SECURITIES AND EXCHANGE COMMISSION
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, 1996
_________________________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,_1996
Common Stock - Class A 13,121,722
Common Stock - Class B 7,704,400
<PAGE> 1
BLOCK DRUG COMPANY, INC.
INDEX TO FORM 10-Q
JUNE 30, 1996
____________________________
Part I - Financial Information - Unaudited Page No.
Consolidated Balance Sheets - June 30, 1996
and March 31, 1996 2
Consolidated Statements of Income for the three
months ended June 30, 1996 and 1995 3
Condensed Consolidated Statements of Cash Flows
for the three months ended June 30, 1996 and 4
and 1995
Notes to Consolidated Financial Statements 5
Management's Discussion and Analysis of Operating
Results and Financial Condition 6
Part II - Other Information 7
<PAGE> 2
<TABLE>
BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<CAPTION> (Unaudited)
ASSETS __06/30/96__ __03/31/96__
<S> <C> <C>
Current Assets:
Cash $ 14,022,000 $ 16,388,000
Marketable securities,at market 5,198,000 13,433,000
Accounts receivable, less allowances
of $4,226,000 (6/30/96) and
$4,188,000 (3/31/96) 192,726,000 124,816,000
Inventories:
Raw & packaging materials 43,518,000 42,868,000
Finished goods 89,566,000 81,500,000
Other current assets ___60,134,000 __33,200,000
Total current Assets 405,164,000 312,205,000
Property, plant and equipment, less
depreciation of $111,791,000
(6/30/96) and $114,724,000 (3/31/96) 239,736,000 242,552,000
Long term securities,at market 229,085,000 222,667,000
Goodwill and other intangible assets-
net of amortization 129,560,000 127,047,000
Other assets __ 8,185,000 __24,646,000
Total Assets $1,011,730,000 $929,117,000
============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes and bonds payable $ 91,679,000 $ 75,559,000
Accounts payable & accrued expenses 176,309,000 118,273,000
Income taxes payable 9,881,000 7,751,000
Dividends payable ____4,575,000 __4,572,000
Total Current Liabilities 282,444,000 206,155,000
Notes and bonds payable 59,140,000 56,143,000
Deferred compensation and other liabilities 14,207,000 15,364,000
Deferred income Taxes ___10,949,000 _10,413,000
Total Liabilities __366,740,000 288,075,000
Shareholders' Equity:
Class A common stock, non-voting, par
value $.10-15,000,000 shares authorized,
13,121,722 (6/30/96) and 13,111,962
(3/31/96) shares issued and outstanding 1,312,000 1,311,000
Class B common stock par value $.10-
30,000,000 shares authorized, 7,704,400
shares issued and outstanding 770,000 770,000
Capital in excess of par value 217,638,000 219,207,000
Retained earnings 427,040,000 416,200,000
Cumulative foreign currency translation
adjustment (5,731,000) (2,476,000)
Unrealized holding gain on marketable
securities ____3,961,000 __6,030,000
Total Shareholders' Equity __644,990,000 _641,042,000
Total Liabilities & Shareholders' Equity $1,011,730,000 $929,117,000
============= ============
</TABLE>
-2-
See notes to consolidated financial statements.
<PAGE> 3
<TABLE>
BLOCK DRUG COMPANY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<CAPTION> THREE_MONTHS_ENDED
JUNE 30,
__1996_____________1995______
Revenues:
<S> <C> <C>
Net sales $205,507,000 $178,810,000
Interest, dividends and
other income ___5,567,000 ___8,392,000
_211,074,000 _187,202,000
Cost and Expenses:
Cost of goods Sold 64,508,000 55,680,000
Selling, general and
administrative _124,576,000 _113,596,000
_189,084,000 _169,276,000
Income from continuing operations
before taxes 21,990,000 17,926,000
Income taxes __6,575,000 ___3,678,000
Income from continuing operations 15,415,000 _14,248,000
Discontinued operations
Income from discontinued operations,
net of taxes of $32,000 (1995) and
$861,000 (1994) 52,000
Gain on sale of division, net of
taxes of $26,000,000 _ _43,036,000
Income from discontinued operations _ _43,088,000
Net income $15,415,000 $57,336,000
=========== ===========
Average number of shares outstanding 20,819,700 20,779,274 (1)
=========== ============
Earnings per share:
From continuing operations $ .74 $ .69 (1)
From discontinued operations __ $__ 2.07 (1)
Net earnings $ .74 $ 2.76
=========== ===========
Cash dividends per share of class A
common stock $ .29 $ .27
Cash dividends per share of class B
common stock $ .10
</TABLE>
(1) Restated to reflect 3% stock dividend.
-3-
See notes to consolidated financial statements.
