May 20, 1993, on the consolidated financial statements of Carter-Wallace, Inc. and subsidiaries as of and for the year ended March 31, 1993, contains an explanatory paragraph that states that the Company received a letter from the Food and Drug Administration (FDA) requesting the discontinuance of the marketing of its Organidin products. The Company met with the FDA and has replied to the FDA letter. The ultimate outcome of this matter cannot presently be determined. Accordingly, no provision for any liability that may result upon resolution has been recognized in the March 31, 1993 condensed consolidated balance sheet. January 20, 1994 New York, New York KPMG Peat Marwick - 7 - CARTER-WALLACE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - Three months ended December 31, 1993 compared to three months ended December 31, 1992 Net sales increased $16,819,000 (10.5%) in the three months ended December 31, 1993 ("fiscal 1994 period") as compared to net sales in the three months ended December 31, 1992 ("fiscal 1993 period"). The higher sales level was attributable to unit volume gains and selling price increases implemented in the prior year in the Health Care segment. The unit volume increase in Health Care sales was primarily attributable to higher sales of expectorant/mucolytic products and to a lesser extent introductory sales of Felbatol (felbamate), which the Company began marketing in August, 1993, were greater than planned. The unit volume gain in expectorant/mucolytic products was due primarily to a decline in sales of competitive products. Sales of expectorant/mucolytic products represented approximately 19% of consolidated sales in the fiscal 1994 period compared to approximately 8% of consolidated sales in the fiscal 1993 period. The Company is unable to determine whether such decline will continue. The timing and amount of future price increases in the Health Care segment may be negatively influenced by competitive pressures and the possibility of government regulation. The Health Care segment continues to be adversely impacted by generic erosion on pharmaceutical product sales. The Consumer Products segment experienced a decline in unit sales volume which resulted from a high level of competitive activity in anti-perspirant/deodorants and other categories in which the Company operates. Lower foreign exchange rates in comparison with the prior year had the effect of decreasing sales in the fiscal 1994 period by $2,700,000. The effect of changes in foreign exchange rates on results of operations in the fiscal 1994 period compared to the prior year period was not significant. The movement of foreign exchange rates is difficult to forecast and the Company does not make any predictions of future foreign exchange rates. However, if the foreign exchange rates in effect at the end of the third quarter were to continue unchanged through the end of the current fiscal year, the effect of foreign exchange rates on sales and earnings in the fourth quarter in comparison with the prior year period would not be significant. Other revenues decreased $220,000 or 16.4% in the fiscal 1994 period as compared to the fiscal 1993 period. Cost of goods sold as a percentage of net sales decreased from 34.0% in the fiscal 1993 period to 32.4% in the 1994 period primarily due to changes in product mix. Advertising, marketing and other selling expenses increased by $10,521,000 or 18.9% due to a higher level of spending primarily in the Health Care segment. The launch of Felbatol continues to be supported by substantial spending levels in the fiscal 1994 period. (Continued) - 8 - CARTER-WALLACE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Research and development expenses increased by $2,017,000 or 16.3% as part of the Company's continuing effort to develop new products and improve existing ones. These higher expenditures were primarily in the Health Care segment including Astelin for the relief of asthma and allergic rhinitis. General, administrative and other expenses increased $1,789,000 or 9.5% in the fiscal 1994 period as compared to the fiscal 1993 period. This increase was related to compensation, including higher costs in the current period for postretirement benefit expense and other administrative costs. Interest expense increased $101,000 (24.3%) in the fiscal 1994 period as compared to the fiscal 1993 period due to higher levels of borrowings in the fiscal 1994 period. The estimated annual effective consolidated income tax rate on operations in the fiscal 1994 period was 31%, the same as the fiscal 1993 annual rate. Consolidated net earnings in the fiscal 1994 period were $12,889,000 or $.28 per share as compared to net earnings of $13,353,000 or $.29 per share in the fiscal 1993 period. The net earnings in the 1994 period were substantially favorably impacted by the increase in sales of expectorant/mucolytic products. - 9 - CARTER-WALLACE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations - Nine months ended December 31, 1993 compared to nine months ended December 31, 1992 Net sales increased $5,325,000 (1.1%) in the nine months ended December 31, 1993 ("fiscal 1994 period") as compared to the nine months ended December 31, 1992 ("fiscal 1993 period"). The increase in sales was due to selling price increases in the Health Care segment which were implemented in the prior year and to a lesser extent, the Consumer Products segment. The timing and amount of future price increases in the Health Care segment may be negatively influenced by competitive pressures and the possibility of government regulation. Unit volume declined in both the Health Care and Consumer Products segments. Included in Health Care unit volume were higher sales of expectorant/mucolytic products and introductory sales of Felbatol (felbamate), which the Company began marketing in August, 1993, were greater than planned. The unit volume gain in expectorant/mucolytic products was due primarily to a decline in sales