<PAGE>
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 QUARTER ENDED SEPTEMBER 30, 1994 COMMISSION FILE NUMBER
33-7264
FIRST BRANDS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 06-1171404
State of Incorporation (IRS Employer Identification No.)
83 Wooster Heights Rd., Building 301
P.O. Box 1911
Danbury, Connecticut 06813-1911
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-731-2300
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 12 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
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS Outstanding at September, 30 1994
Common Stock, $.01 par value 22,021,457 shares
<PAGE>
FIRST BRANDS CORPORATION
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Condensed Statements of Income
For the Three Month Periods
Ended September 30, 1994 and 1993 3
Consolidated Condensed Balance Sheets -
September 30, 1994 and June 30, 1994 4
Consolidated Condensed Statement of Stockholders'
Equity - For the Three Month Period
Ended September 30, 1994 5
Consolidated Condensed Statements of Cash
Flows - For the Three Month Periods
Ended September 30, 1994 and 1993 6
Notes to Consolidated Condensed Financial
Statements 7-9
Item 2. Management's Discussion and Analysis
of Results of Operations and Financial Condition 10-12
Independent Accountants' Report 13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Items 2 - 6 14
SIGNATURE 15
</TABLE>
2
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
1994 1993
(in thousands - except per share amounts)
<S> <C> <C>
Net sales. . . . . . . . . . . . $ 264,167 $ 279,813
Cost of goods sold . . . . . . 160,381 172,969
Selling, general and
administrative expenses . . . 67,161 65,292
Amortization and other depreciation 4,727 5,232
Interest expense and amortization
of debt discount and expense. 4,967 5,897
Discount on sale of receivables 1,194 1,005
Other income (expense), net. . 349 (21)
Income before provision for
income taxes 26,086 29,397
Provision for income taxes . . . 11,012 13,025
Net income . . . . . . . . . . . $ 15,074 $ 16,372
Net income per common share and
common equivalent share (Note 6): $ 0.68 $ 0.74
Weighted average common and common
equivalent shares
outstanding (Note 6) 22,053 22,047
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
3
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
(in thousands) 1994 1994
(UNAUDITED)
<S> <C> <C>
ASSETS:
Cash and cash equivalents. . . . . $ 22,849 $ 13,384
Accounts and notes receivable - net 118,795 89,769
Inventories. . . . . . . . . . . . 127,456 155,737
Deferred tax assets. . . . . . . . 33,567 26,239
Prepaid expenses . . . . . . . . . 5,508 5,756
Total current assets . . . . . . 308,175 290,885
Property, plant and equipment (net
of accumulated depreciation of
$78,327 and $87,584) 253,175 266,357
Patents, trademarks, proprietary
technology and other intangibles
(net of accumulated amortization
of $162,174 and $193,429) 207,362 232,666
Deferred charges and other assets
(net of accumulated amortization
of $50,178 and $48,479) 25,747 24,077
Total assets . . . . . . $ 794,459 $ 813,985
LIABILITIES AND STOCKHOLDERS' EQUITY:
Notes payable. . . . . . . . . . . $ 524 $ 156
Current maturities of long-term debt 48 48
Accrued income and other taxes . . 42,885 35,640
Accounts payable . . . . . . . . . 31,214 60,510
Accrued liabilities. . . . . . . . 142,848 141,753
Total current liabilities . . 217,519 238,107
Long-term debt . . . . . . . . . . 149,687 153,430
Deferred taxes payable . . . . . . 51,776 44,177
Deferred gain on sale of assets. . 4,966 5,393
Other long-term obligations. . . . 12,117 12,148
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value, 10,000,000
shares authorized; none issued . - -
Common stock, $0.01 par value,
50,000,000 shares authorized; issued
22,021,457 shares at September 30, 1994
and 22,005,656 shares at June 30, 1994 220 220
Capital in excess of par value . . 117,417 117,085
Cumulative foreign currency translation
adjustment (3,258) (4,542)
Common stock in treasury, at cost;
520,200 shares (17,264) -
Retained earnings. . . . . . . . . 261,279 247,967
Total stockholders' equity. . 358,394 360,730
Total liabilities and
stockholders' equity $ 794,459 $ 813,985
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
4
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30, 1994
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
Capital Cumulative
in Foreign
Common Excess Currency
Stock of of Par Translation Treasury Retained
Par Value Value Adjustment Stock Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance
as of
June 30,
