0000950130-95-001598.txt : 19950815 0000950130-95-001598.hdr.sgml : 19950815 ACCESSION NUMBER: 0000950130-95-001598 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TAMBRANDS INC CENTRAL INDEX KEY: 0000096277 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 131366500 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08714 FILM NUMBER: 95563495 BUSINESS ADDRESS: STREET 1: 777 WESTCHESTER AVE CITY: WHITE PLAINS STATE: NY ZIP: 10604 BUSINESS PHONE: 9146966000 FORMER COMPANY: FORMER CONFORMED NAME: TAMPAX INC DATE OF NAME CHANGE: 19840502 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------------------------- FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1995 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-8714 TAMBRANDS INC. ---------------------------------------- (Exact name of registrant as specified in its charter) Delaware 13-1366500 -------- ---------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) 777 Westchester Avenue, White Plains, New York 10604 ---------------------------------------------- ----- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (914) 696-6000 -------------- 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 . ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: Common Stock, par value $.25 per share: 36,633,767 shares as of July 31, 1995 Index to Exhibits is set forth at page 10. PART I - FINANCIAL INFORMATION Item 1. Financial Statements ------- -------------------- TAMBRANDS INC. AND SUBSIDIARIES Consolidated Statements of Earnings and Retained Earnings Three and Six Months Ended June 30, 1995 and 1994 (in thousands, except per share amounts) (Unaudited)
Three Months Ended June 30 Six Months Ended June 30 -------------------------- ------------------------ 1995 1994 1995 1994 -------- -------- -------- -------- Net sales $176,338 $165,624 $343,285 $304,797 Cost of products sold 58,428 52,590 113,732 96,511 -------- -------- -------- -------- Gross profit 117,910 113,034 229,553 208,286 Selling, administrative and general expenses: Marketing, selling and distribution 66,604 65,251 125,288 109,573 Administrative and general 13,907 13,557 27,622 27,572 -------- -------- -------- -------- 80,511 78,808 152,910 137,145 -------- -------- -------- -------- Operating income 37,399 34,226 76,643 71,141 Interest, net and other (2,594) (2,468) (5,028) (4,392) Litigation charge (11,396) -- (11,396) -- -------- -------- -------- -------- Earnings before provision for income taxes 23,409 31,758 60,219 66,749 Provision for income taxes 10,372 11,751 24,360 24,698 -------- -------- -------- -------- Net earnings 13,037 20,007 35,859 42,051 Retained earnings at beginning of period 463,761 437,112 457,071 430,822 -------- -------- -------- -------- 476,798 457,119 492,930 472,873 -------- -------- -------- -------- Dividends 16,112 15,375 32,256 31,184 Net issuance of treasury stock (54) 352 (66) 297 -------- -------- -------- -------- 16,058 15,727 32,190 31,481 -------- -------- -------- -------- Retained earnings at end of period $460,740 $441,392 $460,740 $441,392 ======== ======== ======== ======== Net earnings per share $0.36 $0.54 $0.98 $1.13 ======== ======== ======== ======== Dividends per share $0.44 $0.42 $0.88 $0.84 ======== ======== ======== ======== Average shares of Common Stock outstanding during the period 36,656 36,781 36,667 37,284
See accompanying notes to consolidated financial statements on page 5. -2- TAMBRANDS INC. AND SUBSIDIARIES Consolidated Balance Sheets June 30, 1995 and December 31, 1994 (in thousands)
1995 (Unaudited) 1994 ----------- --------- ASSETS ------ Current assets: Cash and cash equivalents $ 11,552 $ 13,876 Accounts receivable, less allowance for doubtful accounts of $1,435 in 1995 and $1,456 in 1994 115,651 80,593 Inventories: Raw materials 15,133 12,967 Finished goods 34,341 24,990 --------- -------- 49,474 37,957 Deferred taxes on income 18,380 18,892 Prepaid expenses and other current assets 25,100 25,818 --------- -------- Total current assets 220,157 177,136 Property, plant and equipment 333,495 314,457 Less accumulated depreciation (130,514) (120,142) --------- -------- 202,981 194,315 Intangible and other assets 7,024 7,624 --------- -------- Total assets $430,162 $379,075 ========= ======== LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ Current liabilities: Short-term borrowings $ 95,623 $ 70,517 Accounts payable 39,085 31,530 Accrued expenses 91,385 80,381 Taxes on income 17,826 20,732 --------- -------- Total current liabilities 243,919 203,160 Medium-term notes payable 65,543 59,983 Deferred taxes on income 22,522 21,450 Postemployment benefits 12,053 12,468 --------- -------- Total liabilities 344,037 297,061 Shareholders' equity: Common Stock 10,887 10,887 Retained earnings 460,740 457,071 Cumulative foreign currency translation adjustment (10,374) (13,621) Treasury stock (373,791) (371,016) Unamortized value of restricted stock and pension costs (1,337) (1,307) --------- -------- Total shareholders' equity 86,125 82,014 --------- -------- Total liabilities and shareholders' equity $430,162 $379,075 ========= ========
