1 of 12
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------------------
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file Number 1-10585
CHURCH & DWIGHT CO., INC.
(Exact name of registrant as specified in its charter)
Delaware 13-4996950
(State of incorporation) (I.R.S. Employer Identification No.)
469 North Harrison Street, Princeton, N.J. 08543-5297
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (609) 683-5900
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 twelve 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 ----------
As of August 7, 2000, there were 38,264,819 shares of Common
Stock outstanding.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART I - FINANCIAL INFORMATION
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
-------------------------- ---------------------------
<S> <C> <C> <C> <C>
June 30, July 2, June 30, July 2,
(In thousands, except per share data) 2000 1999 2000 1999
-----------------------------------------------------------------------------------------------------------------------
Net Sales $199,863 $186,365 $391,495 $361,073
Cost of sales 110,021 102,453 217,176 200,043
--------------------------- --------------------------
Gross profit 89,842 83,912 174,319 161,030
Advertising, consumer and trade promotion expenses 46,822 47,296 91,286 91,868
Selling, general and administrative expenses 23,679 21,205 45,028 42,229
Gain on sale of mineral rights - - - (11,772)
Impairment and other items - 435 - 5,755
--------------------------- --------------------------
Income from Operations 19,341 14,976 38,005 32,950
Equity in earnings of affiliates 324 1,929 1,178 3,949
Investment income 866 343 1,185 715
Other income (expense) (137) 65 113 167
Interest expense (1,477) (689) (2,854) (1,294)
--------------------------- --------------------------
Income before taxes 18,917 16,624 37,627 36,487
Income taxes 6,435 5,959 13,358 13,457
Minority Interest; net of taxes 107 209 162 209
--------------------------- --------------------------
Net Income 12,375 10,456 24,107 22,821
Retained earnings at beginning of period 262,899 228,662 253,885 218,618
--------------------------- --------------------------
275,274 239,118 277,992 241,439
Dividends paid 2,674 2,328 5,392 4,649
--------------------------- --------------------------
Retained earnings at end of period $272,600 $236,790 $272,600 $236,790
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Weighted average shares outstanding - Basic 38,152 38,794 38,416 38,750
Weighted average shares outstanding - Diluted 39,650 40,848 40,052 40,784
-----------------------------------------------------------------------------------------------------------------------
Earnings Per Share:
Net income per share - Basic $.32 $.27 $.63 $.59
Net income per share - Diluted $.31 $.26 $.60 $.56
-----------------------------------------------------------------------------------------------------------------------
Dividends Per Share: $.07 $.06 $.14 $.12
-----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<S> <C> <C>
(Dollars in thousands) June 30, 2000 Dec. 31, 1999
-------------------------------------------------------------------------------- ----------------- ---------------
Assets
-------------------------------------------------------------------------------- ----------------- ---------------
Current Assets
Cash and cash equivalents $28,575 $19,765
Short-term investments 3,996 4,000
Accounts receivable, less allowances of $1,523 and $1,552 67,248 64,505
Inventories (Note 2) 69,066 72,670
Deferred income taxes 8,564 8,221
Prepaid expenses 6,991 6,622
----------------- ---------------
Total Current Assets 184,440 175,783
-------------------------------------------------------------------------------- ----------------- ---------------
Property, Plant and Equipment (Net) (Note 3) 182,579 182,219
Note Receivable - 3,000
Equity Investment in Affiliates 22,210 20,177
Long-Term Supply Contracts 4,031 4,105
Goodwill and Other Intangibles 84,935 83,744
Other Assets 12,741 7,278
-------------------------------------------------------------------------------- ----------------- ---------------
Total Assets $490,936 $476,306
-------------------------------------------------------------------------------- ----------------- ---------------
Liabilities and Stockholders' Equity
-------------------------------------------------------------------------------- ----------------- ---------------
Current Liabilities
Short-term borrowings $32,330 $ 25,574
Accounts payable and accrued expenses 123,270 106,109
Current portion of long-term debt 685 685
Income taxes payable 2,303 8,240
----------------- ---------------
Total Current Liabilities 158,588 140,608
-------------------------------------------------------------------------------- ----------------- ---------------