1994 . $220 $117,085 $(4,542) - $247,967 $360,730
Exercise
of Stock
Options . - 332 - - - 332
Common Stock
Dividends. - - - - (1,762) (1,762)
Purchase of
Treasury
Stock. - - - (17,264) - (17,264)
Net Income - - - - 15,074 15,074
Foreign
Currency
Translation
Adjustment - - 1,284 - - 1,284
Balance as
of September
30, 1994 $ 220 $ 117,417 $(3,258) $(17,264) $261,279 $358,394
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
5
<PAGE>
FIRST BRANDS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS
ENDED ENDED
SEPTEMBER 30, SEPTEMBER 30,
(in thousands) 1994 1993
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . $ 15,074 $ 16,372
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization. 13,268 10,389
Deferred income taxes. . . . . 181 4,166
Gain on sale of antifreeze and
car care business (4,202) -
Change certain in non-cash current
assets and liabilities net of effect
of business sold and acquired:
(Increase) in accounts receivable (23,471) (29,768)
(Increase) Decrease in inventories (8,145) 3,845
Decrease in prepaid expenses . 582 1,946
Increase in accrued income and
other taxes 7,212 7,385
(Decrease) in accounts payable (18,844) (35,353)
Increase in accrued liabilities 20,921 1,034
Other changes. . . . . . . . . . (396) (1,002)
Total adjustments. . . . . . (12,894) (37,358)
Net cash provided (used) for
operating activities 2,180 (20,986)
Cash flows from investing activities:
Capital expenditures. . . . . . (7,119) (6,633)
Proceeds from sale of antifreeze/
coolant and car care business,
net of note received 142,000 -
Acquisition of assets (45,195) -
Net cash provided (used) for
investing activities 89,686 (6,633)
Cash flows from financing activities:
(Decrease) Increase in revolving
credit borrowings, net (3,700) 19,000
Increase in other borrowings, net 325 9,212
Decrease in accounts receivable
securitization (60,000) -
Purchase of common stock, for
treasury (17,264) -
Repayment of term loan - (1,190)
Dividends paid (1,762) (1,313)
Net cash (used) provided by
financing activities (82,401) 25,709
Net Increase (Decrease) in cash
and cash equivalents 9,465 (1,910)
Cash and cash equivalents at
beginning of period 13,384 11,672
Cash and cash equivalents at
end of period $ 22,849 $ 9,762
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS.
6
<PAGE>
FIRST BRANDS CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Basis of Presentation
In the opinion of management, the accompanying unaudited
consolidated condensed financial statements include all adjustments
(all of which were of a normal recurring nature) necessary to
fairly present the results of operations for the interim periods.
Certain prior year amounts have been reclassified to conform with
the current year's presentation. All material intercompany
transactions and balances have been eliminated. Due to the
seasonal nature of some of its former product lines, primarily the
PRESTONE antifreeze/coolant and car care business which was sold on
August 26, 1994, the results of operations for the three month
period ended September 30, 1994 and the balance sheet at September
30, 1994 are not indicative of the results for a full year.
First Brands Corporation ('First Brands' or the 'Company') is
engaged in the development, manufacture, marketing and sales of
consumer products under branded and private labels. Principal
branded products include: GLAD and GLAD-LOCK (plastic wrap and
bags); STP (oil and fuel treatment and other specialty automotive
products); SIMONIZ (car waxes and polishes) and SCOOP AWAY; EVER
CLEAN and JONNY CAT (clumping and conventional cat litter).
On July 13, 1994, the Company purchased substantially all of the
assets of Excel-Mineral Inc. and Excel International Inc., the
manufacturer and marketer of the JONNY CAT brand of cat care
products, for $45,000,000.
On August 26, 1994, the Company sold the PRESTONE
antifreeze/coolant and car care business for $155,000,000 and
received $142,000,000 in cash and a $13,000,000 7 1/2% subordinated
debenture maturing in 2003, which for financial statement purposes
has been valued at $9,000,000. The net assets of that business
have been removed from the balance sheet, and a payable
representing the fractional interest of PRESTONE receivables
previously sold under the securitization program (see note 3) was
added, resulting in a pre-tax gain of $4,202,000 which was recorded
as other income (expense), net, in the Consolidated Condensed
Statement of Income. Sales from the PRESTONE business were
$31,684,000 for the period ended August 25, 1994, and $60,951,000
for the quarter ended September 30, 1993.