See accompanying notes to consolidated financial statements on page 5. -3- TAMBRANDS INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows Six Months Ended June 30, 1995 and 1994 (in thousands) (Unaudited)
1995 1994 -------- -------- Cash Flows from Operating Activities: Net earnings $35,859 $42,051 Adjustments to reconcile Net earnings to Net Cash Provided by Operating Activities: Depreciation and amortization 12,403 11,424 Deferred income taxes 1,489 65 Litigation charge 8,686 -- Restructuring and other (2,551) (6,301) Change in: Accounts receivable (25,850) (14,656) Inventories (10,705) (2,007) Prepaid expenses and other current assets 768 2,487 Taxes on income (369) 6,874 Accounts payable and accrued expenses 1,081 14,144 ------- ------- Net Cash Provided by Operating Activities 20,811 54,081 ------- ------- Cash Flows from Investing Activities: Capital expenditures (18,359) (18,866) Proceeds from sales of property, plant and equipment 427 1,750 Proceeds from sales of marketable securities -- 639 ------- ------- Net Cash Used in Investing Activities (17,932) (16,477) ------- ------- Cash Flows from Financing Activities: Payment of dividends (32,256) (31,184) Purchase of shares for treasury (4,326) (68,458) Short-term debt changes 25,106 30,482 Issuance of Medium-Term Notes 5,555 29,979 Proceeds from exercise of stock options and other 1,414 961 ------- ------- Net Cash Used in Financing Activities (4,507) (38,220) ------- ------- Effect of Exchange Rate Changes on Cash (696) 526 ------- ------- Net Decrease in Cash and Cash Equivalents (2,324) (90) Cash and Cash Equivalents at Beginning of Period 13,876 15,298 ------- ------- Cash and Cash Equivalents at End of Period $11,552 $15,208 ======= =======
See accompanying notes to consolidated financial statements on page 5. -4- Notes to Consolidated Financial Statements ------------------------------------------ 1. The financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of the information contained therein, and are subject to audit and adjustment at the end of the fiscal year, with the exception of the Consolidated Balance Sheet at December 31, 1994, which has been derived from the audited financial statements at that date. 2. In the second quarter, the Company provided $11.4 million ($8.7 million after tax) for expenses related to several legal proceedings related to previously divested non-tampon businesses and for a securities class action filed in 1993. Item 2. Management's Discussion and Analysis of Financial ------- -------------------------------------------------- Condition and Results of Operations ----------------------------------- Results of Operations --------------------- Second-quarter Net sales of $176.3 million increased 6% compared with the same period of the prior year. The increase was primarily due to higher worldwide unit sales volumes, particularly in Europe, principally as a result of the stabilization of the U.K. sales volumes and the success of the Tampax Satin product in France, launched late in 1994. The impact, primarily in the United States, of a change in sales mix to include more value-priced pack sizes and products was mitigated by the continuing benefit of a weakened U. S. dollar. For the six months ended June 30, Net sales were up 13% compared with the first half of 1994. Strong sales volumes in the United States and Europe were augmented by favorable foreign exchange translations, but partially offset by lower average prices due to the sales mix. Gross profit as a percent of Net sales was 66.9% for both the second quarter and six months of 1995 versus 68.2% and 68.3% for the corresponding periods of 1994. This reduction in both periods is principally due to product mix changes and increasing costs for raw and packaging materials. Marketing, selling and distribution expenses were 2% and 14% above the second quarter and first half of 1994, respectively. The comparatively higher spending levels in the six month period of 1995 reflect support of the Satin Touch launch in the United States in the first quarter of 