Long-Term Debt 50,549 58,107
Deferred Income Taxes 20,696 20,416
Deferred Liabilities 11,417 11,860
Nonpension Postretirement and Postemployment Benefits 15,563 15,145
Minority Interest 3,601 3,437
Commitments and Contingencies
Stockholders' Equity
Preferred Stock - $1.00 par value
Authorized 2,500,000 shares, none issued - -
Common Stock - $1.00 par value
Authorized 100,000,000 shares, issued 46,660,988 shares 46,661 46,661
Additional paid-in capital 19,944 18,356
Retained earnings 272,600 253,885
Accumulated other comprehensive (loss) (7,561) (4,599)
----------------- ---------------
331,644 314,303
Less common stock in treasury, at cost -
8,435,269 shares in 2000 and 7,805,152 shares in 1999 (100,573) (87,021)
Due from officer (549) (549)
-------------------------------------------------------------------------------- ----------------- ---------------
Total Stockholders' Equity 230,522 226,733
-------------------------------------------------------------------------------- ----------------- ---------------
Total Liabilities and Stockholders' Equity $490,936 $476,306
-------------------------------------------------------------------------------- ----------------- ---------------
</TABLE>
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION> Six Months Ended
-------------------------------------
<S> <C> <C>
(Dollars in thousands) June 30, 2000 July 2, 1999
------------------------------------------------------------------------------ ------------------ ------------------
Cash Flow From Operating Activities
------------------------------------------------------------------------------ ------------------ ------------------
Net Income $24,107 $22,821
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation, depletion and amortization 11,489 9,530
Equity in income from affiliates (1,178) (3,949)
Deferred income taxes 1,373 (553)
Gain on sale of mineral rights - (11,772)
Disposal of fixed assets - 4,600
Other (154) 159
Change in assets and liabilities:
(Increase) in accounts receivable (2,922) (284)
Decrease/(increase) in inventories 3,492 (8,277)
(Increase) in prepaid expenses (784) (1,080)
Increase/(decrease) in accounts payable 14,504 (720)
(Decrease)/increase in income taxes payable (4,915) 3,441
Increase in other liabilities 142 3,770
------------------------------------------------------------------------------ ------------------ ------------------
Net Cash Provided By Operating Activities 45,154 17,686
Cash Flow From Investing Activities
Decrease/(increase) in short-term investments 4 (2,958)
Additions to property, plant and equipment (10,506) (13,514)
Purchase of USA Detergent common stock (10,080) -
Proceeds from sale of mineral rights - 16,762
Investment in affiliates (2,860) (9,184)
Distributions from unconsolidated affiliates 1,953 2,302
Purchase of other assets (1,148) (3,002)
Proceeds from repayment of notes receivable 3,000 2,196
Goodwill and other intangibles adjustment 1,507 -
Proceeds from sale of fixed assets 864 -
------------------------------------------------------------------------------ ------------------ ------------------
Net Cash (Used In) Investing Activities (17,266) (7,398)
Cash Flow From Financing Activities
------------------------------------------------------------------------------ ------------------ ------------------
Short-term debt borrowing (repayments) 6,753 (1,326)
Long-term debt (repayments) (7,563) (2,622)
Payment of cash dividends (5,392) (4,649)
Proceeds from stock options exercised 2,999 4,487
Purchase of treasury stock (15,875) (4,422)
------------------------------------------------------------------------------ ------------------ ------------------
Net Cash (Used In) Financing Activities (19,078) (8,532)
Net Change In Cash and Cash Equivalents 8,810 1,756
Cash And Cash Equivalents At Beginning Of Year 19,765 16,189
------------------------------------------------------------------------------ ------------------ ------------------
Cash And Cash Equivalents At End Of Period $28,575 $17,945
------------------------------------------------------------------------------ ------------------ ------------------
</TABLE>
<PAGE>
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated balance sheet as of June 30, 2000, the consolidated
statements of income and retained earnings for the three and six months ended
June 30, 2000 and July 2, 1999, and the consolidated statements of cash flow for
the six months ended June 30, 2000 and July 2, 1999 have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flow at June 30, 2000 and for
all periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 1999 annual
report to shareholders. The results of operations for the period ended June 30,
2000 are not necessarily indicative of the operating results for the full year.
