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
September 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 past90 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 September 30, 1994
Common Stock - Class A 11,860,651
Common Stock - Class B 7,704,400
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BLOCK DRUG COMPANY, INC.
INDEX TO FORM 10-Q
SEPTEMBER 30, 1994
----------------------------
Part I - Financial Information - Unaudited Page No.
Consolidated Balance Sheets - September 30, 1994
and March 31, 1994 2
Consolidated Statements of Income for the three
amd six months ended September 30, 1994 and 1993 3
Condensed Consolidated Statements of Cash Flows
for the six months ended September 30, 1994 4
and 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 9/30/94 3/31/94
<S> <C> <C>
Current Assets:
Cash $ 16,414,000 $ 8,896,000
Marketable Securities, at cost, which
approximates market value 21,102,000 19,338,000
Accounts receivable, less allowances
of $2,605,000 (9/30/94) and
$2,709,000 (3/31/94) 106,662,000 97,814,000
Inventories:
Raw and packaging materials 30,193,000 32,398,000
Finished goods 67,990,000 56,588,000
Other current assets 26,617,000 34,079,000
---------- ----------
Total Current Assets 268,978,000 249,113,000
Property, Plant and Equipment, less
accumulated depreciation of $90,377,000
(9/30/94) and $81,940,000 (3/31/94) 215,617,000 207,474,000
Long Term Securities at cost; market
value $250,691,000 (9/30/94) and
$281,601,000 (3/31/94) 249,473,000 275,574,000
Goodwill and Other Intangible Assets-
net of amortization 21,192,000 21,721,000
Other Assets 22,800,000 17,186,000
------------- ------------
Total Assets $778,060,000 $771,068,000
============= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes and Bonds payable $ 97,525,000 $114,983,000
Accounts payable and accrued expenses 93,603,000 88,359,000
Income taxes payable 6,314,000 10,056,000
Dividends payable 3,083,000 3,078,000
----------- -----------
Total Current Liabilities 200,525,000 216,476,000
Notes and Bonds payable 15,622,000 17,880,000
Deferred compensation and other payables 10,357,000 10,167,000
Deferred Income Taxes 11,894,000 11,424,000
----------- -----------
Total Liabilities 238,398,000 255,947,000
Stockholders' Equity:
Class A Common Stock, non-voting, par
value $.10-15,000,000 shares authorized,
11,860,651 (9/30/94) and 11,839,501 (3/31/94)
shares issued and outstanding 1,186,000 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 174,019,000 173,372,000
Retained earnings 367,643,000 349,500,000
Cumulative foreign currency translation
adjustment (3,956,000) (9,705,000)
----------- -----------
Total Stockholders' Equity 539,662,000 515,121,000
Total Liabilities & Stockholders' Equity $778,060,000 $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 SIX MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993 1994 1993
---- ---- ---- ----
Revenues:
<S> <C> <C> <C> <C>
Net Sales $165,894,000 $153,535,000 $325,888,000 $304,015,000
Interest, Dividends
and Other Income 5,515,000 7,056,000 12,322,000 13,276,000
----------- ----------- ----------- -----------
171,409,000 160,591,000 338,210,000 317,291,000
Cost and Expenses:
Cost of Goods Sold 53,678,000 52,311,000 104,532,000 102,222,000
Selling, General and
Administrative 101,441,000 94,863,000 201,823,000 181,327,000
----------- ----------- ----------- -----------
155,119,000 147,174,000 306,355,000 283,549,000
Income Before Inc.Taxes 16,290,000 13,417,000 31,855,000 33,742,000
Income Taxes 3,908,000 2,613,000 7,550,000 7,288,000
----------- ----------- ----------- -----------
Net Income $12,382,000 $10,804,000 $24,305,000 $26,454,000
=========== =========== =========== ===========
Average Number of
Shares Outstanding 19,556,851 19,524,066 19,551,609 19,520,397
Net Income per
Share of Common Stock $ .63 $ .55 $ 1.24 $ 1.35
========== ========== ========== ==========
Cash Dividends per
Share of Class A
Common Stock $ .26 $ .25 $ .52 $ .50
========== ========== ========== ==========
</TABLE>
-3-
See notes to consolidated financial statements.
<PAGE>
<TABLE>
BLOCK DRUG COMPANY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
SIX MONTHS ENDED
SEPTEMBER 30,
1994 1993
---- ----
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES $ 21,973,000 $30,102,000
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to Property Plant & Equipment (13,273,000) (19,239,000)
Proceeds from Sales of Long-Term Securities 24,541,000 11,763,000
Purchases of Long-Term Securities ( 4,846,000) (31,969,000)
Decrease in Marketable Securities, Net 4,535,000 6,979,000
---------- -----------
Net Cash Provided by (Used) in Investing Activities 10,957,000 (32,466,000)
---------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends Paid to Shareholders (6,162,000) (5,620,000)
Payments of Notes Payable ( 3,198,000) (143,000)
(Decrease) Increase in Short-Term Debt (16,518,000) 10,614,000
------------ ----------
Net Cash (Used in) Provided by Financing Activities (25,878,000) 4,851,000
------------ ---------
Effect of Exchange Rates on Cash 466,000 (504,000)
-------- ---------
Increase in Cash 7,518,000 1,983,000
Cash Beginning of Period 8,896,000 6,627,000
------------ -----------
Cash, End of Period $ 16,414,000 $ 8,610,000
============ ===========
SUPPLEMENTAL CASH FLOW DATA
Cash Paid During the Year:
Interest $ 4,144,586 $ 2,563,023
Income taxes $ 8,905,029 $ 4,181,292
</TABLE>
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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 six months ended September 30, 1994, the Company reduced
its net borrowings by $19,716,000 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 $166 million in the second quarter and $326 million in the first
half year ended September 30,1994 were 8% and 7%, respectively, above sales for
the comparable prior year. Foreign sales increased 12% for the quarter and 6%
for the six month period. Stated in local currency, foreign sales approximated
dollar sales for the above period.
Domestic sales increased due to selective price increases and unit gains.
Interest, dividends and other income for the first six months was lower
than the comparable prior period, primarily due to a decrease in long term
security holdings.
The cost of goods sold percentage to sales was 32.1% and 33.6% in the first
six months of the current and prior year, respectively. These percentages were
affected by mix of products sold, selective price increases as well as
improved manufacturing operations.
Selling, general and administrative expenses, most of which are related to
advertising and promotional activities, were 61.9% of sales in the first six
months of the current year, compared with 59.6% in the prior period. These
expenses have increased to reflect a major spending program to meet significant
competition and build brand equities.
As a result of the above, pretax income was 9.8% of sales in the first half
of the current period compared to 11.1% in the comparable prior year period.
The effective income tax rates of 23.7% and 21.6% in the first half 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>
Liquidity & Capital Resources
Cash increased for the six months ended September 30, 1994 to $16.4 million
from $8.9 million at year-end March 31, 1994. The net increase resulted
primarily from net sales of securities, a decrease in other current assets and
an increase in accrued expenses. This was partially offset by decreases in
debt, capital expenditures and increases in inventories, accounts receivable and
other assets.
In the prior year six months cash increased to $8.6 million from $6.6
million of year-end March 31, 1993. The net increase resulted primarily from
higher short-term debt, accrued expenses and income taxes payable partially
offset by increases in other accrued assets, capital expenditure and net
purchases of securities.
-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 September 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)
November 10, 1994 MELVIN KOPP
- ---------------- ------------------------------
DATE Melvin Kopp
Senior Vice President &
Chief Financial Officer
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