1995 and overall stronger levels of promotional support in Europe, Latin America and Asia/Pacific against a relatively low base in the first quarter of 1994. The tampon category grew in the United States during the current periods and Tampax market shares exhibited improvements over the prior year. -5- Administrative and general expenses continued to be relatively flat versus comparable periods of the prior year as the result of management's continuing efforts to contain overhead costs. Operating income for the three and six months rose 9% and 8%, respectively, from 1994. The increase for the quarter was principally attributable to higher unit sales, partially offset by the lower gross profit discussed earlier but assisted by favorable foreign exchange translations. In addition to these factors, the increased brand support levels reduced the favorability in the first half of 1995. Interest, net and other were approximately equal with prior years due to a rise in average interest rates, partially offset by lower foreign exchange costs. In the second quarter of 1995, the Company provided $11.4 million, for several previously disclosed legal proceedings related to previously divested non-tampon businesses and for settlement of a securities class action filed in 1993. The effective tax rate was 44% and 40%, respectively, for the second quarter and six month periods of 1995 versus 37% for both periods of 1994. The higher effective tax rates in 1995 were primarily due to the litigation charge, the cost of which is not fully deductible for tax purposes. Exclusive of the litigation charge, the 1995 effective tax rate would have been 38% for the six month period. The increase exclusive of the litigation charge, is primarily due to the mix of domestic and foreign taxable income, at varying rates. Earnings per share were $.36 and $.98 for the second quarter and six months, respectively, versus $.54 and $1.13 for the comparable periods of the prior year. The decline in Earnings per share for both the quarter and the half-year was due to the litigation charge. Exclusive of the litigation charge, Earnings per share would have been $.59 and $1.21, respectively, for the second quarter and first six months of 1995. Earnings per share excluding the litigation charge increased at a higher rate than Net earnings because fewer shares were outstanding on average during the periods. Outlook ------- The worldwide market for consumer products will continue to be highly competitive and disinflationary. The Company expects a heightened level of advertising and promotional activities and new product introductions from competitors, along with continued activity in the private label sector. The Company will be relaunching an upgraded version of its original and best selling Tampax tampon line in the United States in the Fall of 1995, and intends to proceed with its aggressive support of the Tampax tampon franchise with highly competitive levels of advertising and promotional activities in the United States and Europe. As consumers continue to focus on value-priced goods, management expects current pricing pressures to be ongoing. -6- The cost of manufacturing likely will continue to be impacted by escalating material costs. Management intends to continue with productivity initiatives to attempt to mitigate the effect of manufacturing cost increases. Financial Condition ------------------- At June 30, 1995 there was a working capital deficit of $23.8 million compared with a deficit of $26.0 million at the prior year end. The net reduction in the working capital deficit primarily reflects higher accounts receivable on strong sales in the current period and expected recoveries from insurance, offset by increased short-term borrowings. Additionally, inventories were increased to support the relaunch of the improved Tampax product and to smooth manufacturing throughput. Capital expenditures of $18.4 million represent the Company's continued investment in equipment to improve product quality and productivity, modernize production facilities and reduce costs. Spending levels in 1995 are expected to approximate those of 1994. In the second quarter, the Company utilized $4.3 million to acquire shares for treasury purposes in its Common Stock repurchase program. The repurchase program will continue as conditions warrant. The Company anticipates that its future cash requirements will be met by its cash flows from operations and the ability to borrow from a variety of sources. At June 30, 1995 total Shareholders' equity was $86.1 million compared with $82.0 million