<TABLE>
<CAPTION>
2. Inventories consist of the following:
<S> <C> <C>
June 30, Dec. 31,
(in thousands) 2000 1999
------------------------------------------------------------------------------------- --------------- ---------------
Raw materials and supplies $25,130 $25,698
Work in process 16 22
Finished goods 43,920 46,950
--------------- ---------------
$69,066 $72,670
------------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
<TABLE>
<CAPTION>
3. Property, Plant and Equipment consist of the following:
<S> <C> <C>
June 30, Dec. 31,
(in thousands) 2000 1999
------------------------------------------------------------------------------------- --------------- ---------------
Land $ 5,606 $ 5,741
Buildings and improvements 84,070 85,411
Machinery and equipment 221,235 221,783
Office equipment and other assets 15,324 15,434
Software 5,857 5,857
Mineral rights 329 328
Construction in progress 15,141 4,960
--------------- ---------------
347,562 339,514
Less accumulated depreciation and amortization 164,983 157,295
--------------- ---------------
Net Property, Plant and Equipment $182,579 $182,219
------------------------------------------------------------------------------------- --------------- ---------------
</TABLE>
4. Earnings Per Share
Basic EPS is calculated based on income available to common shareholders and the
weighted-average number of shares outstanding during the reported period.
Diluted EPS includes additional dilution from potential common stock issuable
pursuant to the exercise of stock options outstanding.
<PAGE>
5. Recent Accounting Developments
The Company recognizes revenue when product is shipped to trade customers. The
Company is reviewing SEC Staff Accounting Bulletin No.101, Revenue Recognition
in Financial Statements, issued in December 1999, to determine if it is in
compliance and has not yet determined the future impact on the Company's
consolidated financial statements.
<PAGE>
In June 1998, The Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133 ("SFAS 133") "Accounting for Derivative
Instruments and Hedging Activities." This Statement requires that all
derivatives be recorded in the balance sheet as either an asset or liability
measured at fair value. The Statement requires that changes in a derivative's
fair value be recognized currently in earnings unless specific hedge accounting
criteria are met. In June 1999, the FASB issued SFAS No. 137, which deferred the
effective date of adoption of SFAS No. 133 for one year. The Company will adopt
SFAS No. 133 in the 2001 financial statements. The Company is in the process of
evaluating this Statement and has not yet determined the future impact on the
Company's consolidated financial statements.
6. Impairment and Other Items
During 1999, the Company recorded a pre-tax charge of $6.6 million for
impairment and certain other items relating to a planned plant shutdown which
included the rationalization of both toothpaste and powder laundry detergent
production. Components of the outstanding reserve balance included in accounts
payable and accrued expenses consist of the following:
Reserves at (Payments)/ Reserves at
(In thousands) Dec. 31, 1999 Adjustments June 30, 2000
--------------------------------------------------------------------------------
Severance and other charges $268 $77 $345
--------------------------------------------------------------------------------
7. Segment Information
Segment sales and operating profit for the second quarter and year to date 2000
and 1999 are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C>
Unconsolidated
(In thousands) Consumer Specialty Affiliates Corporate Total
----------------------------------------------------------------------------------------------------------------------
Net Sales
Second quarter 2000 $161,290 $44,869 $(6,296) - $199,863
Second quarter 1999 148,755 43,857 (6,247) - 186,365
Year to date 2000 316,742 87,059 (12,306) - 391,495
Year to date 1999 291,863 81,767 (12,557) - 361,073
Operating Profit
Second quarter 2000 13,393 6,248 (300) - 19,341
Second quarter 1999 9,341 8,021 (1,951) (435) 14,976
Year to date 2000 26,131 13,003 (1,129) - 38,005
Year to date 1999 16,862 13,988 (3,917) 6,017 32,950
</TABLE>
<TABLE>
<CAPTION>
Product line net sales data for the second quarter and year to date periods are as follows:
===========================================================================================================================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Laundry and Oral and Uncon-
Household Personal Deodor- Specialty Animal Specialty solidated
Cleaners Care izing Chemicals Nutrition Cleaners Affiliates Total
------------------------------------------------------------------------------------------------------------------------------
2nd Qtr 2000 $79,749 $39,535 $42,006 $26,703 $16,143 $2,023 $(6,296) $199,863
2nd Qtr 1999 68,588 40,950 39,217 26,460 15,165 2,232 (6,247) 186,365
YTD 2000 157,001 81,105 78,636 51,782 31,113 4,164 (12,306) 391,495
YTD 1999 137,618 81,801 72,444 47,128 30,169 4,470 (12,557) 361,073
------------------------------------------------------------------------------------------------------------------------------
</TABLE>
8. Comprehensive Income
The following table presents the Company's Comprehensive Income for the three
and six months ending June 30, 2000 and July 2, 1999.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ -----------------------------
<S> <C> <C> <C> <C>
June 30, July 2, June 30, July 2,
(in thousands) 2000 1999 2000 1999
---------------------------------------------------- ------------ ---- ------------ --- ------------ --- ------------
Net Income $12,375 $10,456 $24,107 $22,821
Other Comprehensive Income, net of tax:
Foreign exchange translation adjustments (901) (3,683) (611) (3,796)
Available for Sale securities (2,351) - (2,351) -
------------ ---- ------------ ------------ --- ------------
Comprehensive Income $9,123 $6,773 $21,145 $19,025
---------------------------------------------------- ------------ ---- ------------ --- ------------ --- ------------
</TABLE>
9. ARMUS LLC Joint Venture
On June 14, 2000, the Company announced it was forming a joint venture with USA
Detergents which will combine both Companies laundry detergent businesses. The
new venture, named Armus LLC, encompasses Church & Dwight's ARM & HAMMER Powder
and Liquid Laundry Detergents and USA Detergent's XTRA(R) Powder and Liquid
Detergents and Nice'n FLUFFY(R) Liquid Fabric Softener brands.
