-----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, Ez3+UvjDQCuJp6cMCgPITLHiSTOiaXGu8Ptk5xSA/bqePp95TTyw4mh/b/i5/psw BvLFpgwqbsQ7kSa8U8NwXw== 0000313927-03-000240.txt : 20030507 0000313927-03-000240.hdr.sgml : 20030507 20030507081731 ACCESSION NUMBER: 0000313927-03-000240 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030328 ITEM INFORMATION: Other events FILED AS OF DATE: 20030507 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: 03685118 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 f8kcover03.txt 1ST QUARTER 2003 8-K - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 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): May 5, 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 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits - The following Exhibit is being furnished to provide a portion of the disclosure referred to in items 9 and 12 of this Form 8-K. Exhibit 99.1 Press Release by the Company dated May 5, 2003. ITEM 9. REGULATION FD DISCLOSURE (including information provided under Item 12, "Results of Operations and Financial Condition") The following information is furnished to the Commission under both Item 9 and 12. The information required by Item 12 is being furnished pursuant to this Item 9 in accordance with the interim guidance provided by the Securities and Exchange Commission in "Filing Guidance Related To: Conditions for Use of Non-GAAP Financial Measures; and Insider Trades During Pension Fund Blackout Periods" (Release No., 33-8216, March 27, 2003). On May 5, 2003, Church & Dwight Co., Inc. (the "Company") issued a press release announcing its financial results for the first quarter of 2003. The press release is set forth in the attached Exhibit 99.1. The press release includes references to earnings before interest, taxes, depreciation and amortization as defined in the Company's primary credit facility ("EBITDA"), a non-GAAP financial measure. EBITDA is a required component of the financial covenants contained in the Company's primary credit facility and management believes that the presentation of EBITDA is useful to investors as a financial indicator of the Company's ability to service its indebtedness. The press release also includes references to sales, gross profit and operating profit on a combined basis, including Armkel LLC, and other unconsolidated affiliates. Management believes that the presentation of combined sales and operating results with these affiliate companies over which the Company exerts significant influence, but does not control the financial and operating decisions, is useful because the operation of these units, in which the Company has a 50% equity stake, are integrated in several respects (i.e. manufacturing, sales, marketing) with the Company's operations. 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: May 5, 2003 By: /s/ Robert A. Davies III --------------------------------------- Robert A. Davies III Chief Executive Officer EX-99 3 f8-k2003.txt 1ST QUARTER 2003 PRESS RELEASE News Release Contact: Zvi Eiref Embargo until 5/5/03 Chief Financial Officer 7:00 A.M. (Eastern Time) 609/279-7666 CHURCH & DWIGHT REPORTS FIRST QUARTER RESULTS REAFFIRMS 2003 EPS OBJECTIVE OF $1.77-$1.81 PER SHARE - -------------------------------------------------------------------------------- PRINCETON, NJ, MAY 5, 2003 - Church & Dwight Co., Inc. (NYSE:CHD) today reported first quarter net income of $20.9 million or $0.50 per diluted share, a 39% increase over the $14.9 million or $0.36 per diluted share for the same period last year. Last year's results included a $0.06 per share accounting charge related to the step-up of opening inventory values by the Company's affiliate, Armkel, LLC. Adjusting for this item, earnings per share increased by $0.08 per share or 19% to $0.50 per share from $0.42 per share last year. Robert A. Davies, III, Chairman and Chief Executive Officer of Church & Dwight, commented, "We are pleased with our 19% earnings growth, and sales were consistent with our objective for the quarter. During the quarter we were cautious on marketing spending, and now expect to increase expenditures in support of new product initiatives for the remainder of the year." Church & Dwight sales declined 3.3% to $248.3 million from $256.8 million in the same period of the previous year. Most of this $8.5 million decline was due to the rationalization of the former Carter-Wallace pet care and USA Detergents candle and cleaner product lines, a high percentage of which were discontinued during 2002, and the transfer of certain export operations to Armkel. In addition, this year's first quarter was one day shorter than the first quarter of last year. At the product line level, strong growth in liquid laundry detergent, and moderately higher sales of toothpaste were offset by lower sales of laundry detergent powder, fabric softeners and household cleaners. On a combined basis, including Armkel and other unconsolidated affiliates, sales increased 1.3% to $358.0 million from $353.3 million last year. This gain reflects strong growth by Armkel's U.S. and International businesses, described later in this release. - more - With the completion of the integration projects in late 2002, the Company stepped up its rate of new product activity in the first quarter of 2003. In personal care, the Company launched a new line of Arrid(R) antiperspirants targeted primarily at women under the Arrid Total name, and added