at December 31, 1994. The net increase in Retained earnings of $3.7 million was augmented by a $3.2 million reduction in cumulative translation adjustments and offset by the effect of treasury stock activity, driven by the share repurchase program. -7- PART II - OTHER INFORMATION --------------------------- Item 1. Legal Proceedings ------- ----------------- The Company or a subsidiary is a defendant in a small number of product liability lawsuits based on allegations that toxic shock syndrome ("TSS") was contracted through the use of tampons. A small number of pre-suit claims involving similar TSS allegations have also been asserted. The damages alleged vary from case to case and often include claims for punitive damages. One TSS lawsuit, served on the Company in July 1994, purports to be a class action on behalf of all women who have contracted TSS through the use of tampons. The Company is vigorously contesting the plaintiffs' motion for class certification, as well as the allegations contained in the plaintiffs' complaint. The Company and three of its former officers were named as defendants in certain shareholder lawsuits filed in 1993 in the United States District Court for the Southern District of New York and consolidated under the caption In Re Tambrands --------------- Inc. Securities Litigation. The parties stipulated to the certification of the -------------------------- consolidated lawsuit as a class action on behalf of all purchasers of the Company's common stock during the period December 14, 1992 through April 28, 1993. The complaint alleged that the Company's disclosures during the class period contained material misstatements and omissions concerning its anticipated future earnings and thereby allegedly violated Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. As announced on July 14, 1995, plaintiffs and defendants in this litigation have reached agreement on settlement, subject to court approval. The Company was a nominal defendant in three purported shareholder derivative lawsuits filed in the Supreme Court of the State of New York for Westchester County and consolidated into a single action. Named collectively in the consolidated complaint as individual defendants were the Company's directors (other than Mr. Fogarty), certain former directors and three of its former officers. The complaint alleged that the officer-defendants exposed the Company to liability in the shareholder class action described in the preceding paragraph and misappropriated corporate opportunities by trading in the Company's stock on the basis of nonpublic information. One of the former officers was also alleged to have received improper reimbursements from the Company for alleged personal expenses. The director-defendants were alleged to have acquiesced in the aforesaid alleged violations. The complaint sought to recover on behalf of the Company an unspecified amount of damages from the individual defendants. No relief was sought against the Company. In September 1994, the Court granted defendants' motion to dismiss the complaint for failure to make a demand upon the Board of Directors. Plaintiffs have appealed the dismissal. -8- The Company is involved, either as a named defendant or as the result of contractual indemnities, in certain litigation arising out of the operations of certain divested subsidiaries. There are certain other legal proceedings pending against the Company arising out of its normal course of business in which claims for monetary damages are asserted. While it is not feasible to predict the outcome of these legal proceedings and claims with certainty, management is of the belief that any ultimate liabilities for damages either are covered by insurance, are provided for in the Company's financial statements or, to the extent not so covered or provided for, should not individually or in the aggregate have a material adverse effect on the Company's financial position. Items 2, 3 and 5 of Part II have been omitted since either the Company's response to the Item would be negative or the Item is inapplicable. Item 4. Submission of Matters to a Vote of Security Holders ------- --------------------------------------------------- At the Annual Meeting of Shareholders held on April 25, 1995, the shareholders of the Company elected 11 directors for a one-year term and approved the Company's 1995 Directors Stock and Deferred Compensation Plan. The number of votes cast at such meeting with respect to each of these matters is as follows:
