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, 1997
_________________________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,_1997
Common Stock - Class A 13,553,972
Common Stock - Class B 7,935,532
<PAGE>1
BLOCK DRUG COMPANY, INC.
INDEX TO FORM 10-Q
JUNE 30, 1997
____________________________
Part I - Financial Information - Unaudited Page No.
Consolidated Balance Sheets - June 30, 1997
and March 31, 1997 2
Consolidated Statements of Income for the three
months ended June 30, 1997 and 1996 3
Condensed Consolidated Statements of Cash Flows
for the three months ended June 30, 1997 and 4
and 1996
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 __06/30/97__ __03/31/97__
<S> <C> <C>
Current Assets:
Cash $ 5,893,000 $ 13,862,000
Marketable securities,at market 46,388,000 24,923,000
Accounts receivable, less allowances
of $4,521,000 (6/30/97) and
$4,504,000 (3/31/97) 157,033,000 164,104,000
Inventories:
Raw & packaging materials 46,611,000 44,334,000
Finished goods 100,545,000 94,345,000
Other current assets 66,859,000 51,508,000
------------ -----------
Total current assets 423,329,000 393,076,000
------------ -----------
Property, plant and equipment, less
depreciation of $124,764,000
(6/30/97) and $122,095,000 (3/31/97) 234,392,000 235,486,000
Long term securities,at market 220,677,000 225,999,000
Goodwill and other intangible assets-
net of amortization 149,959,000 153,425,000
Other assets 5,281,000 6,937,000
------------- -------------
Total Assets $1,033,638,000 $1,014,923,000
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes and bonds payable $130,430,000 $118,522,000
Accounts payable & accrued expenses 173,876,000 167,744,000
Income taxes payable 11,410,000 11,612,000
Dividends payable 5,030,000 5,026,000
----------- -----------
Total current liabilities 320,746,000 302,904,000
----------- -----------
Notes and bonds payable 55,883,000 55,943,000
Deferred compensation and other liabilities 16,968,000 16,012,000
Deferred income Taxes 10,356,000 8,744,000
----------- -----------
Total Liabilities 403,953,000 383,603,000
----------- -----------
Shareholders' Equity:
Class A common stock, non-voting, par
value $.10-15,000,000 shares authorized,
13,553,972 (6/30/97) and 13,544,460
(3/31/97) shares issued and outstanding 1,355,000 1,354,000
Class B common stock par value $.10-
30,000,000 shares authorized,7,935,532
shares issued and outstanding 794,000 794,000
Capital in excess of par value 249,859,000 249,375,000
Retained earnings 387,529,000 377,202,000
Cumulative foreign currency translation
adjustment (11,151,000) 2,044,000
Unrealized holding gain on marketable
securities 1,299,000 551,000
----------- -----------
Total Shareholders' Equity 629,685,000 631,320,000
-------------- --------------
Total Liabilities & Shareholders' Equity $1,033,638,000 $1,014,923,000
============== ==============
</TABLE>
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,
__1997_____________1996______
Revenues:
<S> <C> <C>
Net sales $200,206,000 $205,507,000
Interest, dividends and
other income 6,327,000 5,567,000
----------- -----------
206,533,000 211,074,000
----------- -----------
Cost and Expenses:
Cost of goods Sold 59,449,000 64,508,000
Selling, general and
administrative 126,298,000 124,576,000
----------- -----------
185,747,000 189,084,000
----------- -----------
Income before taxes 20,786,000 21,990,000
Income taxes 5,405,000 6,575,000
----------- -----------
Net Income $15,381,000 $15,415,000
=========== ===========
Average number of shares outstanding 21,483,816 21,444,291 (1)
=========== ============
Net earnings per share $ .72 $ .72 (1)
=========== ===========
Cash dividends per share of class A
common stock $ .31 $ .29
Cash dividends per share of class B
common stock $ .1075 $ .10
(1) Restated to reflect 3% stock dividend.
</TABLE>
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
_____1997_____ _____1996_____
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES $6,498,000 ($8,996,000)
-------------- -------------
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant & equipment (7,704,000) ( 8,183,000)
Proceeds from sale of building 5,200,000
Proceeds from sales of long-term securities 8,986,000 4,157,000
Purchases of long-term securities (4,898,000) (10,293,000)
(Increase)decrease in marketable securities (18,391,000) 5,308,000
Payments for products acquired (4,149,000)
------------- -------------
Net Cash Used in investing activities (22,007,000) (7,960,000)
------------- -------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders (5,054,000) ( 4,575,000)
Payments of notes payable (2,628,000)
Increase in short-term debt 11,848,000 21,745,000
------------- ------------
Net cash provided by financing
activities 6,794,000 14,542,000
------------- ------------
Effect of exchange rates on cash 746,000 48,000
------------- ------------
Decrease in cash (7,969,000) (2,366,000)
Cash, beginning of period 13,862,000 16,388,000
------------ ------------
Cash, end of period $5,893,000 $ 14,022,000
============ ============
SUPPLEMENTAL CASH FLOW DATA
Cash paid during the year:
Interest $ 2,182,400 $ 1,544,700
Income taxes $ 4,001,000 $ 4,836,100
</TABLE>
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, 1997, the Company
increased its net borrowings by $ 11,848,000 mainly from
lines of credit from various banks bearing interest at
variable rates.
<PAGE>6
BLOCK DRUG COMPANY, INC. & SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF OPERATING RESULTS AND FINANCIAL CONDITION
Operating Results
Consolidated worldwide net sales of $200.2 million in the first quarter
ended June 30, 1997 were lower compared to first quarter sales of the prior
year by 2.6%. Foreign sales decreased by 2.7% for the quarter. Excluding the
impact of exchange rates foreign sales for the quarter increased 3.1 %.
Domestic sales were lower by 2.4% due to continued competitive pressures in many
of our categories particularly Household Products.
Interest, dividends and other income slightly increased in the quarter
compared to the prior year comparable period due primarily to capital gain on
sales of securities. Interest income was slightly higher due to change in the
investment portfolio.
The cost of goods sold percent to sales was 29.7% and 31.4% in the first
quarter of the current and prior year,respectively. The cost of goods was lower
primarily due to improved manufacturing operations and mix of products sold.
Selling, general and administrative expenses, most of which are related to
advertising and promotional activities, were 63.1% and 60.6% of sales in the
first quarter of the current year and prior year, respectively.
Due to the above factors, income from operations before taxes was 10.4% of
sales in the first quarter of the current year and 10.7% in the same period last
year.
The effective income tax rates of 26.0% and 29.9% 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.
Financial Condition
Cash decreased in the current quarter ended June 30, 1997 from the year-
ended March 31, 1997 by $8 million. The decrease resulted primarily from the
increase in marketable securities,inventories and other current assets partially
offset by increases in accounts payable, short-term debt and a decrease in
accounts receivable. The company incurred $2.8 million of restructuring related
cash outflows for the quarter.
In the prior year first quarter ended June 30, 1996 cash decreased 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.
<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,
1997.
_____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, 1997 MELVIN KOPP
________________ ______________________________
DATE Melvin Kopp
Senior Vice President &
Chief Financial Officer
<PAGE>8
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<ALLOWANCES> 4521
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0
0
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<TOTAL-LIABILITY-AND-EQUITY> 1033638
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<TOTAL-COSTS> 59449
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<NET-INCOME> 15381
<EPS-PRIMARY> .72
<EPS-DILUTED> .72
</TABLE>