Inventories
Inventories were comprised of:
<TABLE>
<CAPTION>
September 30, June 30,
1994 1994
(in thousands)
<S> <C> <C>
Raw materials . . . . . . . . . . $ 22,720 $ 24,666
Work-in-process . . . . . . . . . 4,335 5,844
Finished goods. . . . . . . . . . 100,401 125,227
Total . . . . . . . . . . . . $ 127,456 $ 155,737
</TABLE>
7
<PAGE>
2. Long-term Debt
First Brands had long-term debt outstanding as of September 30,
1994 and June 30, 1994 as follows:
<TABLE>
<CAPTION>
September 30, June 30,
1994 1994
(in thousands)
<S> <C> <C>
Senior Debt:
$165,000,000 Revolving Credit
Facility, 4 year term
expiring December, 1995,
interest at prime rate,
LIBOR plus 3/4% or CD rate
plus 7/8%; commitment
fee of .35% on unused portion . $ 0 $ 3,700
Other . . . . . . . . . . . . . . 4,735 4,778
4,735 8,478
Less: current maturities. . . . . (48) (48)
Senior Debt . . . . . . . . . 4,687 8,430
Subordinated Debt:
9 1/8% Senior Subordinated Notes
Due 1999 100,000 100,000
13 1/4% Subordinated Notes Due 2001 45,000 45,000
Subordinated Debt . . . . . . 145,000 145,000
Total Long Term Debt. . . $ 149,687 $ 153,430
</TABLE>
The Revolving Credit Facility has no compensating balance
requirements, however it does have restrictive covenants, the most
significant of which include the maintenance of certain minimum
levels for the ratio of current assets to current liabilities,
interest coverage and the ratio of total liabilities to equity.
The 13 1/4% Subordinated Note Purchase Agreement (the 'Note
Purchase Agreement') requires the principal amount to be paid in
annual installments, subject to reduction for prior repurchases, of
$9,000,000 on July 1, 1997 and on each July 1 thereafter through
the year 2001. The 9 1/8% Notes contain limitations on the
Company's right to incur additional debt. Both the 9 1/8% Notes
Indenture and the Note Purchase Agreement have restrictive
covenants or limitations on the payment of dividends, the
distribution of capital stock or the redeeming of capital stock, as
well as limitations on Company and subsidiary debt and limitations
on the sale of assets.
First Brands was in compliance with all the covenants of all debt
agreements at September 30, 1994.
3. Accounts Receivable
In May 1992, the Company entered into a $100,000,000 extendable
three year agreement to sell fractional ownership interest, without
recourse, in a defined pool of eligible trade accounts receivable.
During the first quarter of fiscal 1995, the Company reduced the
8
<PAGE>
amount sold to $40,000,000 as of September 30, 1994. The amounts
sold are reflected as a reduction in accounts receivable on the
accompanying balance sheet and costs associated with this program
are recorded on the Consolidated Condensed Statement of Income as
discount on sale of receivables.
4. Notes Payable
Notes payable at September 30, 1994 of $524,000 consisted of
international subsidiaries' working capital borrowings with local
lenders. The Company's international working capital credit
facilities aggregated $20,145,000 at September 30, 1994 and are
generally secured by the assets of the respective international
subsidiary, with approximately $1,475,000 of the availability at
one subsidiary being guaranteed by First Brands Corporation (U.S.).
5. Taxes
The provision for income taxes for the three months ended September
30, 1994 and 1993 consists of the following:
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
1994 1993
(in thousands)
<S> <C> <C>
Current:
Federal . . . . . . . . $ 7,953 $ 6,305
State . . . . . . . . . 1,925 1,410
Foreign . . . . . . . . 953 1,144
Total current . . . 10,831 8,859
Deferred:
Federal . . . . . . . . 192 3,582
State . . . . . . . . . 30 669
Foreign . . . . . . . . (41) (85)
Total deferred. . . 181 4,166
Total Provision $ 11,012 $ 13,025
</TABLE>
6. Earnings Per Share
Net income per share has been computed using the weighted average
number of common shares and common share equivalents outstanding
for the periods.
9
<PAGE>
FIRST BRANDS CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis of the consolidated results
of operations for the three month period ended September 30, 1994
should be read in conjunction with the accompanying unaudited
Consolidated Condensed Financial Statements and related Notes. The
Company is primarily engaged in the development, manufacture,
marketing and sale of branded and private label consumer products
for the home and automotive markets. The Company's products which
include 'GLAD', 'GLAD-LOCK' 'STP', 'SIMONIZ', 'SCOOP AWAY', 'EVER
CLEAN' and 'JONNY CAT' can be found in large mass merchandise
stores, chain supermarkets and other retail outlets. The Company
believes that the significant market positions occupied by its
products are attributable to brand name recognition, comprehensive
product offerings, continued product innovation, strong emphasis on
vendor support and aggressive advertising and promotion.