Votes Votes Votes Broker Matter For Against Withheld Abstentions Non-Votes ---------------------- ---------- -------- -------- ----------- --------- Election of Directors ---------------------- Lilyan H. Affinito 32,778,749 241,435 Paul S. Doherty 32,429,951 590,223 Edward T. Fogarty 32,881,068 139,116 Floyd Hall 32,841,548 178,636 Robert P. Kiley 32,843,096 177,088 John Loudon 32,842,240 177,944 Ruth M. Manton 32,803,774 216,410 John A. Meyers 32,840,719 179,465 H.L. Tower 32,820,890 199,294 Howard B. Wentz, Jr. 32,818,065 202,119 Robert M. Williams 32,853,546 166,638 Approval of 1995 Directors Stock and Deferred Compensation Plan 27,058,297 5,584,112 377,775 -----------------
-9- Further information regarding these matters is set forth in the Company's proxy statement, dated March 10, 1995, and is incorporated herein by reference. Item 6. Exhibits and Reports on Form 8-K ------ -------------------------------- a) Exhibits -------- Exhibit Number Description ------- ----------- 3(1) Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33- 13902), incorporated herein by reference. 3(2) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 24, 1990, filed May 15, 1990 as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1990, incorporated herein by reference. 3(3) Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992, as Exhibit 4(2) to the Company's Report on Form 10-Q for the quarter ended March 31, 1992, incorporated herein by reference. 3(4) By-Laws of the Company, as amended, filed March 31, 1995 as Exhibit 3(4) to the Company's Report on Form 10-K for the year ended December 31, 1994, incorporated herein by reference. 4(1) Description of the rights of security holders set forth in the Certificate of Incorporation of the Company, as amended through April 28, 1987, filed April 30, 1987 as Exhibit 4(a) to the Company's Form S-8 Registration Statement (Reg. No. 33- 13902), incorporated herein by reference. -10- 4(2) Description of the rights of security holders set forth in the Certificate of Amendment of Certificate of Incorporation of the Company, dated April 28, 1992, filed May 15, 1992 as Exhibit 4(2) to the Company's Form 10-Q Report for the quarter ended March 31, 1992, incorporated herein by reference. 4(3) Rights Agreement between the Company and First Chicago Trust Company of New York, as Rights Agent, dated as of October 24, 1989, which includes the Form of Right Certificate as Exhibit A and the Summary of Rights to Purchase Common Shares as Exhibit B, filed October 27, 1989 as Exhibit 1 to the Company's Form 8-A Registration Statement, incorporated herein by reference. 4(4)(a) Indenture dated as of December 1, 1993 between the Company and Citibank, N.A., as trustee, relating to the Company's Medium-Term Note Program, filed March 31, 1994 as Exhibit 4(4)(a) to the Company's Form 10-K Report for the year ended December 31, 1993, incorporated herein by reference. 4(4)(b) Form of Floating Rate Debt Security, filed December 16, 1993 as Exhibit 4-a to the Company's Report on Form 8-K, incorporated herein by reference. 4(4)(c) Form of Fixed Rate Debt Security, filed December 16, 1993 as Exhibit 4-b to the Company's Report on Form 8-K, incorporated herein by reference. 10(1) 1995 Directors Stock and Deferred Compensation Plan, effective as of July 1, 1995, included as Exhibit A to the Company's Proxy Statement, dated March 10, 1995, for the annual meeting of shareholders held on April 25, 1995, incorporated herein by reference. -11- 10(2) Resolution of the Board of Directors of the Company with respect to the compensation of the Chairman of the Board, adopted on April 25, 1995, filed herewith. 10(3) Amendment No. 1, dated as of May 5, 1995, to the Amended and Restated Credit Agreement, dated as of September 6, 1994, by and among the Company, Tambrands Limited, the signatory banks thereto and The Bank of New York, as agent, filed herewith. 12 Computation of Ratio of Earnings to Fixed charges, filed herewith. 27 Financial Data Schedules, filed herewith (in electronic format only). Exhibits 2, 11, 15, 18, 19, 22, 23, 24 and 99 have been omitted as inapplicable. b) Reports on Form 8-K -- ------------------- The Company filed a Report under Item 5 of Form 8-K on April 28, 1995 in order to file a press release, issued by the Company on April 25, 1995, which contained the Company's first-quarter 1995 results. -12- 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. TAMBRANDS INC. --------------------------- (Registrant) /s/ Raymond F. Wright --------------------------- Raymond F. Wright Senior Vice President - Chief Financial Officer and Authorized Signatory Date: August 11, 1995 --------------- -13- EX-10.2 