SECURITIES AND EXCHANGE COMMISSSION
WASHINGTON, D.C. 20549
_________________________________
Form 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For the Three Months Ended Commission File number 0-6436
June 30, 1994
BLOCK DRUG COMPANY, INC.
(Exact name of registrant as specified in its charter)
New Jersey 22-1375645
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
257 Cornelison Avenue, Jersey City, N.J. 07302
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 434-3000
Indicate by check mark whether the registrant (1) has filed all Commission
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 periods that the
registrant is 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 close of the period covered by this report.
Class Outstanding at June 30, 1994
Common Stock - Class A 11,848,651
Common Stock - Class B 7,704,400
<PAGE>
BLOCK DRUG COMPANY, INC.
INDEX TO FORM 10-Q
JUNE 30, 1994
____________________________
Part I - Financial Information - Unaudited Page No.
Consolidated Balance Sheets - June 30, 1994
and March 31, 1994 (Audited) 2
Consolidated Statements of Income for the three
ended June 30, 1994 and 1993 3
Condensed Consolated Statements of Cash Flows
for the three months ended June 30, 1994 and 4
1993.
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of Operating
Results and Financial Condition 6 - 7
Part II - Other Information 8
<PAGE>
<TABLE>
BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(UNAUDITED)
ASSETS JUNE 30, 1994 March 31, 1994
<S> <C> <C>
Current Assets:
Cash $ $ 8,896,000
Marketable Securities, at cost, which
approximates market value 27,192,000 19,338,000
Accounts receivable, less allowances
of $2,618,000 (6/30/94) and
$2,709,000 (3/31/94) 100,717,000 97,814,000
Inventories:
Raw and packaging materials 28,205,000 32,398,000
Finished goods 64,038,000 56,588,000
Other current assets 29,640,000 34,079,000
------------ ------------
Total Current Assets 249,792,000 249,113,000
Property, Plant and Equipment, less
accumulated depreciation of $85,968,000
(6/30/94) and $81,940,000 (3/31/94) 211,462,000 207,474,000
Long Term Securities at cost; market
value $270,317,000 (6/30/94) and
$281,601,000 (3/31/94) 267,993,000 275,574,000
Goodwill and Other Intangible Assets-
net of amortization 21,410,000 21,721,000
Other Assets 20,766,000 17,186,000
------------ ------------
Total Assets $771,423,000 $771,068,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes and Bonds payable $105,182,000 $114,983,000
Accounts payable and accrued expenses 94,070,000 88,359,000
Income taxes payable 8,876,000 10,056,000
Dividends payable 3,080,000 3,078,000
------------ ------------
Total Current Liabilities 211,208,000 216,476,000
Notes and Bonds payable 13,940,000 17,880,000
Deferred compensation and other payables 10,000,000 10,167,000
Deferred Income Taxes 11,470,000 11,424,000
------------ ------------
Total Liabilities 246,618,000 255,947,000
Stockholders' Equity:
Class A Common Stock, non-voting, par
value $.10-15,000,000 shares authorized,
11,848,651 (6/30/94) and 11,839,501 (3/31/94)
shares issued and outstanding 1,185,000 1,184,000
Class B Common Stock par value $.10-
30,000,000 shares authorized, 7,704,400
(1994&1993) shares issued and outstanding 770,000 770,000
Capital in excess of par value 173,653,000 173,372,000
Retained earnings 358,343,000 349,500,000
Cumulative foreign currency translation
adjustment (9,146,000) (9,705,000)
------------ ------------
Total Stockholders' Equity 524,805,000 515,121,000
------------ ------------
Total Liabilities & Stockholders' Equity $771,423,000 $771,068,000
</TABLE> ============= ============
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See notes to consolidated financial statements.
<PAGE>
<TABLE>
BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
JUNE 30TH
1994 1993
---- ----
Revenues:
<S> <C> <C>
Net Sales $159,994,000 $150,480,000
Interest, Dividends
and Other Income 6,807,000 6,220,000
------------ ------------
166,801,000 156,700,000
Cost and Expenses:
Cost of Goods Sold 50,854,000 49,911,000
Selling, General and
Administrative 100,382,000 86,464,000
------------ ------------
151,236,000 136,375,000
Income Before Income Taxes 15,565,000 20,325,000
Income Taxes 3,642,000 4,675,000
------------ ------------
Net Income $ 11,923,000 $ 15,650,000
============ ============
Average Number of
Shares Outstanding 19,546,368 19,516,728 (1)
Net Income per
Share of Common Stock $ .61 $ .80 (1)
=========== ==========
Cash Dividends per
Share of Class A
Common Stock $ .26 $ .25
=========== ==========
</TABLE>
(1) RESTATED TO REFLECT 3% STOCK DIVIDEND
-3-
See notes to consolidated financial statements.