<PAGE> 4
<TABLE>
BLOCK DRUG COMPANY INC. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION> THREE MONTHS ENDED
JUNE 30
_____1996_________1995____
<S> <C> <C>
CASH_FLOW_FROM_OPERATING_ACTIVITIES ($8,996,000) ($1,675,000)
CASH FLOW FROM INVESTING ACTIVITIES
Proceeds from sale of business segment 106,000,000
Additions to property, plant & equipment ( 8,183,000) (7,080,000)
Proceeds from sale of building 5,200,000
Proceeds from sales of long-term securities 4,157,000 15,088,000
Purchases of long-term securities (10,293,000) (10,334,000)
Decrease in marketable securities 5,308,000 132,000
Payments for products acquired __(4,149,000) ___
Net Cash (Used in)provided by Investing
Activities _ (7,960,000) __103,806,000
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders ( 4,575,000) ( 3,368,000)
Payments of notes payable (2,628,000) (956,000)
Increase(decrease)in short-term debt,net __21,745,000 _(102,216,000)
Net cash provided by (used in) financing
activities 14,542,000 (106,540,000)
Effect of exchange rates on cash __48,000 ____231,000
Decrease in cash (2,366,000) (4,178,000)
Cash, beginning of period __16,388,000 _13,706,000
Cash, end of period $ 14,022,000 $ 9,528,000
============ ===========
SUPPLEMENTAL CASH FLOW DATA
Cash paid during the year:
Interest $ 1,544,706 $ 3,707,158
Income taxes $ 4,836,098 $ 2,166,800
</TABLE>
-4-
See notes to consolidated financial statements.
<PAGE> 5
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. In April 1996 the Company terminated its joint venture
agreement in Japan and acquired sole ownership of the joint
venture company.
3. During the three months ended June 30, 1996, the Company
increased its net borrowings by $ 19,117,000 mainly from
lines of credit from various banks bearing interest at
variable rates.
-5-
<PAGE> 6
BLOCK DRUG COMPANY, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL CONDITION
Operating Results
Consolidated world wide net sales of $205.5 million in
the first quarter ended June 30, 1996 exceeded first quarter
sales of the prior year by 15%. Foreign sales increased 26%
for the quarter. Stated in local currency foreign sales for the
quarter increased 32%. Domestic sales were higher due to
selective price increases and unit gains primarily in the
Household Products segment.
Interest, dividends and other income decreased in the
quarter from the comparable year-ago period due primarily to
the termination of the joint venture in Japan which is now a
wholly-owned subsidiary. Interest income also decreased due to
sales of marketable securities to finance product line
acquisitions.
The cost of goods sold percent to sales was 31.4% and
31.1% in the first quarter of the current and prior year
respectively. These percentages were affected by improved
manufacturing operations and mix of products sold, in
addition to selective price increases.
Selling, general and administrative expenses, most of
which are related to advertising and promotional
activities,were 60.6% and 63.5% of sales in the first quarter
of the current year and the prior year, respectively.
Due to the above factors, income from continuing operations
before taxes was 10.7 % of sales in the first quarter of the current
year and 10.0% in the same period last year.
The effective income tax rates of 29.9% and 20.5% 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.
The increase in the current quarter is due primarily to the Company's
joint venture in Japan,which is now operating as a wholly-owned subsidiary.
Financial Condition
Cash decreased in the current quarter ended June 30,1996
from year-end March 31, 1996 by $2.4 million. The decrease
resulted primarily from increases in accounts receivable,
inventories and other current assets partially offset by
increases in accounts payable and short- term debt and a decrease
in other assets.
In the prior year first quarter ended June 30, 1995
cash decreased by $4.2 million. The decrease resulted
primarily from the reduction in debt and increased capital
expenditures partially offset by the proceeds from the sale of a
business segment and increases in taxes payable and accrued
expenses.
- 6 -
<PAGE> 7
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,
1996.
_____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 11, 1996 MELVIN KOPP
________________ ______________________________
DATE Melvin Kopp
Senior Vice President &
Chief Financial Officer
-7-
<PAGE> 8
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<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> JUN-30-1996
<CASH> 14022
<SECURITIES> 5198
<RECEIVABLES> 196952
<ALLOWANCES> 4226
<INVENTORY> 133084
<CURRENT-ASSETS> 405164
<PP&E> 351527
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<TOTAL-ASSETS> 1011730
<CURRENT-LIABILITIES> 282444
<BONDS> 0
<COMMON> 2082
0
0
<OTHER-SE> 642908
<TOTAL-LIABILITY-AND-EQUITY> 1011730
<SALES> 205507
<TOTAL-REVENUES> 211074
<CGS> 64508
<TOTAL-COSTS> 64508
<OTHER-EXPENSES> 123031
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1545
<INCOME-PRETAX> 21990
<INCOME-TAX> 6575
<INCOME-CONTINUING> 15415
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15415
<EPS-PRIMARY> .74
<EPS-DILUTED> .74
</TABLE>