2 RESOLUTION OF BOARD EXHIBIT 10(2) ------------- RESOLUTION OF THE TAMBRANDS INC. BOARD OF DIRECTORS ADOPTED APRIL 25, 1995 ---------------------- RESOLVED, that in consideration of his services as Chairman of the Board of -------- Directors of the Corporation, the Corporation shall pay Howard B. Wentz, Jr. for the period from May 1, 1995 until the Annual Meeting of Shareholders to be held in 1996, a cash fee of $10,000 per month, in addition to the other compensation otherwise payable to him for his services as a non-employee director of the Corporation under the Corporation's standard practices and policies. EX-10.3 3 AMENDMENT 1 TO RESTATED AGREEMENT EXHIBIT 10(3) AMENDMENT NO. 1 =============== AMENDMENT NO. 1 ("this "Amendment"), dated as of May 5, 1995, to the --------- Amended and Restated Credit Agreement, dated as of September 6, 1994 (the "Agreement"), among Tambrands Inc. (the "Company"), Tambrands Limited, the ---------- ------- Lenders party thereto (the "Lenders") and The Bank of New York, as agent (the ------- "Agent"). ------ RECITALS -------- 1. Capitalized terms used herein that are not herein defined shall have the meanings ascribed thereto by the Agreement. 2. The Borrowers have requested that the Agreement be amended as set forth herein. The Agent is willing to amend the Agreement upon the terms and conditions herein contained. Therefore, in consideration of the RECITALS and the terms and conditions herein contained, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Borrowers and the Agent hereby agree that the Agreement be amended in the following respects: 3. Exhibit A is amended in its entirety to read as follows: "Exhibit A --------- COMMITMENTS -----------
COMMITMENT BANK COMMITMENT PERCENTAGE ---- ---------- ---------- The Bank of New York $ 24,000,000 20% Bank Brussels Lambert New York Branch 19,200,000 16% Citibank, N.A. 19,200,000 16% National Westminster Bank, plc 19,200,000 16% Royal Bank of Canada 19,200,000 16% Societe Generale, New York Branch 19,200,000 16% ------------ ----- Totals $120,000,000 100%"
4. The percentages set forth in the definition of "Applicable Margin" in ----------------- paragraph 1.1 are amended to read as follows:
Applicable Period Rate Margin ------ ---- ---------- I. At any time when Eurocurrency Rate .21% the Senior Public Debt Facility Fee Rate .09% Rating is equal to or more favorable than at least two of the following: A+ by Standard & Poor's Ratings Group, A1 by Moody's Investors Service, Inc. and A+ by Fitch Investors Service, Inc. II. At any time when Eurocurrency Rate .24% the Senior Public Debt Facility Fee Rate .11% Rating is equal to or more favorable than at least two of the following (and Period I is not applicable): A-by Standard & Poor's Ratings Group, A3 by Moody's Investors Service, Inc. and A- by Fitch Investors Service, Inc. III. At any time when Eurocurrency Rate .30% the Senior Public Debt Facility Fee Rate .15% Rating is equal to or more favorable than at least two of the following (and Periods I and II are not applicable): BBB by Standard & Poor's Ratings Group, Baa2 by Moody's Investors Service, Inc. and BBB by Fitch Investors Service, Inc. IV. At all other Eurocurrency Rate .40% times Facility Fee Rate .20%
5. The definition of "Indebtedness" contained in paragraph 1.1 is amended ------------ to delete subparagraph (iii) thereof. 6. The definitions of "Consenting Lenders", "Extension Consent Period", ------------------ --------- -------------- "Extension Consent Required Lenders", "Extension Request", "Non-Consenting ----------------------------------- ----------------- -------------- Lender" and "Replacement Lender" are deleted from paragraph 1.1. ------ ------------------ 7. The definition of "Termination Date" contained in paragraph 1.1. is ---------------- amended in its entirety to read as follows: "Termination Date: May 5, 2000." ---------------- 8. Paragraph 2.18 is deleted in its entirety and all references in the Agreement to such paragraph 2.18 are deemed deleted. 9. The percentage per annum contained in paragraph 3.3 is amended to read "0.0625%". 10. Paragraph 8 is amended by adding the following at the end thereof: "8.7 Contingent Obligations. ---------------------- Create, incur, assume or suffer to exist any Contingent Obligation, or permit any Subsidiary so to do, if, after giving effect thereto, the aggregate amount of all Contingent Obligations of the Company and its Subsidiaries on a Consolidated basis (determined in accordance with GAAP) would exceed $10,000,000. 