<PAGE>
<TABLE>
BLOCK DRUG COMPANY INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED)
<CAPTION>
THREE MONTHS ENDED
JUNE 30
1994 1993
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES $_15,886,000 $ 19,357,000
CASH FLOW FROM INVESTING ACTIVITIES
Additions to Property Plant & Equipment ( 7,374,000) ( 8,096,000)
Proceeds from Sales of Long-Term Securities 2,395,000 4,171,000
Purchases of Long-Term Securities (17,304,000)
(Increase) in Marketable Securities, Net _(_3,053,000) ___2,383,000
Net Cash Used in Investing Activities _( 8,032,000) _(18,846,000)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid to Shareholders ( 3,080,000) ( 2,809,000)
Payments of Notes Payable ( 4,880,000) ( 236,000)
Increase (Decrease) in Short-Term Debt (_8,861,000) __2,633,000
Net Cash (Used) in Financing Activities (16,821,000 ( 412,000)
Effect of Exchange Rates on Cash _____71,000 ____127,000
Increase (Decrease) in Cash ( 8,896,000) 226,000
Cash Beginning of Year ___8,896,000 __6,627,000
Cash, End of Period $ 0 $ 6,853,000
============= ============
SUPPLEMENTAL CASH FLOW DATA
Cash Paid During the Year:
Interest $ 2,272,900 $ 1,863,945
Income taxes $ 3,619,600 $ 3,062,010
</TABLE>
-4-
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying consolidated
financial statements include all adjustments (consisting of
only normal recurring adjustments) necessary for a fair
presentation of the data for the interim periods.
2. During the three months ended June 30, 1994, the Company reduced
its net borrowings by $13,741,000 mainly from lines of credit from
various banks bearing interest at variable rates.
-5-
<PAGE>
BLOCK DRUG COMPANY, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL CONDITION
Operating Results
Sales of $160.0 million in the first quarter ended June
30, 1994 exceeded first quarter sales of the prior year by
6%. Foreign sales were even with the prior year partially
due to a stronger U.S. dollar relative to foreign currencies.
Domestic sales were higher due to selective price increases
and unit gains.
Interest, dividends and other income increased in the
current quarter from the comparable year-ago period
principally due to increased investment in marketable and
long term securities.
The cost of goods sold percentage to sales was 31.8% and
33.2% in the first quarter of the current and prior year,
respectively. These percentages were affected by selective
price increases and the mix of products sold.
Selling, general and administrative expenses, most of
which are related to advertising and promotional activities,
were 62.7% and 57.5% of sales in the first quarter of the
current and prior year, respectively. These expenses have
increased to reflect a major spending program to increase
advertising and promotion behind core business to build brand
equities and meet significant competition.
Due to the above factors income before income taxes were
9.7% of sales in the first quarter of the current year and
13.5% in the same period last year.
The effective income tax rates of 23.4% and 23.0% in the
first quarter of the current and prior year, respectively,
reflect tax-exempt interest from government securities and
income from the lower tax areas of Puerto Rico and Ireland.
-6-
<PAGE>
Financial Condition
Cash decreased in the current quarter ended June 30,1994
from year-end March 31, 1994 by $8.9 million. The decrease
resulted primarily from decreases in debt and an increase in
capital expenditures, accounts receivable, inventories and
other assets partially offset by an increase in accrued
expenses and decrease in other current assets. The increase
in accounts receivable was partially due to higher sales.
In the prior year first quarter ended June 30, 1993 cash
increased to $6.9 million from $6.6. million at year-end
March 31, 1993. The increase resulted primarily from
increases in short-term debt, accrued expenses and income
taxes payable together with a decrease in accounts
receivable, offset by increases in other current assets and
capital expenditures.
-7-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8K
(b) Reports on Form 8K - there were no reports on Form
8K for the three months ended
June 30, 1994
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.
BLOCK DRUG COMPANY, INC.
(Registrant)
August 12, 1994 MELVIN KOPP
--------------- ------------------------------
DATE Melvin Kopp
Senior Vice President &
Chief Financial Officer
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