of competitive products. Sales of expectorant/mucolytic products represented approximately 11% of consolidated sales in the fiscal 1994 period compared to 7% in the fiscal 1993 period. The Company is unable to determine whether such decline will continue. The Health Care segment continues to be adversely impacted by generic erosion on pharmaceutical product sales. Lower foreign exchange rates in comparison with the prior year period had the effect of decreasing sales in the fiscal 1994 period by $14,600,000. The effect of changes in foreign exchange rates on results of operations in the fiscal 1994 period compared to the prior year period was not significant. The movement of foreign exchange rates is difficult to forecast and the Company does not make any predictions of future foreign exchange rates. However, if the foreign exchange rates in effect at the end of the third quarter were to continue unchanged through the end of the current fiscal year, the effect of foreign exchange rates on sales and earnings in the fourth quarter in comparison with the prior year period would not be significant. During the fiscal 1994 period the Company adopted Statement of Financial Accounting Standards No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" and elected to immediately recognize the transition obligation of $69,554,000 before taxes or $43,819,000 after taxes ($.96 per share). Effective July 1, 1993, the Company amended its postretirement benefit plan which reduced the annual ongoing costs of these benefits. Included in earnings before the accounting change in the fiscal 1994 period are increased costs for these postretirement benefits of $2,300,000 before taxes or $1,600,000 after taxes ($.03 per share) related to the adoption of this statement. (Continued) - 10 - CARTER-WALLACE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued) Included in earnings in the fiscal 1993 period is an initial non- refundable payment of $10,000,000 before taxes, or $6,000,000 after taxes ($.13 per share) recorded in the first quarter of fiscal 1993 related to a licensing agreement with Schering-Plough Corporation granting Schering- Plough exclusive marketing rights to Felbatol (felbamate) in all markets except the United States and its territories and possessions, Canada and Mexico. Other revenues decreased $474,000 or 11.4% in the fiscal 1994 period as compared to the fiscal 1993 period due to reduced interest income. Cost of goods sold as a percentage of net sales increased from 34.2% in the fiscal 1993 period to 34.3%. Advertising, marketing and other selling expenses increased by $17,303,000 or 9.6% due to a higher level of spending in both the Health Care and Consumer Products business segments. Felbatol (felbamate) was supported by substantial introductory spending levels in the fiscal 1994 period. The higher level of spending in the Consumer Products segment is primarily a result of the marketing support for line extensions of anti- perspirant/deodorant products. Research and development expenses increased by $2,240,000 or 6.1% due to increased spending primarily in the Health Care segment including Astelin for the relief of asthma and nasal allergy. General, administrative and other expenses increased $1,745,000 or 3.0% in the fiscal 1994 period as compared to the fiscal 1993 period primarily due to increased compensation including a higher charge for postretirement benefit expense. The fiscal 1993 period includes a provision in the prior year for a loss of $1,200,000 before taxes or $720,000 after taxes ($.02 per share) related to trade receivables from Phar-Mor, Inc., a drugstore chain which filed for bankruptcy. During the nine months ended December 31, 1993, the Company adjusted its net deferred tax asset to reflect the recently enacted change in federal corporate income tax rates. As a result, the provision for income taxes in the fiscal 1994 period includes a one-time credit of $815,000 or $.02 per share as required by Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes". The effect of the tax law change on the current provision for income taxes was not significant. Excluding the effect of this one-time adjustment of deferred taxes, the estimated annual effective consolidated income tax rate on operations in the fiscal 1994 period was 31%, the same as the fiscal 1993 annual tax rate. Consolidated net earnings before the cumulative effect of the accounting change in the fiscal 1994 period were $20,103,000 or $.44 per share as compared to net earnings of $39,344,000 or $.86 per share in the fiscal 1993 period. Consolidated net loss after the cumulative effect of the accounting change for the fiscal 1994 period was $23,716,000 or $.52 per share. The net earnings before the cumulative effect of the accounting change in the 1994 period were substantially favorably impacted by the increase in sales of expectorant/mucolytic products. - 11 - Liquidity and Capital Resources Funds provided from operations are used for capital expenditures, acquisitions, the purchase of treasury stock, the payment of dividends and working capital requirements. External borrowings are incurred as needed to satisfy cash requirements relating to seasonal business fluctuations, to finance major facility expansion programs and to finance major acquisitions. - 12 - PART II - OTHER INFORMATION Item 1 - Legal Proceedings See "Item 1 - Legal Proceedings" in Part II of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1993 Item 6 - Exhibits and Reports of Form 8-K (a) Exhibits - None (b) Reports of Form 8-K - No reports on Form 8-K have been filed during the quarter ended December 31, 1993. - 13 - 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. Carter-Wallace, Inc. (Registrant) Date: January 27, 1994 s/Daniel J. Black Daniel J. Black President & Chief Operating Officer Date: January 27, 1994 s/Paul A. Veteri Paul A. Veteri Vice President, Finance & Chief Financial Officer - 14 - -----END PRIVACY-ENHANCED MESSAGE-----