-----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, F8oCfsD8b3EfnxyuUt/y0rPkO0PswFnlm2rwtTik3+Hn8znRNCDY7YAoIrUD7Ozn 1qEK0wOld55O4z5Xk4LpkA== 0000313927-03-000040.txt : 20030210 0000313927-03-000040.hdr.sgml : 20030210 20030210123703 ACCESSION NUMBER: 0000313927-03-000040 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 ITEM INFORMATION: Other events FILED AS OF DATE: 20030210 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHURCH & DWIGHT CO INC /DE/ CENTRAL INDEX KEY: 0000313927 STANDARD INDUSTRIAL CLASSIFICATION: SOAP, DETERGENT, CLEANING PREPARATIONS, PERFUMES, COSMETICS [2840] IRS NUMBER: 134996950 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10585 FILM NUMBER: 03546504 BUSINESS ADDRESS: STREET 1: 469 N HARRISON ST CITY: PRINCETON STATE: NJ ZIP: 08543-5297 BUSINESS PHONE: 6096835900 MAIL ADDRESS: STREET 1: 469 N HARRISON STREET CITY: PRINCETON STATE: NJ ZIP: 08543-5297 8-K 1 f8kcover.txt 8-K 2002 PRESS RELEASE - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-10585 Date of the report (Date of earliest event reported): February 10, 2003 -------------------------------------------- CHURCH & DWIGHT CO., INC. (Exact Name of Registrant as Specified in its Charter)
Delaware 13-4996950 (State or Other Jurisdiction or Incorporation) (I.R.S. Employer Identification No.)
469 North Harrison Street, Princeton, New Jersey 08543 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (609) 683-5900 N/A (Former Name or Former Address, if Changed Since Last Report) -------------------------------------------- - ------------------------------------------------------------------------------ - ------------------------------------------------------------------------------- ITEM 5. OTHER EVENTS On February 10, 2003, Church & Dwight Co., Inc. ("Company") issued a press release relating to earnings for the quarter and year ended December 31, 2002 and the Company's investor and analyst conference to be held on Monday, February 10, 2003. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits Exhibit 1 Press Release by the Company dated February 10, 2003. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registration has duly caused this Current Report to be signed on its behalf by the undersigned hereunto duly authorized. CHURCH & DWIGHT CO., INC. a Delaware Corporation Date: February 10, 2003 By: /s/ Robert A. Davies III --------------------------------------- Robert A. Davies III Chief Executive Officer EX-99 3 f8k2002.txt PRESS RELEASE News Release Contact: Zvi Eiref Chief Financial Officer 609/279-7666 CHURCH & DWIGHT REPORTS STRONG FOURTH QUARTER AND FULL YEAR 2002 RESULTS. REAFFIRMS LONG-TERM OBJECTIVES - ------------------------------------------------------------------------------- PRINCETON, NJ, FEBRUARY 10, 2003 - Church & Dwight Co., Inc. (NYSE:CHD) today reported fourth quarter net income of $15.5 million or $0.37 per diluted share, compared to $6.1 million or $0.15 per diluted share in the previous year. The previous year's results included accounting charges of $0.17 per share primarily related to the acquisition by the Company's affiliate, Armkel LLC, of the former Carter-Wallace consumer products business. Adjusting for these charges, earnings per share increased by $0.05 per share or 16% to $0.37 in the fourth quarter of 2002 from an adjusted $0.32 in the comparable quarter of the prior year. Robert A. Davies, III, Chairman and Chief Executive Officer of Church & Dwight, commented, "With the final integration of the former USA Detergents and Carter-Wallace businesses in the second and third quarters, we were able to increase fourth quarter earnings while significantly raising our spending on marketing and new product development." Church & Dwight sales, excluding Armkel and other affiliates, increased 1.2% to $268.1 million from $264.9 million last year. Organic sales growth, adjusted for acquisitions and discontinued product lines, was approximately 4%, with solid gains in personal care, laundry and specialty products, and flat deodorizer and cleaning and international sales. Combined sales of Church & Dwight and affiliates increased 5.4% to $380.3 million, with organic growth in excess of 6%, primarily due to higher personal care sales for both Church & Dwight and Armkel. Due to the integration benefits referred to earlier, gross profit margin increased to 30.2% from 27.8% in the same quarter a year earlier. This gain occurred despite the inclusion of approximately $4 million in equipment obsolescence charges related to process improvements at two plants, and downsizing and impairment charges at two other plants. Without these charges, gross margin would have risen 3.8% to 31.6%. The $5 million increase in marketing spending for the quarter was due to higher advertising for deodorizer and personal care products, and the $1 million increase in selling, general and administrative expenses reflected higher research & development spending. For the full year, net income increased 42% to $66.7 million or $1.60 per share from $47.0 million or $1.15 per share in the previous year. This year's results included a $0.01 per share net charge related to the step-up of opening inventory values by Armkel and the allocation of profits under the Armkel joint venture agreement. The previous year's results included acquisition-related charges of $0.17 per share as well as intangibles