significant new extensions to its Arm & Hammer(R) Dental Care toothpaste and Arm & Hammer Ultramax(R) antiperspirant lines. In laundry, the Company expanded distribution of both its Arm & Hammer and Xtra(R) liquid laundry detergent brands in the mass channel, and introduced a new Arm & Hammer liquid fabric softener line. These new products should reach broad national distribution in the second quarter. During the second quarter, the Company will also begin shipments of Brillo(R) Scrub'n'Toss(TM), a disposable cleaning pad, and a reformulated Arm & Hammer Pet Fresh(TM) Carpet Deodorizer, which provides a significant new consumer benefit. Gross margin improved 1.2 points to 29.7% from 28.5% in the same quarter last year. At current prices, the Company expects to incur over $10 million in energy and other commodity-based cost increases for the year, for materials such as resin, surfactants and palm oil. While these cost increases will slow down gross margin growth, the Company still expects to achieve a gross margin improvement for the year, through reductions in other raw and packaging materials costs, and improved manufacturing and distribution efficiencies. During the quarter, the Company repaid debt of approximately $29 million. At quarter-end, the Company had total outstanding debt of $340 million, and cash of $67 million, for a net debt position of $273 million, a reduction of $92 million from the same period-end last year. Earnings before interest, taxes, depreciation and amortization (EBITDA), a measure widely used by investors, as defined in the Company's bank loan agreements, are estimated at $36 million for the quarter. ARMKEL, LLC Armkel, a 50/50 joint venture between Church & Dwight and the private equity group, Kelso & Company, reported net income of $15.2 million compared to $0.3 million in the same period last year. Last year's results included an $8.1 million accounting charge related to the valuation of opening inventories. Adjusting for this item, net income increased $6.8 million or 81% to $15.2 million from $8.4 million last year. Armkel sales increased $12.3 million or 14.1% to $99.7 million compared to $87.4 million in the previous year. Domestic sales increased 7.2% to $52.1 million, led by gains in condoms and pregnancy kits, and the launch of a new line of specialty skin care products under the name Lineance(R). During the second quarter, the Company is introducing a major new pleasure enhancing line extension to the Trojan(R) condom line. International sales were $47.5 million, a 14% increase over last year excluding foreign exchange gains, reflecting higher oral and skin care sales in Europe and condom sales in Mexico. As previously reported, Armkel sold its Italian subsidiary during the quarter for $22.6 million, and recognized a pretax gain of approximately $1.9 million. - more - Armkel had total outstanding debt of $415 million, and cash of $48 million, for a net debt position of $367 million at quarter-end. This compares with a net debt position of $402 million a year ago. During the past 12 months, Armkel has paid approximately $40 million in severance, integration and other costs, primarily related to the closing of its Cranbury, N.J. facility in mid-2002. Based on the definition in its bank loan agreements, Armkel's EBITDA is estimated at approximately $28 million for the quarter. Mr. Davies added that, "An important measure of the success of the integration effort in 2002 was the significant improvement in the cost structure of both Church & Dwight and Armkel. As we look at the companies' operating performance, we are very pleased to see that Church & Dwight and its unconsolidated affiliates, in combination, reported a first quarter operating profit of $55.0 million compared to $46.8 million, adjusted for the previously mentioned inventory accounting charge, in the same period last year. Combined gross profit improved to 37.7% from the prior year's 35.8%, and combined operating margin improved to 15.4% from 13.3% a year ago. We believe we can continue to improve both gross and operating margins in the next few years. In the meantime, we feel comfortable with the previously stated objective of $1.77-$1.81 earnings per share for 2003." Church & Dwight will host a conference call to discuss first quarter 2003 earnings results with the investment community on May 5 at 10:00 a.m. (ET). To participate, dial in at 800-299-0148. A replay will be available two hours after the call at 888-286-8010, access code 4268251, as well as on the company's website. Also, you can participate via webcast by visiting the Investor Relations section of the Company's website 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 acquisition or divestiture of assets. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the U.S. Securities and Exchange Commission. This discussion is provided as permitted by the Private Securities Litigation Reform Act of 1995. # # # CHURCH & DWIGHT CO., INC. Product Line Net Sales, Gross Profit and Operating Profit Including Unconsolidated Affiliates 1st QUARTER 2003 vs. 2002
