-----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, Vuex5dpFUKOjA4Cmgj+cgbHmOXa3D5Oo9eNi+yu2r9wYcI/VRIrwKEpgV4qWwxQS 3pZyr1ju1+SFgATe/vJjMw== 0000313927-97-000103.txt : 19970508 0000313927-97-000103.hdr.sgml : 19970508 ACCESSION NUMBER: 0000313927-97-000103 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970328 FILED AS OF DATE: 19970507 SROS: NYSE 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10585 FILM NUMBER: 97597290 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 10-Q 1 FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarter ended March 28, 1997 Commission file No. 1-10585 CHURCH & DWIGHT CO., INC. (Exact name of registrant as specified in its charter) DELAWARE 13-4996950 (State of incorporation) (I.R.S. Employer Identification No.) 469 NORTH HARRISON STREET, PRINCETON, N.J. 08543-5297 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (609) 683-5900 ------------------------- 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 twelve 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 As of May 2, 1997, there were 19,502,459 shares of Common Stock outstanding. ================================================================================ 1 of 8 PART I - FINANCIAL INFORMATION CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) THREE MONTHS ENDED ------------------ MARCH 28, MARCH 29, (IN THOUSANDS, EXCEPT PER SHARE DATA) 1997 1996 - -------------------------------------------------------------------------------- Net Sales $ 129,621 $ 121,548 Cost of sales 74,761 69,786 --------- --------- Gross profit 54,860 51,762 Selling, general and administrative expenses 48,680 47,032 --------- --------- Income from Operations 6,180 4,730 Equity in joint venture income 1,416 1,272 Investment income 415 312 Other income (expense) 290 (13) Interest expense (82) (135) --------- --------- Income before taxes 8,219 6,166 Income taxes 2,992 2,318 --------- --------- Net Income 5,227 3,848 Retained earnings at beginning of period 182,069 169,438 --------- --------- 187,296 173,286 Dividends paid 2,144 2,148 --------- --------- Retained earnings at end of period $ 185,152 $ 171,138 ================================================================================ Weighted average shares outstanding 19,476 19,526 - -------------------------------------------------------------------------------- Earnings Per Share: Net income per share $ .27 $ .20 ================================================================================ 2 of 8 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS ---------------------------
MARCH 28, DECEMBER 31, 1997 1996 ------------------------------- (DOLLARS IN THOUSANDS) (UNAUDITED) ================================================================================ Assets ================================================================================ Current Assets Cash and cash equivalents $ 18,358 $ 22,902 Short-term investments 4,010 5,011 Accounts receivable 48,402 41,837 Inventories (Note 2) 53,887 48,887 Deferred income taxes 11,737 11,962 Prepaid expenses 5,713 4,920 Current portion of note receivable 1,001 -- --------- --------- Total Current Assets 143,108 135,519 - ------------------------------------------------------------------------------- Property, Plant and Equipment (Note 3) 135,985 138,371 Note Receivable from Joint Venture 9,999 11,000 Equity Investment in Joint Venture 16,229 16,211 Long-Term Supply Contract 3,179 3,314 Goodwill 3,556 3,556 ============================================================================== Total Assets $ 312,056 $ 307,971 ============================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY ============================================================================== Current Liabilities Accounts payable and accrued expenses $ 90,343 $ 93,375 Income taxes payable 7,915 5,379 --------- --------- Total Current Liabilities 98,258 98,754 --------- --------- Long-Term Debt 7,500 7,500 Deferred Income Taxes 19,909 20,005 Deferred Liabilities 3,369 2,392 Nonpension Postretirement and Postemployment Benefits 14,067 14,008 STOCKHOLDERS' EQUITY Preferred Stock - $1 par value Authorized 2,500,000 shares, none issued -- -- Common Stock - $1 par value Authorized 100,000,000 shares, issued 23,330,494 shares 23,330 23,330 Additional paid-in capital 33,588 33,364 Retained earnings 185,152 182,069 Cumulative translation adjustments (479) (194) --------- --------- 241,591 238,569 Less common stock in treasury, at cost- 3,824,135 shares in 1997 and 3,878,435 shares in 1996 72,089 72,708 Due from officers (549) (549) - ------------------------------------------------------------------------------- Total Stockholders' Equity 168,953 165,312 =============================================================================== Total Liabilities and Stockholders' Equity $ 312,056 $ 307,971 ===============================================================================