Because of the seasonality in some of its former product lines,
primarily the PRESTONE antifreeze/coolant and car care business
which was sold on August 26, 1994, the results of operations for
any interim period and the balance sheet as of the end of any
interim period are not indicative of a full year's operations nor
the financial condition of First Brands at the end of any interim
period.
Results of Operations
The following table sets forth the percentages of net sales of the
Company represented by the components of income and expense for the
three month period ended September 30, 1994 and 1993.
<TABLE>
<CAPTION>
Three Months
Ended
September 30,
1994 1993
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of goods sold 60.7 61.8
Gross profit 39.3 38.2
Selling, general, and
administrative expenses 25.4 23.3
Amortization and other
depreciation 1.8 1.9
Interest expense and amortization
of debt discount and expense 1.9 2.1
Discount on sale of receivables 0.4 0.4
Other income (expense), net 0.1 (0.0)
Income before provision for
income taxes 9.9 10.5
Provision for income taxes 4.2 4.7
Net income 5.7% 5.8%
</TABLE>
10
<PAGE>
Quarter ended September 30, 1994 Compared to the Quarter ended
September 30, 1993
First Brands' consolidated sales for the three month period ended
September 30, 1994 were $264,167,000, 94% of last year's
$279,813,000. The revenue shortfall reflects only eight weeks in
the fiscal 1995 period compared to the entire quarter for the
fiscal 1994 period for the PRESTONE antifreeze/coolant and car care
business ('the divested business') which was sold on August 26,
1994. Excluding sales from the divested business, sales for the
first quarter of fiscal 1995 were $232,483,000, 6% above the prior
years comparable sales of $218,862,000. This performance reflects
higher sales from the automotive specialty and appearance products
and pet products businesses, which were partially offset by lower
sales of the plastic wrap and bag business. Cat litter sales for
the quarter were significantly ahead of the prior years level,
reflecting the inclusion of the JONNY CAT business (sales were
$7,445,000 for the quarter), which was acquired on July 13, 1994,
as well as continued market and share growth for its existing SCOOP
AWAY and EVER CLEAN brands.
Cost of goods sold for the three month period was $160,381,000, 93%
of last year's $172,969,000. Excluding the divested business, cost
of goods sold for the quarter were $139,213,000, 8% above the prior
year's $129,338,000. The higher costs during the quarter were
primarily due to increased volumes along with slightly higher resin
costs.
Gross profit for the quarter of $103,786,000 (39.3% of sales) was
97% of last year's $106,844,000 (38.2% of sales). Excluding the
divested business, the gross profit for the quarter was
$93,270,000 (40.1% of sales), 104% of the prior year's $89,524,000
(40.9% of sales). This higher gross profit for the quarter is due
to increased sales, while the lower gross margin resulted from the
aforementioned sales mix and increased resin costs.
Selling, general and administrative expenses was $67,161,000 for
the three months, 103% of the comparable period last year.
Excluding the divested business, which includes allocations of
corporate overhead to such business, these expenses for the quarter
were $59,321,000 (25.5% of sales), 102% of the prior year's
$57,880,000 (26.4% of sales). Increased advertising and promotion
expenditures for the automotive and cat litter businesses were
partially offset by lower spending in the plastic wrap and bag
business, due to a shift in the timing of certain promotional
programs. Higher selling costs were reported by the automotive
business, primarily due to increased STP advertising spending.
Selling expense for the cat litter business is above the prior
years' level because of the recently acquired JONNY CAT business,
and increased advertising to support the expansion of the SCOOP
AWAY and EVER CLEAN business.
11
<PAGE>
Amortization and other depreciation expense of $4,727,000, was 90%
of last year's three month period. This reduction reflects lower
amortization expense for fiscal 1995 as certain intangible assets
were fully amortized during fiscal 1994. Interest expense of
$4,967,000 for the quarter was 84% of the prior year. Discount on
sale of receivables reflects the costs associated with the sale of
a fractional ownership interest, without recourse, in a defined
pool of the Company's eligible trade accounts receivable.
The Company's provision for income taxes for the first quarter was
$11,012,000, 85% of last year's $13,025,000. The lower tax expense
reflects lower pre-tax income, and a marginally higher effective
tax rate during the first quarter of fiscal 1994, which reflected
the inclusion of the retroactive U.S. Federal tax increase and its
effect on deferred taxes.