Under the terms of the agreement:
a) Church & Dwight purchased 1.4 million shares of USA Detergents common stock
for $10.1 million or $7 per share and agreed to acquire a further 5%
interest for $5 million on or around January 1, 2001.
b) The two partners will combine the marketing, sales and distribution of
their laundry detergents. Both companies will continue to operate their own
plants and the employees of each company will remain with their current
employer.
c) Church & Dwight will have a majority on the venture's Board and the General
Manager will be a Church & Dwight employee.
d) Church & Dwight's share of the profits will range from 55% to 65% depending
on the venture's profit level.
e) Church & Dwight has an option to purchase USA Detergent's partnership
interest after 5 years and USA Detergents has an option to sell its
interest to C&D after 10 years. In each case, the purchase price will be
computed using a formula based on the venture's earnings for the two
previous years of operations.
The value of USA Detergent's stock on the date of closing was $6.8 million or
$4.75 per share. The stock has been classified as Available for Sale and is
marked to market on each reporting date through other comprehensive income, net
of applicable deferred income taxes.
The Company agreed to purchase additional shares on or about January 1, 2001,
i.e. a forward contract, which is marked to market through other comprehensive
income.
As a result of the above joint venture agreement, goodwill of $4.8 million has
been recorded and will be amortized over a period of 10 years.
10. Contingencies
The Company, in the ordinary course of its business, is the subject of, or a
party to, various pending or threatened legal actions. The Company believes that
any ultimate liability arising from these actions will not have a material
adverse effect on its consolidated financial statements.
11. Reclassification
Certain prior year amounts have been reclassified in order to conform with the
current year presentation.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
Results of Operations
---------------------
For the quarter ended June 30, 2000, net income was $12.4 million, equivalent to
basic earnings of $.32 per share, from $10.5 million or $.27 per share, in last
year's second quarter. Diluted earnings were $.31 per share compared to $.26 per
share last year. For the first six months of 2000, net income was $24.1 million
or basic earnings of $.63 per share compared to $22.8 million or $.59 per share
last year. Diluted earnings were $.60 per share compared to $.56 per share last
year. The prior year results include a net pre-tax gain of $6.0 million or $.09
per share from the sale of mineral reserves partially offset by plant impairment
charges. Excluding these one-time items, diluted earnings would have been $.47
per share last year.
Net sales for the quarter increased by 7.2% to $199.9 million from $186.4
million in the same period last year. Consumer product sales increased 8.4%, led
by strong growth in deodorizing products as well as the addition of the recently
acquired Bathroom Cleaner brands. Within the Oral and Personal Care product
line, higher ARM & HAMMER DENTAL CARE toothpaste sales were partially offset by
weaker Gum and Deodorant performance. Higher Liquid Laundry Detergent sales were
partially offset by lower Powder Laundry Detergent sales in the Laundry and
Household Cleaning product line. Specialty products sales increased 2.6% led by
growth in animal nutrition.
Net sales for the first six months of 2000 increased 8.4% to $391.5 million,
with consumer products up 8.5% and specialty products up 8.0%. This year's
number includes two acquisitions completed in 1999: the Brazilian specialty
chemical company QGN, in which the Company acquired a controlling interest in
May and the two bathroom cleaners, SCRUB FREE(R) and CLEAN SHOWER(R) acquired in
December. Excluding the product lines acquired last year, sales of established
consumer products increased 2% and specialty products declined 2%. Deodorizing
products increased primarily due to strong Cat Litter sales, while Laundry &
Household Cleaning and Oral & Personal Care products were virtually unchanged.