amortization of $0.06 per share that was discontinued in 2002 with the adoption of accounting standard FAS 142. Adjusting for these charges, earnings per share increased $0.23 per share or 17% to $1.61 per share from $1.38 per share a year earlier. - more - Full year sales, excluding Armkel and other affiliates, increased 9.1% to $1,047.1 million from $959.7 million in the previous year. Adjusting for acquisitions and discontinued product lines, as well as the reversal of prior year promotion liabilities of approximately $5 million, organic growth was approximately 2%, with higher deodorizer and cleaning, laundry and specialty products sales partially offset by lower personal care. Combined sales of Church & Dwight and affiliates increased 38.3% to $1,510.7 million primarily due to the Carter-Wallace acquisition in September 2001. During the final quarter, the Company prepaid $25 million of its term debt, bringing the total prepayment for the year to $45 million. At year-end, the Company had outstanding long-term debt of $352 million, and cash less short-term debt of $60 million, for a net debt position of $292 million, a reduction of $74 million from the previous year-end. Earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the Company's bank loan agreements, is estimated to be in excess of $140 million for the full year. The Company has announced several new product initiatives. Early in 2003, the Company launched Arrid(R) Total Soft Solid and Invisible Solid antiperspirants targeted primarily to women, and broadened its Arm & Hammer(R) Ultramax(R) antiperspirant line by adding a gel primarily targeted at men. To strengthen its toothpaste franchise, the Company introduced Arm & Hammer Complete Care, the first Arm & Hammer all-in-one toothpaste. In the laundry area, the Company launched Arm & Hammer Fresh'N Soft(R) Liquid Fabric Softener as a companion product to the existing fabric softener dryer sheets. These products should all reach broad national distribution during the second quarter. In addition, beginning in the second quarter, the Company expects to introduce Brillo(R) Scrub'n'Toss(TM), a disposable cleaning pad, and Church & Dwight's first major extension to the Brillo line. Additional product initiatives will likely be announced later in the year. ARMKEL, LLC - ----------- Armkel, LLC, the 50/50 joint venture between Church & Dwight and the private equity group, Kelso & Company, reported net income of $6.0 million in the seasonally low fourth quarter. This compares to a net loss of $15.6 million in the fourth quarter of 2001 when the Company commenced operations through the acquisition of the former Carter-Wallace consumer products business. The previous year's results included acquisition-related accounting charges of $15.1 million, without which the net loss would have been $0.5 million. Sales were $102.0 million, an 18.6% increase from the previous year's $86.0 million. Adjusting for discontinued product lines and foreign currency gains, organic sales growth was about 14%. Armkel estimates that about a third of this fourth quarter gain is due to weak sales in the previous year related to promotional activity by the predecessor company immediately before the acquisition. The remainder of the growth primarily represents increased sales of Trojan(R) condoms and First Response(R) pregnancy kits in the U.S., and solid gains in several foreign markets, particularly France and the United Kingdom. Building on the success of recent product introductions such as Trojan Extended Pleasure(TM) and Her Pleasure(TM), the Company will add new line extensions to the Trojan condom line in 2003. The Company has also launched a new upscale line of depilatories and skin care products in the U.S. under the Lineance(R) name, designed to complement the existing Nair(R) depilatories line. For the full year, net income was $31.2 million on sales of $424.6 million. Excluding a first quarter inventory step-up accounting charge of $8.1 million, net income would have been $39.3 million. - more - Armkel had outstanding long-term debt of $431 million, and cash less short-term debt of $43 million, for a net debt position of $388 million at year-end. This compares with a net debt position of $390 million at the previous year-end. During the year, Armkel paid approximately $45 million in severance, integration and other costs, primarily related to the closing of its Cranbury, N.J., facility and other operations. Based on the definition in its bank loan agreements, which includes the add-back of certain integration costs, Armkel's EBITDA is estimated at approximately $103 million for the year. Late in 2002, Armkel entered into an agreement to sell its Italian subsidiary to a group, comprising local management and private equity investors, for a price of approximately $22 million. Armkel Italy reported 2002 sales of $40.8 million and EBITDA of $4.4 million. Armkel U.S. will retain ownership of certain Italian pregnancy kit and oral care product lines with sales of approximately $3 million. The remainder of Armkel Italy's business includes a high percentage of distributor sales as well as hospital diagnostic and other products not related to Armkel's core business. The agreement is subject to regulatory approval in Europe and is expected to close around the end of February. Assuming the transaction is closed as