Financial Condition
Worldwide credit facilities in place at September 30, 1994
aggregated $196,212,000 of which $194,621,000 was available, but
unused. The Company expects to borrow and repay up to $20,000,000
from these credit facilities over the next twelve months, primarily
for working capital purposes. During the first quarter, the
Company reduced the amount of accounts receivable sold under its
securitization program from $100,000,000 to $40,000,000 (see Note
3).
The Company's current forecast for the 1995 fiscal year reflects
capital expenditures of approximately $35,000,000 and fixed
payments (interest, principal, discount on sale of receivables and
lease payments) of approximately $45,000,000.
Based on the Company's ability to generate funds from operations
and the availability of credit under its financing facilities,
management believes it will have the funds necessary to meet all of
its described financing requirements and all other financial
obligations.
REVIEW BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
First Brands' independent certified public accountants have made a
limited review of the financial information furnished herein in
accordance with standards established by the American Institute of
Certified Public Accountants. The Independent Accountants' Report
is presented on Page 13 of this report.
12
<PAGE>
Independent Accountants' Report
The Board of Directors
First Brands Corporation:
We have reviewed the consolidated condensed balance sheet of First
Brands Corporation and subsidiaries as of September 30, 1994, and
the related consolidated condensed statements of income for the
three month periods ended September 30, 1994 and 1993 and the
consolidated condensed statements of cash flows for the three month
periods ended September 30, 1994 and 1993, and the consolidated
condensed statement of stockholders' equity for the three month
period ended September 30, 1994. These financial statements are
the responsibility of the Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of applying
analytical procedures to financial data and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the consolidated condensed financial
statements referred to above for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of First Brands
Corporation and subsidiaries as of June 30, 1994, and the related
consolidated statement of income, stockholders' equity, and cash
flows for the year then ended (not presented herein); and in our
report dated August 9, 1994 (except as to Note 19, which is as of
August 26, 1994), we express an unqualified opinion on those
consolidated financial statements. In our opinion, the information
set forth in the accompanying consolidated condensed balance sheet
as of June 30, 1994, is fairly presented, in all material respects,
in relation to the consolidated balance sheet from which it has
been derived.
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
New York, New York
November 1, 1994
13
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Federal Trade Commission staff is conducting an
investigation that alleges that certain advertising claims
for STP Engine Treatment violate a 1976 cease and desist
order regarding STP advertising. The Company does not
believe that it is subject to that order or that it made
the alleged claims.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit Index:
Exhibit 15 - Accountants' Acknowledgement
Exhibit 27 - Financial Data Schedule
B. Reports on Form 8-K
A Form 8-K items 2 and 7 dated September 12, 1994 was filed
reporting the sale of the Company's antifreeze/coolant and other
car care business.
14
<PAGE>
SIGNATURE
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.
FIRST BRANDS CORPORATION
(Registrant)
Date: November 9th, 1994 By: /s/ DONALD A. DESANTIS
Donald A. DeSantis
Senior Vice President and
Chief Financial Officer
(Principal Accounting
and Duly Authorized
Officer)
15
Exhibit 15
Accountants' Acknowledgement
First Brands Corporation
83 Wooster Heights Road
Danbury, CT 06813-1911
Gentlemen:
Re: Form S-8 Registration Statements No. 33-35770 and No. 33-56992
With respect to the subject registration statements, we acknowledge
our awareness of the use therein of our report dated November 1,
1994 related to our review of interim financial information.
Pursuant to Rule 436 (c) under the Securities Act of 1933, such
report is not considered a part of a registration statement
prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of sections 7 and 11
of the Act.
Very truly yours,
/s/ KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
New York, New York
November 1, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 22,849
<SECURITIES> 0
<RECEIVABLES> 124,064
<ALLOWANCES> 1,415
<INVENTORY> 127,456
<CURRENT-ASSETS> 308,175
<PP&E> 331,502
<DEPRECIATION> 78,327
<TOTAL-ASSETS> 794,459
<CURRENT-LIABILITIES> 217,519
<BONDS> 149,687
<COMMON> 220
0
0
<OTHER-SE> 358,174
<TOTAL-LIABILITY-AND-EQUITY> 794,459
<SALES> 264,167
<TOTAL-REVENUES> 264,167
<CGS> 160,381
<TOTAL-COSTS> 160,381
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 137
<INTEREST-EXPENSE> 5,921
<INCOME-PRETAX> 26,086
<INCOME-TAX> 11,012
<INCOME-CONTINUING> 15,074
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,074
<EPS-PRIMARY> 0.68
<EPS-DILUTED> 0.68
</TABLE>