11. Paragraph 9.1 (g) is amended to insert the phrase "and Contingent Obligations" after the word "Indebtedness" in the third line thereof. 12. This Amendment shall not be effective until such time (the "Amendment --------- No. 1 Effective Date") as each of the following conditions has been fulfilled: -------------------- (i) The Agent shall have received an original of this Amendment (i) executed by a duly authorized officer or officers of each of the Borrowers, and (ii) consented to by each of the Lenders. (ii) On and as of the Amendment No. 1 Effective Date, no Default or Event of Default shall have occurred or be continuing. 13. The Borrowers reaffirm and admit the validity and enforceability of the Loan Documents and all of their obligations thereunder, agree and admit that they have no defenses to or offsets against any of their obligations to the Lenders or the Agent under the Loan Documents, and represent and warrant that there exists no Default or Event of Default, and that the representations and warranties contained in the Agreement are true and correct on and as of the date hereof, except such thereof as relate solely to an earlier date. 14. Except as amended hereby, the Loan Documents shall remain in full force and effect, and no amendment of any term or condition of the Agreement herein contained shall be deemed to be an amendment of any other term or condition contained in the Agreement or any other Loan Document or constitute a waiver of any Default or Event of Default. 15. This Amendment may be executed in any number of counterparts all of which, taken together, shall constitute one Amendment. In making proof of this Amendment, it shall only be necessary to produce the counterpart executed and delivered by the party to be charged. 16. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED TO BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. The Borrowers and the Agent have caused this Amendment No. 1 to be duly executed as of the date first above written. TAMBRANDS INC. By: /s/Raymond F. Wright Title: _____________________ TAMBRANDS LIMITED By: /s/Raymond F. Wright Title: _____________________ THE BANK OF NEW YORK, Individually and as Agent By: /s/Howard Bascom Title: Vice President Each of the Lenders hereby consents to the execution and delivery of this Amendment by the Agent: BANK BRUSSELS LAMBERT, NEW YORK BRANCH By: /s/Eric Hollanders /s/Eileen Stekear Title: Senior Vice President Assistant Vice President Credit Department CITIBANK, N.A. By: /s/Anita J. Brickell Title: Vice President NATIONAL WESTMINSTER BANK, plc By: /s/David Apps Title: Vice President ROYAL BANK OF CANADA By: /s/Sheryl L. Greenberg Title: Manager for John Crawford SOCIETE GENERALE, NEW YORK BRANCH By: Robert L. Petersen Title: Vice President EX-12.1 4 COMPUTATION TABLE TAMBRANDS INC. FORM 10-Q PART II, Item 6., Exhibit 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES ------------------------------------------------- (Unaudited) ----------- The following table sets forth the Company's ratio of earnings to fixed charges for the periods indicated.
Three Months Ended June 30 Six Months Ended June 30 -------------------------- ------------------------ 1995 1994 1995 1994 -------- -------- -------- -------- (in thousands, except ratios) ---------------------------- Earnings: Income before income taxes $ 23,409 $ 31,758 $ 60,219 $ 66,749 Fixed charges 2,908 2,478 5,474 4,901 -------- -------- -------- -------- EARNINGS $ 26,317 $ 34,236 $ 65,693 $ 71,650 ======== ======== ======== ======== Fixed charges: Interest portion of operating lease expense: Operating lease expense $ 1,372 $ 1,105 $ 2,819 $ 2,029 Assumed interest factor 0.33 0.33 0.33 0.33 -------- -------- -------- -------- Interest portion of operating lease expense 453 365 930 670 Interest expense 2,455 2,113 4,544 4,231 -------- -------- -------- -------- FIXED CHARGES $ 2,908 $ 2,478 $ 5,474 $ 4,901 ======== ======== ======== ======== Ratio of earnings to fixed charges 9.1 13.8 12.0 14.6 ======== ======== ======== ========
EX-27 5 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM SECOND QUARTER 10Q 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS 6-MOS DEC-31-1995 DEC-31-1995 APR-01-1995 JAN-01-1995 JUN-30-1995 JUN-30-1995 11,552 11,552 0 0 117,086 117,086 (1,435) (1,435) 49,474 49,474 220,157 220,157 333,495 333,495 (130,514) (130,514) 430,162 430,162 243,919 243,919 65,543 65,543 10,887 10,887 0 0 0 0 75,239 75,239 430,162 430,162 176,338 343,285 176,338 343,285 58,428 113,732 58,428 113,732 0 0 0 97 2,455 4,544 23,409 60,219 10,372 24,360 13,037 35,859 0 0 0 0 0 0 13,037 35,859 .36 .98 .36 .98