3 of 8 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited)
THREE MONTHS ENDED ------------------------ MARCH 28, MARCH 29, (DOLLARS IN THOUSANDS) 1997 1996 - -------------------------------------------------------------------------------- CASH FLOW FROM OPERATING ACTIVITIES - -------------------------------------------------------------------------------- Net Income $ 5,227 $ 3,848 Adjustments to reconcile net income to net cash used in operating activities: Depreciation, depletion and amortization 3,449 3,448 Deferred income taxes 140 (334) Equity in joint venture income (1,416) (1,272) Other (112) 5 Change in assets and liabilities: Decrease in short-term investments 1,001 6 (Increase) in accounts receivable (6,693) (10,505) (Increase) in inventories (5,064) (4,399) (Increase) decrease in prepaid expenses (797) 35 (Decrease) increase in accounts payable (2,876) 1,438 Increase in income taxes payable 2,570 1,334 Increase in other liabilities 1,036 544 ================================================================================ NET CASH (USED IN) OPERATING ACTIVITIES (3,535) (5,852) CASH FLOW FROM INVESTING ACTIVITIES ================================================================================ Additions to property, plant and equipment (1,107) (1,101) Distributions from joint venture 1,398 1,381 Repayment of officer loans -- 412 ================================================================================ NET CASH PROVIDED BY INVESTING ACTIVITIES 291 692 CASH FLOW FROM FINANCING ACTIVITIES ================================================================================ Short-term borrowing -- 5,000 Payment of cash dividends (2,144) (2,148) Proceeds from stock options exercised 869 68 Purchase of treasury stock (25) (45) ================================================================================ NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITES (1,300) 2,875 NET CHANGE IN CASH AND CASH EQUIVALENTS (4,544) (2,285) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 22,902 11,355 ================================================================================ CASH AND CASH EQUIVALENTS AT END OF PERIOD $18,358 $ 9,070 ================================================================================
4 of 8 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (Unaudited) 1. The consolidated balance sheet as of March 28, 1997, the consolidated statements of income and retained earnings for the three months ended March 28, 1997 and March 29, 1996 and the consolidated statements of cash flow for the three months then ended have been prepared by the Company without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flow at March 28, 1997 and for all periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 1996 annual report to shareholders. The results of operations for the period ended March 28, 1997 are not necessarily indicative of the operating results for the full year.
2. Inventories consist of the following: MARCH 28, DEC. 31, (in thousands) 1997 1996 ================================================================================ Raw materials and supplies $14,512 $13,031 Work in Process 84 144 Finished goods 39,291 35,712 --------------------- $53,887 $48,887 ================================================================================
3. PROPERTY, PLANT AND EQUIPMENT CONSIST OF THE FOLLOWING: MARCH 28, DEC. 31, (IN THOUSANDS) 1997 1996 ================================================================================ Land $3,190 $3,195 Buildings and improvements 64,778 64,810 Machinery and equipment 155,635 155,635 Office equipment and other assets 11,853 11,835 Mineral rights 5,931 5,931 Construction in progress 2,486 1,641 ------------------------------ 243,873 243,047 Less accumulated depreciation, depletion and amortization 107,888 104,676 -------------------------------- Net Property, Plant and Equipment $135,985 $138,371 ================================================================================
5 of 8 CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ (Unaudited) 4. Equity Investment in Joint Venture The following table reflects summarized financial information for the Armand Products Company joint venture. The Company accounts for its 50 percent interest in the joint venture under the equity method. Product and services are provided to the Armand Products Company by the joint venture partners at cost. As a result, the following information would not be indicative of the financial position or results of operation had the joint venture operated on a stand-alone basis.