The Company's gross margin of 45.0% and 44.5% for the quarter and six-month
period, respectively, was virtually unchanged versus the same periods of 1999.
The current year's periods benefited from the elimination of co-packers to meet
higher than expected order requirements in 1999 and manufacturing and
distribution efficiencies in 2000, stemming partially from the Greenville plant
shutdown in 1999. These favorable margin improvements were offset by higher raw
and packaging materials for consumer products and plant startup costs.
Advertising, consumer and trade promotion expenses were slightly lower for the
quarter and six month periods. Lower expenses for ARM & HAMMER DENTAL CARE Gum,
Carpet Deodorizer and Deodorant were partially offset by costs for ARM & HAMMER
premium clay Cat Litter, which was introduced in late 1999, bathroom cleaning
products acquired late in 1999 and an increase in expenses for ARM & HAMMER
DENTAL CARE toothpaste.
Selling, general and administrative expenses increased $2.5 million in the
current quarter and $2.8 million for the six month period. The increase was due
to higher selling, personnel-related costs, information technology costs and
amortization of intangibles relating to the bathroom cleaners acquisition. The
increase for the six month period was also due to the above items; however,
these increases were partially offset by lower deferred compensation liability.
During the current quarter the ArmaKleen Company, a 50/50 joint venture between
Church & Dwight and the Safety- Kleen Company recorded a bad debt provision
relating to Safety-Kleen filing chapter 11. This caused the ArmaKleen Company to
record a $1.4 million charge in the quarter, resulting in a $.7 million charge
to Church & Dwight. The Company believes that the debtor in possession financing
in place for Safety-Kleen, along with the relief of its pre-petition debt load,
will enable it to emerge from chapter 11 as a going concern, thereby enabling
the viability of the ArmaKleen Company. Should the Company be wrong in its base
assumption about the viability of the ArmaKleen Company because the business
with Safety-Kleen no longer exists, the results of operations and balance
position of the Company would be adversely affected.
ArmaKleen's results and lower earnings from Armand Products caused earnings from
affiliates to be lower from last year for both the quarter and six month
periods.
Investment income increased in both the three and six month periods due to the
receipt of interest from the Fluid Packaging note.
Interest Expense was higher in both the three and six month periods due to an
increased amount of debt.
The effective tax rate for the first half was 35.5%, down from 36.9% from last
year. The decrease in the rate is a result of a lower effective state tax rate
and lower taxes related to foreign activity.
Minority interest represents 25% of the net income associated with the Company's
Brazilian subsidiary.
Liquidity and Capital Resources
-------------------------------
The Company considers cash and short-term investments as the principal
measurement of its liquidity. At June 30, 2000, cash, including cash equivalents
and short-term investments totaled $32.6 million as compared to $23.8 million at
December 31,1999.
During the first half of 2000, the Company generated $45.2 million of cash flow
from operating activities, received $3.0 million from Fluid Packaging , and $3.0
million from stock options exercised. Significant expenditures include the
purchase of treasury stock of $15.9 million, additions to property, plant and
equipment of $10.5 million, the purchase of 1.4 million shares of USA Detergent
for $10.1 million and cash dividends of $5.4 million.
ARMUS LLC Joint Venture
-----------------------
On June 14, 2000, the Company announced it was forming a joint venture with USA
Detergents which will combine both Companies laundry detergent businesses. The
new venture, named Armus LLC, encompasses Church & Dwight's ARM & HAMMER Powder
and Liquid Laundry Detergents and USA Detergent's XTRA Powder and Liquid
Detergents and Nice'n FLUFFY Liquid Fabric Softener brands.
Under the terms of the agreement:
1) Church & Dwight purchased 1.4 million shares of USA Detergents common stock
for $10.1 million or $7 per share and agreed to acquire a further 5%
interest for $5 million on or around January 1, 2001.
2) The two partners will combine the marketing, sales and distribution of
their laundry detergents. Both companies will continue to operate their own
plants and the employees of each company will remain with their current
employer.
3) Church & Dwight will have a majority on the venture's Board and the General
Manager will be a Church & Dwight employee.
4) Church & Dwight's share of the profits will range from 55% to 65% depending
on the venture's profit level.