scheduled, Armkel will reclassify the Italian business as a discontinued operation in its 2002 financial statements. OUTLOOK - ------- Commenting on the outlook for 2003, Mr. Davies added, "Due to the timing of our new product introductions and other factors, we expect moderate earnings growth in the first half of the year. But the previously mentioned combination of higher margins and increased investment spending should enable us to achieve another year of solid earnings growth. At this early stage, before we can see the results of our major new product initiatives, we are comfortable with the current range of Wall Street analyst's estimates of $1.77-1.81 earnings per share for the full year." Looking ahead, Mr. Davies reaffirmed the Company's previously announced objectives for average annual growth during the period 2003-2005: organic sales growth for Church & Dwight and affiliates in excess of 5% a year; gross margin improvement of 100-150 basis points a year; and EPS growth of 12.5%-15% per year. Church & Dwight will host a conference call to discuss fourth quarter and full year 2002 earnings with the investment community on February 10 at 12:30 p.m. (ET). To participate, dial in at 800-599-9816. A replay will be available two hours after the call at 888-286-8010, access code 74380, as well as the company's website. The International dial in number is 617-801-9702, access code 895045; and the international replay number is 617-801-6888, access code 74380. Also, you can participate via webcast by visiting the Investor Relations section of the Company's web site at www.churchdwight.com. Church & Dwight Co., Inc. is the manufacturer of household, personal care and specialty products, sold under the ARM & HAMMER brand name and other well-known trademarks. This release contains forward-looking statements relating, among others, to short- and long-term financial objectives, sales growth, cash flow and cost improvement programs. These statements represent the intentions, plans, expectations and beliefs of Church & Dwight, and are subject to risks, uncertainties and other factors, many of which are outside the Company's control and could cause actual results to differ materially from such forward-looking statements. The uncertainties include assumptions as to market growth and consumer demand (including the effect of political and economic events on consumer demand), raw material and energy prices, the financial condition of major customers, and the Company's determination and ability to exercise its option to acquire the remaining 50% interest in Armkel. With regard to the new product introductions referred to in this release, there is particular uncertainty relating to trade, competitive and consumer reactions. Other factors, which could materially affect the results, include the outcome of contingencies, including litigation, pending regulatory proceedings, environmental remediation and the divestiture of assets. For a description of additional cautionary statements, see Church & Dwight's and Armkel's quarterly and annual reports filed with the SEC. # # # Church & Dwight Co., Inc. and Subsidiaries Product Line Net Sales Dollars in Thousands
SALES (EXCLUDING AFFILIATES) Three Months Ended Twelve Months Ended % Change --------- -------- Dec.31,2002 Dec.31,2001 Dec.31,2002 Dec.31,2001 Qtr. Act. YTD Act. ----------------------------- -------------------------- --------------------- Deodorizer and Cleaning $ 67,634 $ 71,272 $ 255,756 $ 236,549 -5.1% 8.1% Laundry $ 101,430 $ 97,876 $ 400,476 $ 386,619 3.6% 3.6% Personal Care $ 44,691 $ 41,615 $ 176,242 $ 122,160 7.4% 44.3% International $ 7,960 $ 11,353 $ 31,642 $ 41,582 -29.9% -23.9% ----------------------------- ---------------------------- -------------- Total Consumer Products $ 221,715 $ 222,116 $ 864,116 $ 786,910 -0.2% 9.8% Specialty Products Division $ 46,383 $ 42,803 $ 183,033 $ 172,797 8.4% 5.9% ----------------------------- --------------------------- -------------- Total Reported Net Sales $ 268,098 $ 264,919 $1,047,149 $ 959,707 1.2% 9.1% ============================= =========================== ==============
SALES (INCLUDING AFFILIATES) (1) Three Months Ended Twelve Months Ended % Change --------- -------- Dec.31,2002 Dec.31,2001 Dec.31,2002 Dec.31,2001 Qtr. Act. YTD Act. ---------------------------- -------------------------- ------------------- Deodorizer and Cleaning $ 67,634 $ 71,272 $ 255,756 $ 236,549 -5.1% 8.1% Laundry $ 101,430 $ 97,876 $ 400,476 $ 386,619 3.6% 3.6% Personal Care $ 91,489 $ 79,421 $ 385,347 $ 159,966 15.2% NM International $ 62,950 $ 59,581 $ 245,794 $ 89,810 5.7% NM --------------------------- -------------------------- ----------------- Total Consumer Products $ 323,503 $ 308,150 $1,287,373 $ 872,944 5.0% 47.5% Specialty Products Division $ 56,803 $ 52,810 $ 223,375 $ 219,223 7.6% 1.9% --------------------------- ------------------------- ----------------- Total Net Sales (Incl. Affiliates) $ 380,306 $ 360,960 $1,510,748 $1,092,167 5.4% 38.3% Less: Unconsolidated Affiliates $ 112,208 $ 96,041 $ 463,599 $ 132,460 16.8% NM --------------------------- -------------------------- ----------------- Total Reported Net Sales $ 268,098 $ 264,919 $1,047,149 $ 959,707 1.2% 9.1% =========================== ========================== ================= NOTE: (1) These sales include the three 50/50 affiliates: Armkel, Armand and Armakleen. NM - Not meaningful