(Dollars in Millions) THREE MONTHS ENDED MARCH 28, 2003 THREE MONTHS ENDED MARCH 29, 2002 --------------------------------- --------------------------------- CHD CHD & CHD CHD & As Reported Affiliates Adj's * Affiliates As Reported Affiliates Adj's Affiliates * Deodorizers & Cleaning $ 53.2 $ - $ - $ 53.2 $ 62.6 $ - $ - $ 62.6 Laundry $ 100.6 $ - $ - $ 100.6 $ 100.2 $ - $ - $ 100.2 Personal Care $ 42.6 $ 52.1 $ - $ 94.7 $ 41.6 $ 48.6 $ - $ 90.2 International $ 7.9 $ 47.5 $ (0.8) $ 54.7 $ 8.4 $ 38.7 $ (0.1) $ 47.0 --------- -------- ------- -------- --------- -------- ----- -------- Total Consumer Products $ 204.3 $ 99.7 $ (0.8) $ 303.2 $ 212.8 $ 87.4 $ (0.1) $ 300.1 Specialty Products Division $ 44.0 $ 11.9 $ (1.2) $ 54.8 $ 44.0 $ 10.0 $ (0.7) $ 53.2 -------- -------- ------- -------- -------- -------- ----- -------- Total Reported Net Sales $ 248.3 $ 111.6 $ (1.9) $ 358.0 $ 256.8 $ 97.4 $ (0.9) $ 353.3 Gross Profit $ 73.8 $ 61.0 $ - $ 134.8 $ 73.3 $ 45.2 $ 8.1 $ 126.5 % of Net Sales 29.7% 37.7% 28.5% 35.8% Operating Profit $ 28.8 $ 26.2 $ - $ 55.0 $ 27.2 $ 11.5 $ 8.1 $ 46.8 % of Net Sales 11.6% 15.4% 10.6% 13.3%
* Adjustments due to the elimination of intercompany sales and, in 2002, the inventory step-up charge. RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO EBITDA:
(Dollars in Millions) CHD As Reported Armkel ----------- ---------- Net Cash Provided by $ 28.7 $ (1.4) (Used in) Operating Activities Interest Expense $ 5.2 $ 8.0 Current Income Tax Provision $ 7.2 $ 3.1 Proceeds from Affiliates $ 0.7 $ - Change in Working Capital $ (2.9) $ 16.6 Interest Income $ (0.3) $ (0.3) Other $ (2.1) $ 2.0 --------- --------- EBITDA $ 36.5 $ 28.0 ========= =========
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) - -------------------------------------------------------
Three Months Ended - ----------------------------------------------------------------------------------------------------------------------------- (In thousands, except per share data) Mar. 28, 2003 Mar. 29, 2002 - ----------------------------------------------------------------------------------------------------------------------------- Net Sales $248,298 $256,802 Cost of sales 174,464 183,552 - ----------------------------------------------------------------------------------------------------------------------------- Gross Profit 73,834 73,250 Marketing expenses 16,943 16,832 Selling, general and administrative expenses 28,110 29,191 - ----------------------------------------------------------------------------------------------------------------------------- Income from Operations 28,781 27,227 Equity in earnings of affiliates 8,152 917 Other income (expense), net (4,871) (5,716) - ----------------------------------------------------------------------------------------------------------------------------- Income before taxes and minority interest 32,062 22,428 Income taxes 11,107 7,416 Minority interest 9 89 - ----------------------------------------------------------------------------------------------------------------------------- Net Income $ 20,946 $ 14,923 - ----------------------------------------------------------------------------------------------------------------------------- Net Income Per Share - Basic $0.52 $0.38 Net Income Per Share - Diluted $0.50 $0.36 - ----------------------------------------------------------------------------------------------------------------------------- Dividends Per Share $0.075 $0.075 - ----------------------------------------------------------------------------------------------------------------------------- Weighted average shares outstanding - Basic 39,945 39,267 Weighted average shares outstanding - Diluted 41,852 41,488 - -----------------------------------------------------------------------------------------------------------------------------
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (Unaudited) - -------------------------------------------------
(Dollars in thousands) Mar. 28, 2003 Mar. 29, 2002 - ----------------------------------------------------------------------------------------------------------------------------- Assets - ----------------------------------------------------------------------------------------------------------------------------- Current Assets - -------------- Cash, equivalents and securities $ 67,242 $ 53,852 Accounts receivable 96,831 101,551 Inventories 85,912 101,970 Other current assets 25,204 37,519 - ----------------------------------------------------------------------------------------------------------------------------- Total Current Assets 275,189 294,892 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Property, Plant and Equipment (Net) 240,755 239,375 Equity Investment in Affiliates 136,503 115,336 Intangibles and other assets 333,063 318,873 - ----------------------------------------------------------------------------------------------------------------------------- Total Assets $985,510 $968,476 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Liabilities and Stockholders' Equity - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Short-Term Debt $ 66,418 $ 12,235 Other Current Liabilities 176,038 174,644 - ----------------------------------------------------------------------------------------------------------------------------- Total Current Liabilities 242,456 186,879 - ----------------------------------------------------------------------------------------------------------------------------- Long-Term Debt 273,603 406,995 Other Long-Term Liabilities 101,461 74,893 Stockholders' Equity 367,990 299,709 - ----------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------- Total Liabilities and Stockholders' Equity $985,510 $968,476 - ----------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------
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