THREE MONTHS ENDED ------------------------ MARCH 28, MARCH 29, (IN THOUSANDS) 1997 1996 ================================================================================ Net sales $10,139 $ 9,936 Gross profit 3,434 3,178 Net income 2,606 2,318 Company's share in net income 1,303 1,159 Elimination of Company's share of intercompany interest expense 113 113 --------------------- Equity in joint venture income $ 1,416 $ 1,272 ================================================================================
5. Net income per share is computed based upon the weighted average number of common shares outstanding during the period. Common equivalent shares have been excluded because their effect was not material. 6. Accounting Change In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 - "Earnings per Share" ("SFAS 128") which specifies the computation, presentation and disclosure requirements for EPS. SFAS 128 replaces the presentation of primary and fully diluted EPS pursuant to Accounting Principles Board Opinion No. 15 - "Earnings per Share" ("APB 15") with the presentation of basic and diluted EPS. Basic EPS excludes dilution and is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The Company is required to adopt SFAS 128 with its December 31, 1997 financial statements and restate all prior-period EPS data. The Company will continue to account for EPS under APB 15 until that time. Under SFAS 128, the Company's basic EPS for the three months ended March 28, 1997 and March 29, 1996 was $.27 and $.20 per share, respectively, and the Company's diluted EPS for the three months ended March 28, 1997 and March 29, 1996 was $.26 and $.20 per share, respectively. 6 of 8 MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ Results of Operations - --------------------- For the quarter ended March 28, 1997, net income was $5.2 million or $.27 per share. This compares with $3.8 million or $.20 per share for the first quarter of 1996. Net sales for the quarter were $129.6 million, representing an increase of $8.1 million or 6.6% versus the same period of 1996. The increase is primarily due to unit volume gains of ARM & HAMMER(R) Powder Laundry Detergent and higher sales of ARM & HAMMER Dental Care(R) and ARM & HAMMER Deodorant Anti-Perspirant. These increases were partially offset by lower sales of ARM & HAMMER Carpet and Room Deodorizer and ARM & HAMMER Liquid Laundry Detergent, the latter of which had an extremely strong first quarter in 1996 as a result of the relaunch to a 4/10-cup product. Specialty Product sales were essentially unchanged. Gross margin was 42.3% in the first quarter, as compared with 42.6% in the first quarter of 1996. This slight decrease is primarily due to the cost of the ARM & HAMMER Dental Care buy-one get one free promotion. This decrease was partially offset by lower manufacturing and distribution costs. Selling, general and administrative expenses increased $1.6 million or 3.5% versus last year. Selling expenses increased mostly due to higher levels of advertising of ARM & HAMMER Dental Care and ARM & HAMMER Deodorant Anti-Perspirant and higher promotional support for ARM & HAMMER Powder Laundry Detergent. This increase was partially offset by lower promotion costs for ARM & HAMMER Carpet and Room Deodorizer and ARM & HAMMER Liquid Laundry Detergent. General and administrative expenses were unchanged versus last year. The Company's Armand Products Company joint venture saw sales and earnings up slightly from the first quarter of 1996. Interest expense decreased slightly as a result of having no short-term debt outstanding while investment income was higher due to an increase in cash available for investing. Other income in the current year resulted from foreign exchange gains. The effective tax rate for the quarter was 36.4%, down from 37.6% from a year ago. This is primarily a result of the utilization of foreign operating loss carry-forwards in the current quarter. Liquidity and Capital Resources - ------------------------------- The Company considers cash and short-term investments as the principal measurement of its liquidity. At March 28, 1997, cash, including cash equivalents and short-term investments totaled $22.4 million as compared to $27.9 million at December 31, 1996. During the first quarter of 1997, operating activities required $3.5 million of additional investment, primarily in working capital. The Company received $1.4 million in distributions from its Armand Products joint venture and $.9 million of proceeds from stock options exercised. Significant expenditures include the payment of cash dividends of $2.1 million and additions to property, plant and equipment of $1.1 million. PART II - OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- No reports on Form 8-K were filed for the three months ended March 28, 1997. 7 of 8 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. CHURCH & DWIGHT CO.,INC. ----------------------------- (REGISTRANT) DATE: May 7, 1997 /s/ Zvi Eiref -------------- ----------------------------- ZVI EIREF VICE PRESIDENT FINANCE DATE: May 7, 1997 /s/ Gary P. Halker -------------- ----------------------------- GARY P. HALKER VICE PRESIDENT, CONTROLLER AND CHIEF INFORMATION OFFICER EX-27 2 FINANCIAL DATA SCHEDULE
5 1000 3-MOS DEC-31-1997 JAN-01-1997 MAR-28-1997 18,358 4,010 49,912 1,510 53,887 143,108 243,873 107,888 312,056 98,258 7,500 0 0 23,330 145,623 312,056 129,621 129,621 74,761 74,761 0 50 82 8,219 2,992 5,227 0 0 0 5,227 .27 .27
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