5) Church & Dwight has an option to purchase USA Detergent's partnership
interest after 5 years and USA Detergents has an option to sell its
interest to C&D after 10 years. In each case, the purchase price will be
computed using a formula based on the venture's earnings for the two
previous years of operations.
The value of USA Detergent's stock on the date of closing was $6.8 million or
$4.75 per share. The stock has been classified as Available for Sale and is
marked to market on each reporting date through other comprehensive income, net
of applicable deferred income taxes.
The Company agreed to purchase additional shares on or about January 1, 2001,
i.e. a forward contract, which is marked to market through other comprehensive
income.
As a result of the above joint venture agreement, goodwill of $4.8 million has
been recorded and will be amortized over a period of 10 years.
Fluid Note Receivable
---------------------
In conjunction with the July 1998 purchase of the Lakewood, New Jersey,
manufacturing facility, the Company loaned Fluid Packaging Co., Inc. $3.0
million at an interest rate of 8% per annum. The note was payable no later than
July 15, 1999 and was secured by a pledge of and security interest in 65% of the
capital stock of Allied Mexico, S.A. de C.V., a wholly-owned subsidiary of Fluid
Packaging.
During the second quarter of 2000, the Company received, full payment for the
note, all interest due and partial out of pocket expenses incurred to collect
the note.
Cautionary Note on Forward-Looking Statements
---------------------------------------------
This report contains forward-looking statements relating, among others, to
financial objectives, sales growth and cost reduction programs. Many of these
statements depend on factors outside the Company's control, such as economic
conditions, market growth and consumer demand, competitive products and pricing,
raw material costs and other matters. With regard to new product introductions,
there is particular uncertainty related to trade, competitive and consumer
reactions. If the Company's assumptions are incorrect, or there is a significant
change in some of these key factors, the Company's performance could vary
materially from the forward-looking statements in this report.
PART II - Other Information
---------------------------
Item 4. Results of Vote of Security Holders
-----------------------------------
The Company's Annual Meeting of Stockholders was held on May 11, 2000. The
following nominees were elected to the Company's Board of Directors for a term
of three years.
Nominee For Withheld
Robert A. Davies, III 50,329,660 1,932,178
John D. Leggett, III, Ph.D. 50,337,839 1,923,999
John F. Maypole 50,350,407 1,911,431
Robert A. McCabe 50,306,214 1,955,624
Burton B. Staniar 50,353,387 1,908,461
The results of voting on the following additional items were as follows:
Approval of the appointment of Deloitte & Touche LLP as independent auditors
of the Company's 2000 financial statements.
For Against Abstained Broker Non-Votes
51,965,210 150,653 145,975 0
To consider and act upon a stockholder proposal requesting that the Company
prepare and place available to stockholders and employees an equal employment
diversity report.
For Against Abstained Broker Non-Votes
3,172,164 42,632,004 2,414,126 4,043,544
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(10) (n) Operating agreement of Armus, LLC, dated June 14, 2000
(o) Stock Purchase Agreement dated June 14, 2000
(11) Computation of earnings per share
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed for the three months ended June 30,
2000.
<PAGE>
CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
EXHIBIT 11 - Computation of Earnings Per Share
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
June 30, July 2, June 30, July 2,
2000 1999 2000 1999
------------ ------------ ------------ ------------
BASIC:
Net Income $12,375 $10,456 $24,107 $22,821
Weighted average shares outstanding 38,152 38,794 38,416 38,750
Basic earnings per share $.32 $.27 $.63 $.59
DILUTED:
Net Income $12,375 $10,456 $24,107 $22,821
Weighted average shares outstanding 38,152 38,794 38,416 38,750
Incremental shares under stock option plans 1,498 2,054 1,636 2,034
------------ ------------ ------------ ------------
Adjusted weighted average shares outstanding 39,650 40,848 40,052 40,784
------------ ------------ ------------ ------------
Diluted earnings per share $.31 $.26 $.60 $.56
</TABLE>
<PAGE>
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.
CHURCH & DWIGHT CO.,INC.
------------------------
(REGISTRANT)
DATE: Zvi Eiref
--------------------------------- ---------
ZVI EIREF
VICE PRESIDENT FINANCE AND
CHIEF FINANCIAL OFFICER
DATE: Gary P. Halker
---------------------------------- --------------
GARY P. HALKER
VICE PRESIDENT, CONTROLLER AND
CHIEF INFORMATION OFFICER