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income
Three Months Ended Twelve Months Ended - ----------------------------------------------------------------------------------------------------------------------------------- Unaudited Unaudited - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- (In thousands, except per share data) Dec. 31, 2002 Dec. 31, 2001 Dec. 31, 2002 Dec. 31, 2001 - ----------------------------------------------------------------------------------------------------------------------------------- Net Sales $ 268,098 $ 264,919 $1,047,149 $ 959,707 Cost of sales 187,265 191,162 735,928 680,211 - ----------------------------------------------------------------------------------------------------------------------------------- Gross profit 80,833 73,757 311,221 279,496 Marketing expenses 24,458 19,563 86,195 74,803 Selling, general and administrative expenses 31,530 30,625 120,512 111,832 Impairment and other items -- (660) -- (660) 21,911 - ----------------------------------------------------------------------------------------------------------------------------------- Income from Operations 24,845 24,229 104,514 93,521 Equity in earnings/(loss) of affiliates 3,786 (9,264) 21,520 (6,195) Other income (expense), net (5,770) (4,212) (24,799) (9,582) - ----------------------------------------------------------------------------------------------------------------------------------- Income before Minority interest and taxes 22,861 10,753 101,235 77,744 Minority Interest 14 106 143 3,889 - ----------------------------------------------------------------------------------------------------------------------------------- Income before taxes 22,847 10,647 101,092 73,855 Income taxes 7,307 4,534 34,402 26,871 - ----------------------------------------------------------------------------------------------------------------------------------- Net Income $ 15,540 $ 6,113 $ 66,690 $ 46,984 - ----------------------------------------------------------------------------------------------------------------------------------- Net Income per share - Basic $0.39 $0.16 $1.68 $1.21 Net Income per share - Diluted $0.37 $0.15 (1) $1.60 (2) $1.15 (2) - ----------------------------------------------------------------------------------------------------------------------------------- Dividend per share $0.075 $0.075 $0.30 $0.29 - ----------------------------------------------------------------------------------------------------------------------------------- Weighted average shares outstanding - Basic 39,875 39,105 39,630 38,879 Weighted average shares outstanding - Diluted 41,984 41,099 41,809 40,819 - -----------------------------------------------------------------------------------------------------------------------------------
(1) Last year's fourth quarter includes a $0.15 per share accounting charge related to the step-up of opening inventory values by Armkel and $0.02 per share of goodwill amortization. (2) This year includes a $.06 per share first quarter accounting charge related to the step-up of opening inventory values by Armkel as well as a $.05 per share second quarter gain related to the allocation of profits of Armkel. Last year includes the $0.15 per share accounting charge referred to in footnote 1, $0.06 per share of goodwill amortization and a $0.02 per share plant shutdown charge. CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets
Unaudited (Dollars in thousands) Dec. 31, 2002 Dec. 31, 2001 - ------------------------------------------------------------------------------------------------------------------------------------ Assets - ------------------------------------------------------------------------------------------------------------------------------------ Current Assets Cash, equivalents and securities $ 76,302 $ 52,446 Accounts receivable 100,252 106,291 Inventories 82,674 101,214 Other current assets 26,208 33,256 - ------------------------------------------------------------------------------------------------------------------------ Total Current Assets $285,436 $293,207 - ------------------------------------------------------------------------------------------------------------------------ Property, Plant and Equipment (Net) 240,007 231,449 Equity Investment in Affiliates 131,959 115,121 Intangibles and other assets 330,839 309,308 - ------------------------------------------------------------------------------------------------------------------------ Total Assets $988,241 $949,085 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------ Short-Term Debt $ 15,945 $ 11,580 Other Current Liabilities 175,222 184,436 - ------------------------------------------------------------------------------------------------------------------------ Total Current Liabilities $191,167 $196,016 - ------------------------------------------------------------------------------------------------------------------------ Long-Term Debt 352,488 406,564 Other Long-Term Liabilities 96,940 64,202 Stockholders' Equity 347,646 282,303 - ------------------------------------------------------------------------------------------------------------------------ Total Liabilities and Stockholders' Equity $988,241 $949,085 - ------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------
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